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Vacation Rentals: Why You Should Buy & Where To Invest

Every day, more people are jumping on board the hottest investment trend: vacation rentals. From new Netflix series to a continual increase in Airbnbs over the last several years, you can’t seem to get the idea of vacation rentals out of your head. But, what’s so appealing about them in the first place? Why would you even want to buy and where should you invest? We’ve got the answers for you.

About Vacation Rentals

Typically, vacation rentals are homes that have been purchased as investment properties and are rented out to others for at least a small portion of the calendar year. While there are countless reasons people choose to own vacation rentals, these are some of the most popular:

  • Generate Income: By using your investment property as a short-term rental, you can take the money you earn and put it towards your mortgage or other future expenses. Just like your primary home, vacation homes build in appreciation too! Cha-ching!
  • Dual Purpose: Take advantage of your vacation rental by living in it part of the year and renting it out the rest of the year. Hello to endless “free” vacations (paid for with the revenue you generated, of course)!
  • Lifestyle Change: Break free from the typical 9-5 lifestyle while still having financial security and freedom. Whether you choose to make vacation rentals your full-time gig or use your earnings as supplemental income, you’ll start looking at your daily life from a whole new viewpoint.

Where To Invest and Why

As a future vacation rental investor, your mind may immediately go to the thought of buying in a larger city. While there is often a higher earning potential there, these type of investment opportunities could cost you a pretty penny due to an increase in demand in these cities. Rather, you might consider buying in alternative cities that are up-and-coming or simply cities that are less populated but still close to major hubs–often times, these cities end up sharing a similar earning potential to that of larger cities.

While it’s true what they say about location being everything, it’s important to keep in mind there’s also a niche for just about anything. So, as long as you do your research beforehand (you’ll want to pinpoint what renters search for in a good vacation home as well as what value a property will bring to others) and put in the work, you’ll likely be able to find success along the way. To help you brainstorm where you may want to invest, we’ve compiled a list of our 8 fave states and some of the top reasons why you’d want to consider purchasing an investment home in those areas.


Starting out West, we have the beautiful state of Colorado. First thought that comes to most people’s minds? The picturesque landscapes. From the Rocky Mountains to the Colorado River to the vast majority of national parks and forests, this is the perfect destination for any nature lover or adventurer, and the perfect place to invest in your future vacation rental home. While you can’t really go wrong with buying a home in any city here, we do recommend taking a look into cities just outside of the major hubs to get the most bang for your buck while staying close to all the top local attractions (word of advice: forget Vail, Aspen and Denver and check out New Castle).

New Jersey:

Making our way over to the East Coast, we have the fourth-smallest state in the US. Known by many as the location where a popular mid-2000s TV show was filmed, New Jersey is a state that packs a lot in: there’s beautiful beaches, booming casinos, lush agriculture (it is known as the “Garden State” after all), etc. To no surprise, one of the most popular areas to own a vacation rental is this state is along the Jersey Shore. Though, we personally can’t seem to get enough of the small historic town known by the name of Cape May — the perfect spot for a relaxing, quaint getaway alongside a breathtaking shoreline.

North Carolina:

Next up, we have the state of North Carolina which just so happens to be one of our team’s absolute favorite states. In the eastern corner, you’ll find the chain of islands known as the Outer Banks– this is a huge vacation spot that is continually growing in popularity thanks to its beautiful sandy beaches.  Going down the state you’ll hit Wilmington, a port city with a rich history in naval combat that just so happens to also be a huge tv/movie production site as well. Moving towards the western side of the state, you’ll run into Charlotte, a flourishing town with a big nightlife and plenty to do and see. Last, but certainly not least, is the town of Maggie Valley which is situated within the Great Smoky Mountains. Here, you get the best of everything within a close proximity– there’s downtown Asheville (only 35 miles away), Biltmore Mansion, Pisgah National Forest (which boasts stunning waterfalls), plenty of amazing wine tours and the list goes on.


Hopping over to the next state, we have Tennessee. While the clear hot spots are Nashville, Memphis and Graceland, there’s a lot more to this great state. Our pick? Chattanooga. Here, you can escape from the hustle and bustle of city life in this laid-back town that is nestled in the foothills of the Appalachian Mountains. Be sure to take a walk along the trails in Rocky City Gardens and visit Lookout Mountain (there may even be a series of cascading waterfalls hiding beneath the surface of Lookout Mountain). The great thing about buying a vacation rental in scenic cities like this is you can truly never get tired of experiencing the beauty of nature.


Next on the list, we have the “melting pot” of states. Famous for its cuisine, Mardi Gras season and music, Louisiana is truly a state like no other. While some come for the fishing down by the Gulf, the majority of others come to experience the city by the nickname of the Big Easy: New Orleans. Whether you’re one who wants to experience the lively downtown scene, the relaxed feel of the Garden District or a mix of both, the Greater New Orleans area is the perfect place to invest. Since the cost of living can be greater in the main city, buying an investment home on the outskirts in a city such as Covington where you still have plenty to do locally could be the way to go.


Moving one state over, we have Mississippi. Now, it’s likely that not many cities come to mind for buying a vacation rental when you think of this state, but you’d be surprised at all you can explore here (you might even consider it one of our best kept secrets when it comes for places to buy an investment home). For starters, the city of Tupelo is a big travel destination for fans of Mr. Elvis Presley. While most people know of Graceland as being where Elvis lived (which he did later in life), Tupelo is his actual birthplace. Other top cities? For beach lovers, Gulfport, Biloxi and Ocean Springs are the places to be (Ocean Springs in the smallest beach area of the three, which means less crowding and even more relaxation). Small historic town lover? Natchez may be just the fit for all your vacation rental wants and needs!


When you think of Alabama, what city comes to mind first? For most, it is the beautiful city of Birmingham. Not only is it a favorite among many education aspirants, but it is also home to world class medical research, a widely celebrated food and arts scene and so much more. While it is the most populous city in the state, there’s still a huge need for real estate investments to keep up with the growing demand of living here. Another city that may fit the bill for the perfect rental home? Gulf Shores. Not only is Gulf Shores a beloved travel destination for families and ocean fishers alike, but it also happens to be known for hosting some of the biggest beach parties come springtime (in other words, you could say it has something for everyone).


Last on our list, we have the beautiful Sunshine State. While we could of course touch on the perks of owning a vacation rental close to Disney (if that’s your plan, be sure to check out the Kissimmee area), we want to instead focus your attention on the Melbourne Beach area. Still within a reasonable drive to the attractions in the Orlando area, Melbourne is a small beach town without the touristy feel of the more notable beaches in Central Florida. It also resides within the Space Coast of Florida, aka home to NASA and the Kennedy Space. It is also home to the second busiest cruise port in the world! What’s this mean in terms of owning a vacation rental home here? Well, with the local economy consistently growing at a rapid rate here and considering the fact that over 6 million people booked a vacation home in Florida in 2019 (per Forbes), this is a spot where you’ll likely see a return on your investment year after year.

Ready to invest in a vacation rental? We can help. 

Getting info is just 60 seconds away on the form on the right.

Feel free to call us now at 407-330-7566!

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