US: Rented.com has published its first Short Term Rental Income Report.
The report highlights the best places to buy rental property in the US in 2016.
Looking at the costs of home ownership versus the short-term rental potential across 120 US markets, Rented.com has provided “the first publicly available objective assessment of short-term rentals from an investor’s perspective”.
The costs of home ownership include a variety of factors from purchase price and local property taxes, to home insurance, maintenance, and more. The short-term rental potential pulls from a variety of sources, including actual Rented.com demand from management companies in these markets, Everbooked occupancy and rental rate projections, and the current legal situation in each market.
As all of these factors are subject to change, Rented.com will update the report at least annually.
Surprisingly, well-known vacation rental markets such as Aspen, Nantucket and the Hamptons feature towards the bottom of the list, while lesser known locations like Panama City Beach, Gatlinburg, and Galveston take the top spots.
Rented.com says: “It is not the flashy markets with the highest nightly rates (and also many of the toughest HOA and rental restrictions) that are necessarily the best investments. If they are popular with everyone, the purchase price is also high, diminishing any potential returns. On the other hand, less well known markets that are still popular with travellers (markets like Gatlinburg where you can find a five-bedroom house for less than $300,000) can make great investments. Because these markets are often highly dependent on vacation rentals to drive visitors and bring money into the coffers of the local government, they also tend to be some of the most friendly towards short-term renting. These markets bring together a killer combination from an investor’s perspective: attractive purchase price, relatively high rental demand, and typically light regulation.”
Florida features four out of the report’s top ten spots “given the state government has explicitly recognised and embraced the positive economic benefits from short-term rentals, and thus has banned local governments from restricting them”.
The 10 best performing markets in terms of ROI were:
Panama City Beach, Florida
Gatlinburg, Tennessee
Galveston, Texas
Palm Coast, Florida
Savannah, Georgia
Kissimmee, Florida
Snowshoe, West Virginia
Daytona Beach, Florida
Fort Myers, Florida
Los Angeles, California
And the 10 worst were:
Nantucket, Massachusetts
Beaver Creek, Colorado
Aspen, Colorado
Telluride, Colorado
Palo Alto, California
Naples, Florida
Hamptons, New York
Crested Butte, Colorado
Bar Harbor, Maine
Truckee, California
To get an insight in to the rise of the short-term rental phenomenon, click here to see a presentation by Tom Caton of Airdna on the growth of Airbnb.
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