What is a Vacation Rental Property?
Vacation rentals are typically single-family homes that are rented to travelers on a short-term basis. Short-term rentals are rented for no more than six months at a time by the same individual, though this definition may vary in certain circumstances.
Vacation rentals are very profitable investments if you know how the real estate market works and know how to market. When it comes to any type of rental property, the location of the property is what determines how successful you’ll be. For vacation rentals, this means choosing a location that sees a lot of tourist activity.
#1: Orlando, Florida
Orlando is home to “The Happiest Place on Earth”, the infamous Walt Disney World. Because of this fact alone, Orlando is one of the top destination spots in the U.S., for both U.S. residents and international travelers. Orlando is also home to other amusement parks, such as Universal Studios and SeaWorld.
The city is also within a reasonable driving distance to a beach and offers many other attractions in addition to amusement parks. For this reason, investing in vacation rentals in or near Orlando is sure to generate a consistent stream of income. Just make sure that local and state regulations allow for short-term rentals.
#2: New York City, New York
Believe it or not, New York City is the number one tourist destination in the United States. This makes sense because NYC is one of the biggest cultural hubs in the world— so much so that many people believe that it’s either the capital of New York state or the United States (it’s not a capital city at all).
Some of NYC’s most popular attractions include Times Square, Madison Square Garden, Central Park, Grand Central Terminal, The Statue of Liberty, and so much more. This means that owning a vacation rental property in NYC could also generate a steady stream of income. However, NYC does have strict short-term rental laws: guests have to rent for more than 30 days, or the host has to be on-site for guests renting less than 30 days.
San Francisco is another popular tourist destination in the U.S. One of the top attractions that people travel from all over to see is the Golden Gate Bridge. San Francisco is also known for its diverse cuisine, and it’s located right next to California’s Wine Country for wine connoisseurs looking for wine tastings. Like New York City, San Francisco has some pretty strict laws about short-term rentals.
First, San Francisco must be your primary residence for you to own a short-term rental in the city, and you can’t rent to guests for more than 90 days in one calendar year. So if you’re a San Francisco native, consider looking into borrowing capital from a flexible lender to purchase a vacation rental in the city to earn some extra cash.
#4: Maui, Hawaii
The island of Maui is one of the most visited islands in the entire state of Hawaii. A lovely tropical getaway, Maui offers a variety of water sports, sandy beaches, and diverse wildlife. In fact, the entire state of Hawaii is known for all of these things as well, making it a great place to invest in a vacation rental.
Once again, you must be aware of any limitations that the state has on short-term rentals. For example, in the city of Honolulu (on the island of Oahu), it’s illegal to list a property advertising a stay of less than 30 days on listing sites, and you can be charged a fine of up to $10,000 a day for doing so.
While the best way to make money from vacation rentals is to purchase those in places that see a lot of tourists, many of these destinations have strict rules about short-term rentals. Just make sure that you’re able to follow these rules and regulations before you purchase to avoid any fines and other penalties.