This post presents a list of the five best places to buy a vacation home. It’s based on Mashvisor’s May 2021 data on Airbnb occupancy rates and cash on cash return rates.
Depending on your goals, buying a summer home or vacation home can be one of the best real estate investments you’ll make. It all depends on seeking out investments in the right places. And in this post, we’ll present a few of the best summer destinations for Airbnb investors.
Should you Invest in a Vacation Home?
A vacation home is a great investment in 2021
A summer home can be a great source of cash flow but keep in mind that investing in real estate comes with certain risks and precautions. Here are some perks you can expect to enjoy from a summer home investment.
1. An extra source of income: The short term rental industry has seen unparalleled growth in recent years and this uptrend shows no signs of slowing down. The cap rate on short term rentals can sometimes go up to two or three times that of long term rentals. With time and due effort, a vacation home investment can outperform your favorite side hustle.
2. A home away from home: There’s no rule that says you can’t make a personal retreat out of summer homes. Your summer house can serve as space where you host parties, take vacations and entertain friends. This allows it to serve both commercial and social purposes.
3. Value Appreciation: As you’d expect from any good real estate investment, your summer home appreciates in value. You can be sure that your Airbnb investment property will earn a sizable interest over the initial price if and when you decide to sell it.
4. A wider market: Buying a summer house opens up vast opportunities, particularly when compared to long-term rentals. Unlike long-term rentals where profitability is largely based on your property’s location, a vacation home investment means you can profit in almost any real estate market. As vacation rentals increase in popularity, the potential to expand your business into more profitable areas improves.
5. Flexible rates: Long-term rentals are priced based on the standard rates for the area. Investing in a vacation home means you can, more often than not, set your own rates. Based on forecasts and seasonal demand, you can charge a higher premium on your vacation home. This means you can easily double your Airbnb income.
Mashvisor’s top 5 places to invest in a summer home
The pandemic fueled the desire of many Americans to invest in second homes. However, if you want to make money from your investment, you need to know where to invest. What are the most profitable Airbnb locations in summer 2021? Where should you look when trying to buy summer houses for a profit? Based on Mashvisor’s Airbnb data on cash on cash return, occupancy rate, among others, here are the top 5 places to consider if you are interested in buying a summer home.
Rancho Cordova, Sacramento, CA
A small city in Northern California. Rancho Cardova is quiet, laid-back and a lovely spot for a vacation. From gallivanting in the beautiful outdoors to visiting historical sites, there’s no shortage of fun activities to experience in Rancho Cordova. It’s a perfect place to invest in a summer home. The Rancho Cordova real estate market has seen marginal year on year growth, being a family-friendly location.
- Airbnb Cash on Cash Return: 6.73%
- Airbnb Daily Rate: $163
- Airbnb Occupancy Rate: 66.57%
- Airbnb Rental Income: $4155
- Median Property Price: $434,520
- Average Price Per Square Foot: $278
- Average Days on Market: 29
- Traditional Cash on Cash Return: 4.6%
- Traditional Rental Income: $2690
- Price to Rent Ratio: 13
Apple Valley, Dakota, MN
Many tourists visit Apple Valley for the rolling hills and gorgeous lakes. Apple Valley is the perfect blend of the rustic and metropolitan. The Minnesota Zoo is the city’s foremost attraction and most visitors to Apple Valley are sure to go straight to it. Also, the wide range of modern parks, diners, art galleries, and museums make Apple Valley a premier vacation hotspot.
- Airbnb Cash on Cash Return: 4.12
- Airbnb Daily Rate: $131
- Airbnb Occupancy Rate: 74.92
- Airbnb Rental Income: $2.858
- Median Property Price: $315,116
- Average Price Per Square Foot: $167
- Average Days on Market: 38
- Traditional Cash on Cash Return: 4.36
- Traditional Rental Income: $1992
- Price to Rent Ratio: 13
Waianae, Honolulu, HI
Waianae is a small coastal town covering a 13-mile stretch. Known for its plenteous marine life, titillating beaches and picturesque valleys, the Waianae is growing to be a popular vacation spot. Visitors often retreat to the quiet coast of Waianae to indulge in some quiet fishing, hiking, and sightseeing.
- Airbnb Cash on Cash Return: 3.58
- Airbnb Daily Rate: $221
- Airbnb Occupancy Rate: 59.79
- Airbnb Rental Income: $2.089
- Median Property Price: $350.797
- Average Price Per Square Foot: $380
- Average Days on Market: 86
- Traditional Cash on Cash Return: 4.41
- Traditional Rental Income: $1.468
- Price to Rent Ratio: 20
Greenville, Pitt, NC
The capital of Pitt County, Greenville is an excellent choice for visitors who desire a change of scenery. Greenville is widely known as the cultural and economic center of North Carolina. Visitors engage in boating activities down the Tar River or watch live performances at one of the local theaters. From studios to apartments, there are lots of options for investing in Airbnb Greenville
- Airbnb Cash on Cash Return: 6.14
- Airbnb Daily Rate: $90
- Airbnb Occupancy Rate: 64.38
- Airbnb Rental Income: $2542
- Median Property Price: $298.958
- Average Price Per Square Foot: $121
- Average Days on Market: 74
- Traditional Cash on Cash Return: 4.14
- Traditional Rental Income: $1.612
- Price to Rent Ratio: 15.
Joshua Tree, San Bernandino, CA
Famed for its spectacular sunrises and hipster attractions, Joshua Tree has proven to be the ideal designation for people seeking a pullback to the rustic and simple. From vegan diners to hipster bookstores and even alien-inspired architecture, Joshua Tree runs a gamut of the weird and kooky. Visitors might want to check the Noah Purifoy Outdoor Museum for the assemblage art collection, browse the Farmers’ Market and visit the Giant Rock, supposedly the largest standing boulder in the world.
- Airbnb Cash on Cash Return: 1.44
- Airbnb Daily Rate: Not Available
- Airbnb Occupancy Rate: 77%
- Airbnb Rental Income: $4.696
- Median Property Price:.$499.000
- Average Price Per Square Foot: $385
- Average Days on Market: Not Available
- Traditional Cash on Cash Return: 0.47
- Traditional Rental Income: $859
- Price to Rent Ratio: Not Available
Where is the cheapest place to buy a vacation home?
Flint, Genesee, MI
Note that buying a cheap US vacation home doesn’t guarantee profitability. You still have to do your due diligence. You should use Mashvisor’s AirBnB analytics. Based on Mashvisor data, Flint is the cheapest place to buy a summer home. Famous for its 2014 water crisis, Flint is the seventh-largest city in Michigan with a population of 94,762. Visit the Flint farmer’s market, the Flint Institute of Arts, and the long way planetarium if you’re looking to explore the city.
- Airbnb Cash on Cash Return: Not Available
- Airbnb Daily Rate: $120
- Airbnb Occupancy Rate: Not Available
- Airbnb Rental Income: Not Available
- Median Property Price: 125,061
- Average Price Per Square Foot: $92
- Average Days on Market: 118
- Traditional Cash on Cash Return: 3.39
- Traditional Rental Income: $703
- Price to Rent Ratio: 15
The Bottom Line
Now that you know some of the most profitable AirBnB locations, you might want to start searching out investment property for sale. However, be sure you are in compliance with your desired location’s AirBnB laws and regulations first. For example, in the San Bernardino, California real estate market, a short term rental permit in San Bernardino County is required to offer full or partial accommodations for less than 30 days.
If you’re looking for a smart way to analyze the profitability of your summer home investment, check out Mashvisor’s Airbnb profit calculator.