For those looking to enter the world of vacation rentals, location is always key – do you go for something close and convenient or a booming town that’s about to explode in value?
With home values and rental prices rising to higher and higher heights, a number of once sleepy towns are experiencing an explosion of interest. Due to easy publicity from popular name companies like Airbnb (ABNB) – Get the Class A report from Airbnb, Inc. and VRBO are among the most popular among people looking to rent a vacation home – at one point Airbnb coined more than 20% of the vacation rental industry in the United States
According to AirDNA’s annual report Best places to invest in vacation rentals report, to find out what requires looking at three separate factors: rental demand, income growth, and the cost of buying a property versus the income you can (or hope!) generate.
“Staying informed of trends as the travel industry begins to normalize will enable investors to make the right decisions and maximize their earnings, in 2022 and beyond,” said Jamie Lane, vice president of research. of AirDNA, in a statement sent to TheStreet.
Here are the top 10 cities likely to experience meteoric growth in rental income in 2022:
Maui, Hawaii
- Typical home value: $802,000
Although a somewhat obvious choice, the Hawaiian island of Maui has seen demand soar from vacationers and new remote workers seeking the island sun. The other side of the coin, of course, is that the market sets the price for all but the very rich — the median price for a single-family home has gone from $980,000 in January 2021 to $1,157,500 in January 2022. With the weather on the island, energy and property maintenance costs can also add up quickly.
Kenai Peninsula, Alaska
- Typical home value: $237,000
Off the coast of southern Alaska, the Kenai Peninsula has long been known for its wildlife and natural wonders. During the pandemic, the remote factor has become attractive and the area has seen an influx of visitors.
“Before the pandemic, occupancy only averaged 60% during peak season, while in 2021 it pushed well beyond 80% during summer 2021,” reads -on in the AirDNA report.
Chattanooga, TN
- Typical home value: $258,000
You didn’t expect to see that there, did you? But rule out Chattanooga at your peril because the Appalachian town has seen its rents go up by more than 20% in the past year, largely due to increased domestic travel – the Tennessee River and Lookout Mountain Incline Railway make it a popular vacation destination.
Chattanooga, TN
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Gulfport/Biloxi, Mississippi
- Typical home value: $155,000
Another under-the-radar destination, the nearby towns of Gulfport and Biloxi sit along a sandy beach and have seen a steady stream of tourists seeking not just swimming but also its booming casino industry. – the entry point to buy, meanwhile, remains quite affordable.
“While all areas in the Gulfport/Biloxi area score high on investability, long beach and Sources of the ocean are the two that stand out in this market, offering the highest short-term rental occupancy rate over the past year, at over 68%,” reads the report.
Slidell, Louisiana
- Typical home value: $225,000
If you’re not from the South, you probably haven’t heard of the New Orleans suburb of Slidell. The city is attractive, however, for the same reasons as Gulfport and Biloxi: it is located along the Mississippi Gulf Coast and will always be a popular tourist destination.
“In this position, Slidell is expected to reap the benefits of increased regional travel demand, earning a score of 100 in our revenue growth and investment metrics,” the report read.
Crystal River, Florida
- Typical home value: $249,000
All of Florida has seen an explosion of people looking to both buy and rent – but while Miami’s prices can make investing out of reach, what’s often called the manatee capital of the world (two hours from Orlando along the state’s west coast) could be a good way for someone interested in running an Airbnb in Florida to break into the market.
Joshua Tree, California
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Joshua Tree, California
- Typical home value: $342,000
There may have been a a slew of items on how Joshua Tree is where remote workers are flocking but, at least so far, it’s still relatively affordable — the Mojave Desert town still has a typical home value of $342,000.
“In Joshua Tree, it pays to invest in larger property, with larger homes that triple the earning potential, with a much lower impact on the cost of home acquisition,” reads The report.
Charleston, South Carolina
- Typical home value: $504,000
You’ve heard how beautiful it is, but did you know Charleston homes are expected to rise another 19% in 2022? A vacation rental here will almost never sit empty, but with an average price of $504.00, extra funds are required to purchase.
Charleston, South Carolina
Galena, Illinois
- Typical home value: $215,000
Three hours from Chicago, Galena is much closer to Iowa than the Midwestern metropolis, but its appeal lies precisely in the quiet lifestyle the lakeside town has to offer.
“During the summer months, travelers to the area vacation in cabins near Lake Galena or stay downtown in historic 19th-century buildings,” the report read. “This opens up a profitable opportunity.”
Southwest Port, Maine
- Typical home value: $399,000
Higher home prices will show you that Southwest Harbor isn’t as low-key as some of the other entries on this list — beachfront cottages and proximity to Acadia National Park have made it a vacation destination for years. popular holiday.
“With a TTM occupancy rate of 76%, Southwest Harbor has benefited from a expansion of its peak season, with guests visiting earlier and staying later in the season than ever before,” reads the AirDNA report.
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