If you’re considering buying a vacation home that will also earn income from short-term rentals, you’ll have to think about a lot of things; for example, if the home well off the beaten track, no one may have even heard of the place, much less think to search for a vacation rental there. Here’s what else to consider when choosing the best location:

Do some research and look at the available vacation rentals comparable to the size and type of house that you’re interested in. This will help you gauge what your competitors are charging and whether you’ll likely be able to charge enough to cover your costs. Keep in mind that many vacation rentals have varying rates depending on the time of year. It’s best to look at rental rates during the high and low season and create an average. Have your agent find out when the rental rates change and what these rates are. You can also ask other landlords in the area. Also, realize that all houses in a given area aren’t created equal: For example, a house that’s walkable to the beach will rent for more than an equivalent one that’s a two-minute drive away. Of course, that house will also cost you more to buy.paradise,1,vacation,wishiwashere,beach,lovely-f9502b5cb0253fba5bed645c0a3f5d48_h

Your best bet is to contact a local property management company or ask a real estate agent who also handles property management in the area. You can also call the local newspaper and request back issues from previous years so you can search through the classifieds. And keep your eye on the local and national news, too. Rents on vacation properties can shift up or down considerably based on the state of the national and local economy. When the economy is down, vacations are among the first non-necessities that people cut.

A strong vacation rental market would have a vacancy rate of 10% or lower during the peak season. Ask your real estate agent for the median vacancy rates during the peak and off-peak seasons. Aside from the main attraction drawing prospective renters, it helps if your location supports activities such as dining, galleries, shops, grocery stores, and gas stations. Make sure these are within a reasonable driving distance. property_441065_1

You don’t want to buy a property in a crime-ridden area. Criminal activity also adds to your headaches as a landlord, since you’ll have to think about security measures, what to warn your tenants about, and so forth.

If you’re considering a vacation rental in an area you’ve already stayed in, you know about some of the above considerations. If not, you’ll want to do some in-depth research, and try taking a few trips to the area as a renter before you commit to buying.


  1. Samantha

    Well..we purchased a home in Gatlinburg, Tennessee in the mountains. We wanted it to be secluded. Well, not a home, its more of a cabin and we wanted a cozy get-a-way home.

    • Barbara Wright

      Hello Samantha! That’s great! The article was partially speaking to people purchasing a vacation home with the intent to rent it out, too. In which case, they have to think about the fact that the home should appeal to many types of renters. Many who are visiting a vacation area want to be able to experience nightlife, be near the slopes, near the beach, or by shopping centers. Just a consideration for buyers!


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