With the rise of popular and secure rental properties such as Airbnb and Vrbo, people with an extra room, house, or yacht now have a possibility to rent out their property. However, as with any market, some properties are more valuable than others. So if you have some property that you are looking to invest in check out this list to see what are the best and worst places to own a vacation rental property.
The Best (Profit Potential-$40,000-$62,000)
Palm Springs, CA
This city is just a few hours from the more touristy Los Angeles and San Diego, therefore properties there are cheaper, but it still has the great year round weather that many tourists desire. The thing that really makes this city special is its proximity to festivals like Coachella and Stagecoach.
While property prices are high here, if people are willing to come out to a island in the middle of the Pacific Ocean, they are willing to spend a little more money to stay here. Another thing that makes Airbnb or Vrbo listings perfect is that they can be priced under traditional rental listings while still allowing the owner to make a profit.
This city is in central Florida and is close to both Orlando and Tampa. It is also not too far from Miami, where some might go to vacation for the weather. Like Palm Springs, being close to major cities is a perfect spot to draw tourists who need a place to stay overnight on their road trip. And, like the rest of Florida has great year round weather.
The Worst (Profit Potential-$10,000-$21,000)
This is a surprise, but due to the immense home prices, in order for renters to make a profit they have to charge insane prices. Also, this major city like others, is oversaturated with Airbnb and Vrbo listings driving prices even lower.
Venice is just the same story as Miami but just on the opposite coast. Again, due to high property taxes and regulations as well as high home prices, it is hard to turn a profit. While there is nice weather year round, it is also competing with other major cities like Los Angeles, Hollywood, Beverly Hills, San Diego, etc…
Just a couple hours north of Venice, high home prices and regulations destroy profit potential. On top of that weather in the colder months can be rainy and smoggy, meaning less people wanting to stay.
While you might choose to invest in one of the bigger cities like New York, Chicago, or Houston, in actuality the less known cities that are near popular tourist destinations are actually the most ideal places for someone to invest right now. These cities don’t suffer from the insane property values that destroy potential profit.