The Florida Panhandle leads the list of "100 Best Places to Buy a Vacation Rental in 2020" in a market much changed by the coronavirus pandemic. That's according to an analysis by Weiss Analytics done for the rental revenue management firm Rented Inc., which concluded that "travel doesn't stop when the economy weakens, it changes where people travel."
The report based its assessment of return on investment potential for a three-bedroom, two-bath, standalone vacation rental home on these factors:
- Cost to acquire.
- Cost of homeownership.
- Short-term revenue potential.
- Annual appreciation.
- Projected changes.
- Asset value.
From the South Jersey Shore to the Rockies
Close behind the Florida Panhandle were the South Jersey Shore, the Pennsylvania Poconos, Tennessee's Smoky Mountains, and Central Texas. The bottom five of the top 100, in order, were the Idaho Panhandle, St. Simon's Island in Georgia, Killington in Vermont, Summit County in the Colorado Rockies, and El Paso, Texas.
You can download the entire report here to find out more about how the locations highly ranked in this fifth annual version of the Rented study are "Instagram-worthy, outdoor locations" and about how "the highest returns come from homes that enhance the guest experience.". Alternatively, you can read the Millionacres guide to the best places to a rental property in 2020.
Negotiating power and long-term views
The report noted a "dramatic shift" this year to drive-to destinations and markets within two to five hours of major metros. "Fly-to and urban markets have taken the most substantial revenue hits," the report said, "but these are short-term and might provide more negotiating power in real estate purchase negotiations."
Allan Weiss, the founder of Case Shiller Weiss and now CEO of Weiss Analytics, noted that the pandemic is changing real estate market conditions across the nation. "The realignment of housing markets is creating new opportunities for investors who do their research and take a long-term view of the potential for markets that have been overlooked," he said.
The report strives to help with what Rented Inc. says is a very decentralized and independent vacation rental industry characterized by a notable lack of centralized data on the web or in the cloud.
"Properties that take advantage of updated listing and pricing optimization policies are likely to outperform the market in these areas, but there isn't enough objective data to use in the decision-making process," the report says.
Read the whole report for more information about how to assess a property for potential purchase, how to familiarize yourself with essentials of ownership, such as average daily rates for rentals, and about the importance of frequent pricing changes to such listing sites as Vrbo, Airbnb, and Booking.com.
Of course, Rented Inc. wants to sell you their revenue management and deeper insights available from their services. But the report itself is a good start for thinking about where you might want to explore vacation rental investment options.