Best Places To Own A Vacation Rental Property In 2019

Here’s a look at the best places to own a vacation rental property in 2019 according to Rented.com, the world’s largest platform connecting owners of vacation homes with short term managers. Consider these are short-term rentals with strong ROI for owners/investors. Rented.com’s most recent report looks at the “Ultimate ROI” question: “When buying a rental property, for investment purposes, what are the best markets?”

Take a look at the five best places to own on the list, which ranks 150 destinations: Pigeon Forge, Tennessee, Gatlinburg, Tennessee, Panama City Beach, Florida, Killington, Vermont, and Palm Coast, Florida.

The criteria pointing to short-term rental profitability include real estate prices, local vacation rental rates, insurance, taxes, maintenance expenses and the popularity of a tourist destination. “The Southeast did extremely well this year, especially in non-luxury markets like the Smokey Mountains. There they have very friendly short-term rental regulations, it’s a four-season market and a five-hour drive from several major cities,” explains Andrew McConnell, CEO of Rented.com.

“The takeaways I found the most interesting and where the biggest shift was is how urban destinations fell off as a good investment. A year or two ago some had the highest ROI and that’s fallen dramatically,” explains McConnell. Major cities like Chicago where the short-term vacation rental regs are in question brought down the popularity of urban areas as potential investments. There’s also been much controversy in Boston over short-term rentals.

Thanks to the continued growth and popularity of short-term rental options like VRBO and Airbnb, Rented.com also looks at the local climate for regulations either prohibiting or curtailing short-term rentals.

Florida came out on top of the list as the state with most destinations at 19. Surprisingly, California came in with 13 destinations, though because of high real estate prices, there weren’t any ranking higher than 44 on the list of 150. Texas hit the number three spot with 9 cities. Areas with a milder winter usually mean a longer tourist season.

A few things to consider before investing is simply doing your due diligence. Rented.com encourages the following: “Identify opportunities in markets where asset prices are low relative to the market’s attractiveness as a vacation destination. Obtain a clear and thorough understanding of necessary improvements, as well as maintenance, property tax, insurance, HOA, and other costs. Seek out markets with a strong vacation and or rental markets. Learn about the communities’ regulations regarding rentals properties.”

Also, if the property you’re looking at is a condominium, do check all condo docs for assessment history, reserves and the expected lifetime of basics like roofs and roads. Nothing hurts your pocket more than buying a property and shortly after being hit with a sizeable special assessment.

To dig deeper, look at Rented.com’s chart, which details the 150 best places with rankings, scores and estimated rental income.

This post first appeared on Forbes.com. To see the original, click here.