Investor · Denver, CO · Member since 2016 · 39 posts · 16 votes
Hey there.
I wanted to reach out to the BP community to get their thoughts on interesting locations for a first time vacation rental buyer. I'm currently a buy and hold investor in Canada but live in California. I wanted to get peoples thoughts on specific areas in the US that would be good to look at for holding a vacation rental.
Interested in hearing about areas where the purchase price is realistic when compared to the vacation rental market (meaning that there is good demand for rentals throughout much of the year with attractive rates).
Ideally, a warmer location so I could accommodate many of my Canadian friends and family who travel to the US during the harsh winter months. (CA,FL,etc)
I agree with @Rob Javins that the area consisting of Gatlinburg, Pigeon Forge, Sevierville, and Townsend, TN may be a great fit based on what you described.
A client of mine who owns some vacation rentals in Gatlinburg also owns a few in Myrtle Beach, South Carolina, and he has told me those do very well. If you're open to investing in coastal areas, then that may be a location worth looking into also.
Myrtle Beach is very Canadian-friendly and there are good vacation properties available. The average daytime temperature in the winter is the mid-fifties. There's approximately 120 golf courses in the area and 60 miles of beach. I've been a realtor on the Grand Strand for about 11 years so if there's any way I can help let me know.
If you don't mind investing in Far East, Japan, Kyoto is an excellent place for vacation rental investment. Fully booked during 3 peak seasons: the Cherry blosom season (from mid March to May), July and August for Gion Matsuri festival, November and December for the fall foliage. Average 80% occupancy rate.
As for location, it's tough to beat Maui. As you probably know, Maui is a favorite vacation spot for Canadians and many Canadians own property there. The Kihei area in particular is mostly vacation rental condos and a very popular spot for those looking for good accommodation deals in a great area. Home prices have risen quite a bit over the past few years which makes it harder to find a great investment deal, however, there are deals to be had that will allow you a good return on your money.
Have to agree with Jeremy! Hawaii is such a hot spot for vacation rentals, and year-round demand keeps prices high.
The traditional vacation rental areas are always great (PCB, Destin, etc.), but they also may be starting to get saturated. HomeAway reported that the top U.S. markets in terms of demand per listing were Chicago, NYC, Boston, Miami, and Atlanta, so you also might do well in an urban market.
Thanks to you all for your great comments.
I like Hawaii for the vacancy rates but the price point is a bit high as I'm looking at between 250 and 300k on this first one and would prefer staying away from a condo. Gatlinburg seems interesting to me, though I question the vacancy rates and the ability to turn it in to a buy and hold if it isn't performing well as a STR (due to its location).
Myrtle beach is for sure a hot spot with Canadians, so I'll have to look in to that a bit more to see if detached homes in the right areas are available considering my budget.
Thanks again for all the useful thoughts!
If you don't want to do a condo, and you want a potentially great vacation rental on the Big Island, then $250-300K might be tough. If you were open to a condo on the Big Island, you'd have a lot of options.
People often mistakenly believe that "any house in Hawaii can be a vacation rental". That is absolutely false. Visitors to Hawaii want water -- views or access. Places without those rent for significantly less, if they rent at all.
Sien Long Chong what type of cash flow would I see in Kyoto. What are the average prices? Would love some input thanks
Hi Jason,
The average price of single family houses range from 220k-300k. As Kyoto is a old city, as Japanese do not like old houses, you could get as low as 130k if you look hard enough. For vacation rental, you are looking at min 10% after expenses and management fees.
You're right. I know some people in the VRBO business that are making a killing with their studios located at separate spots all over the island. I'm like, "you make how much with those studios!?!?!?!?!?"
La Quinta, CA seems to be very popular with Canadians. I see lots of Canadian license plates when I am there. We have a rental in a community called Santa Rosa Cove which is adjacent to the La Quinta Resort and Spa and we use the resort's leasing service to rent it as a vacation rental. Using the resort's leasing service allows our guests (us too!) to use all of the resort amenities (pools, gym, etc). We live about 2-3 hours away depending on traffic and the leasing service handles everything from booking to cleaning. So, all things considered, pretty good setup for an absentee owner and we can block off certain periods where we want to use it or weekends that we do not want it rented (coachella rave, etc). Feel free to message me if you want more info.
As a fellow Canadian that years ago escaped the harsh winter years ago, I would like to suggest to you an option that is a favorite of a growing number of Canadians AND folks from around the world....TURKS AND CAICOS ISLANDS...ranked the #1 Beach in the World and the Caribbean by TripAdvisor.
As more and more people from around the world discover this "Beautiful by Nature" pearl in the Caribbean what you (we) achieve is a lifestyle investment with lifetime returns. It is a very resilient investment climate as it is always going to turn cold in both North and South America, the snow will always fly and people will always want to escape to the warmer climate of the islands.
There is amazing airlift with all major airlines flying here each and every day of the year thereby making TCI a four season destination. There are direct flight from Canada, just 3h10m gate-to-gate.
As a starting point, as a local developer that caters to people just like you and all the other people want to earn some money, enjoy some great vacations and have a place they can direct all their family and friends to, I want to suggest you start by taking a look at ALIVE and Well Resorts. Turnkey hassle free passive investment into luxury island vacation destinations priced from under USD $200k.
Why not come down for a visit? What is the worst that can happen when you sink your feet into the #1 beach in the world that was in 2015 also ranked the #1 Island in the world on TripAdvisor.
@Sien Long Chong what types of regulations are involved for investors. What type of financing is involved?
Currently you will need hotel license in Japan except Ota Ward (Tokyo) and Osaka. Unfortunately Japan banks do not provide loan to foreign resident. You will need to arrange finance in your home country.