As travelers increasingly turn to home rentals for their vacation needs, certain cities and towns have proven to be standouts in the short-term rental space. Some of these areas have always been well-known destinations that are continuing to grow in popularity, while others are just now starting to attract attention. Keep reading to learn more about which vacation rental markets are attracting visitors and savvy homebuyers alike.
Park City, UT
Home to world-class skiing, a picturesque downtown, top-rated restaurants and the Sundance Film Festival, Park City has long been a thriving vacation destination. The city also has a leg up on other ski destinations by being more easily accessible, thanks to its proximity to Salt Lake City. But the last few years have been especially favorable for the destination’s luxury home market, according to Utah Business. And this real estate growth has, in turn, strengthened the area’s vacation rental market.
What’s behind this recent surge? Some of it can be credited to a greater awareness of the city’s year-round appeal, with popular summer activities including fishing, mountain climbing, golfing and water sports.
It’s also driven by the increasingly hot tech scene in Utah. The New Yorker recently named Utah as the next Silicon Valley and Inc. Magazine identified Park City as a hub for entrepreneurs. As more wealth enters the area, more people throughout the state are looking to vacation in Park City’s luxury homes or purchase their own high-end vacation properties.
San Diego, CA
San Diego is one of those destinations that has always been on the radars of travelers and property buyers, but the city’s vacation rental industry has recently experienced a boom. Fueling this trend is the increased demand for property on or near the ocean and a lack of hotels to fill that demand, says Evan Harris, co-founder of the real estate finance company SD Equity Partners.
“Modern tourists, especially Millennials, do not want to rent a car and stay a few miles from the ocean,” he pointed out.
Because over 90% of land along the city’s coastline is residential, says Harris, rental property owners are in the perfect position to meet the increasing demand of vacationers who want to experience ocean-front living.
Port Aransas, TX
Sandy beaches, water activities, abundant fishing and a small island charm have always drawn visitors to Port Aransas, says Jana Snow, a broker associate with Mark Grosse Real Estate.
But even higher numbers of vacationers and vacation home buyers may be drawn to the area by recent and emerging developments, such as Cinnamon Shore, a new pedestrian-friendly community of beach homes and condos.
Snow is seeing a continual increase in the number of new vacation homes in Port Aransas, noting that people are especially interested in properties with golf cart access to the beach, restaurants, and popular activities around town.
Lake Tahoe Area
Lake Tahoe is another area with a longstanding reputation as a top vacation destination. With watersports and lakeside views in the warmer months and easy access to ski slopes in the winter, the area has enough variety to appeal to vacationers with a range of preferences.
Just a 2-3 hour drive from Sacramento and the Bay area, Lake Tahoe’s proximity to these booming cities is part of what’s fueling the vacation rental market. As the Bay Area has become more affluent, more people are interested and able to purchase vacation homes in Lake Tahoe, says Sasha Spiegel-Wallace, a concierge realtor with Coldwell Banker.
And while other areas around the country are considering increasing regulations and restrictions on property owners who want to rent out their homes, Spiegel-Wallace points out that the Lake Tahoe area primarily consists of vacation homes. “So if we cut off the tourist activity, we’d be in big trouble,” she notes.
Known for its vibrant music scene and delicious barbecue, Nashville is a city that’s undergoing rapid growth by nearly every conceivable measure. In 2015 Travel & Leisure readers voted for the city as the number one destination in the world, and Nashville has recently been named one of the country’s friendliest cities and a top U.S. festival destination.
Just as more visitors are flocking to visit Nashville, the city is lacking in traditional options for lodging. There’s currently a shortage of hotel rooms, says Brian Copeland, chief engagement officer of Village Real Estate and president-elect of the Tennessee Association of Realtors. As a result, hotels rooms located in desirable areas are listed at extremely high prices, giving visitors an even greater incentive to look at short-term rental options.
But there’s another factor that’s fueling the city’s vacation rental market. “The entrepreneur spirit is alive and well in Nashville,” Copeland points out. He says that the city is always encouraging entrepreneurship, and the vacation rental market is no exception.
While each of these cities and towns offer promising opportunities, nearly every expert we spoke with cautions against purchasing a home without detailed knowledge of local regulations, restrictions, and trends. Buyers can easily run into issues that prevent or limit them from renting out their homes, even in relatively renter-friendly areas. To avoid these stumbling blocks, partner with a local realtor and an experienced vacation rental property manager to get the most from your vacation rental home.