It’s hard to be in the vacation rental business without considering an investment of your own – and we’ve had the wheels turning around the Evolve offices on some of our personal go-to places to invest.
A few of our owners have magnificent rentals that we’d all love to own – this phenomenal private island property off the Florida Keys and the award-winning Sun Cloud come to mind – but our pockets are substantially too shallow to aspire to similar properties.
Instead, we dreamed a little smaller, and a lot more practical, with a modest budget and the goal of not just offsetting the costs of ownership, but making a pretty sizeable profit each year.
Here were our requirements for a smart vacation rental investment:
- Purchase price of under $300,000 for at least a 3-bedroom property
- Popular enough for tourists to come visit regularly
- Not too much competition (Palm Springs, Orlando, Hawaii, we’re looking at you)
- At least $30,000 annual rental income (though the more, the better)
We asked around the Evolve offices and found five fantastic destinations that fit the criteria. These are the places we’d choose to invest if we had $300,000 to spend.
Lake Arrowhead, CA
Though it’s only an hour and a half from Los Angeles, Lake Arrowhead features some surprisingly affordable properties – and it’s a popular destination for travelers who are tired of the beach and want to get away to a more wooded area.
One Evolver got curious about the Lake Arrowhead area when we published this case study featuring a lovely 5-bedroom home. He thought it likely the area was very expensive – but was surprised to discover a large number of attractive, spacious properties for less than $300,000!
This 4-bedroom, 2-bath property, for example, is on Zillow for $225,000.
It has the same feature wood ceilings as our owner’s Lake Arrowhead property – with the addition of a stunning fireplace besides. And there are tons of similar properties in the area with amazing features, plenty of space, and entirely affordable price tags.
Considering that Jim brought in $84,407 in just 10 months with his 5-bedroom house near Lake Arrowhead village, we think it’d be pretty easy to turn a profit on a Lake Arrowhead investment!
Known as the “Gateway of the Smoky Mountains,” Gatlinburg is a hugely popular destination for those who want to get away to the mountains for a little rest and recreation. It’s near tons of popular trails and peaks of the Great Smoky Mountains National Park, the well-known Ober Gatlinburg Ski Resort, and a slew of family-friendly amusement parks and attractions.
And surprisingly, house prices remain relatively low!
We first got interested in Gatlinburg real estate when we helped owners Randy and Freda bring in an amazing $163,718 in rental income – but we thought that was likely due to their stunning 4-bedroom home with a private pool and home theatre.
As other owners came to us for help renting more moderately-sized homes, however, we quickly saw that families love visiting Gatlinburg even without a private pool at their disposal. Our owners have easily been able to clear $50,000 a year in the area – in fact, a recent addition to the Evolve family saw her 3-bedroom property bring in $25,459 in the first four months!
We found this beautifully finished 3-bed, 2-bath house at the very top of our hypothetical budget at $299,900. With that perfectly designed kitchen and bathroom, we think it’d make an incredible rental property – and would likely turn a profit very quickly.
Lake Harmony, PA
When you hear “the Poconos,” you probably think of monied New Yorkers off to spend a weekend skiing at the lodge. (Or this episode of Friends.) The Poconos is incredibly popular both as a winter and summer destination, but we recently discovered that the area around Lake Harmony is shockingly affordable.
One of our owners has made over $100,000 this year on his vacation home in Lake Harmony, and this attractive 4-bedroom with a recently remodeled kitchen is for sale just down the road from that property – for just $229,000.
It’s definitely not the only home at that price point in the area, either! There are any number of attractive properties in the small space between Lake Harmony and Big Boulder Lake. Properties here enjoy tons of summertime lake activities as well as easy access to popular ski resorts in the Poconos.
If we were going to buy a vacation property in a ski destination, we think we’d skip the incredibly expensive condos in Aspen – and head to the Poconos instead.
Over 13.1 million people visit Music City, U.S.A. every year to visit the Grand Ole Opry House, the Tennessee Performing Arts Center, and the Country Music Hall of Fame and Museum – along with countless other music and entertainment venues.
With such a thriving music scene, we were pleasantly surprised to discover Nashville remains thoroughly affordable, even close to downtown.
One Evolve owner’s 3-bedroom has been regularly making $40,000 a year in a townhouse close to downtown, while a another 1-bedroom in the Lockeland Springs neighborhood has easily brought in $30,000 – despite not being especially close! We think there’s great opportunity for an interested owner to create a home-away-from-home for some of Nashville’s many tourists.
Nashville does have some restrictions on short-term rentals, but the city has made it easy for owners to comply. They only allow a certain number of permits per area, but you can plug in the address of your rental-to-be in their STR Permit Availability website to be sure permits are still available in that neighborhood.
This pretty 3-bedroom with a gorgeous backyard, for example, is in an attractive neighborhood that still has permits available, and is close enough to downtown to make it a great option for visitors! We think we might just head over to the home of country music to hunt out the perfect Nashville getaway.
Though it was impossible to narrow it down to a single town, we couldn’t pass up the many opportunities for vacation rental investment along the Oregon Coast. From Rockaway Beach to Sunset Beach, there are any number of small beach towns that make for popular vacation destinations for families on the West Coast – and they can turn a substantial profit for a small investment.
Beachside getaways are always popular, but most people think they’d need to invest in destinations like Florida, Hawaii, or the Gulf Coast – all of which have so much competition that an annual income of $20,000 can be difficult to achieve. (Unless, of course, you’ve got Evolve in your corner.)
We just finished a case study for this lovely property in Gearhart, OR, which has brought in $23,623 in its first 4 months, while another house of similar size in Arch Cape has brought in $43,002 since the beginning of the year and is poised to break $50,000 easily by Christmas.
Instead we’d recommend checking out the Oregon coast for some beautiful properties with prime earning potential. We found this great 4-bedroom home just a few blocks from Rockaway Beach for $285,000.
There’s also this beautiful 3-bedroom property in Gearhart, where our Evolve owner has done so well, for just $290,000.
Where Would You Invest?
That’s what we’d do with our hypothetical $300,000 – but we’d love to hear from you! Where’s your dream vacation home destination?
Evolve ensures owners get the most out of their vacation rental investment with dynamic rates, fantastic marketing, and a full-time team of professionals fielding your inquiries, making bookings, and ensuring your guests have all the information they need to get the most out of their stay with you. Learn more about how Evolve helps owners get more bookings with less hassle here.