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Mountain, lake, and coastal destinations offer broad views for vacationers — and now, even broader shoulders for the people who rent vacation homes there.
The work-from-anywhere flexibility jump-started by the pandemic has not only expanded demand overall for these kinds of locations but has also helped add to the income that real estate investors might expect to reap from the “shoulder months” around the peak seasons.
As an example, AirDNA — a short-term analytics firm that specializes in VRBO and Airbnb data – says October 2021 occupancy at mountain/lakes destinations for those two services was 55.7%, compared with 56.2% in July 2019, the highest for all months during that pre-pandemic year.
Using 45% occupancy for a month as the break-even point, only the months of March (spring break) and June through September met that mark before the pandemic. Expanding business in those shoulder months can quickly make a big difference to the owners and managers of those short-term stay properties.
“Many destination/resort markets rely on just a few months to earn enough revenue to make their listing profitable,” AirDNA said in a Jan. 3 blog about changing seasonality trends. “If the number of profitable months rose by even just one, it could dramatically increase an investment’s revenue and turn an unprofitable investment into a sure thing.”
And the shoulders are indeed broadening, rather dramatically. July and August had been accounting for 87% of what AirDNA calls “excess demand,” the business that happens after that 45% occupancy mark, but in 2021, excess demand for those two fell to 28% as excess demand expanded by 200% for all of March through October.
That said, summertime is probably still when most people think of vacation, and here’s a look at five markets that could be ripe for the picking when it comes to choosing where to invest in a short-term rental now.
They’re in alphabetical order and are from AirDNA’s list of “The Best Places to Invest in Vacation Rentals,” which assigns locations a score of up to 100 based on such factors as revenue demand, growth, and potential.
1. Charleston, South Carolina
In recent years, this historic city on the harbor where the Civil War began has become an international destination for foodies and destination weddings and sightseeing in preserved plantations and downtown neighborhoods. AirDNA gives the Holy City — a nickname derived from the historic churches that dominate its carefully controlled skyline – a score of 99 for investability.
2. Kennebunkport, Maine
Kennebunkport is known for such attractions as its beaches and boat tours, lighthouses, boutiques, and accessibility. It’s less than a hundred miles from Boston, and its picturesque setting and all those other offerings make it a particularly attractive work-from-home destination. AirDNA gives this Maine hotspot a 99 for investability.
3. Lahaina, Hawaii
Lahaina is what Hawaii’s all about, with classic island dining, luaus, whale watching, scenic drives into the countryside, and its status as the capital of the former Hawaiian kingdom. It’s not a cheap place to invest, but AirDNA gives this location on the west side of Maui a perfect 100 for investability.
4. Marathon, Florida
It’s not a marathon to get to Marathon. This Florida Keys community of 13 islands is about 90 miles from Miami and 45 from Key West. Take the Overseas Highway (U.S. 1) south from the mainland and you can’t miss it. Investors can leverage the attraction of beaches, mangrove creeks, epic fishing and boating, and a nice downtown in this hotpot that earned a 100 in investability from AirDNA.
5. West Glacier, Montana
West Glacier is different than the rest of the spots on this short list. For one, it’s an unincorporated community of only a few hundred permanent residents that swells significantly during the summer. For another, it serves as the western gateway to spectacular Glacier National Park. Fishing, hunting, hiking are just a few of the attractions, along with the scenery. Amtrak still serves the hundred-year-old train station. There’s a commercial airport about 30 minutes away. AirDNA gives West Glacier an investability score of 100.
A big country with lots of choices
These are some of the best-known destination spots on the extensive list offered by AirDNA. They split it into market sizes, and there are plenty of highly ranked destinations across the country that may not be major attractions but could well serve as a profitable investment serving those types of travelers looking to stay a while at a nice place to work and play. If you’re interested, now’s the time.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
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