How To Hunt For A Vacation Home Outside The City
Thinking of springing for a vacation home this summer, or just armchair shopping for one? Us too. Last summer, we looked into the lay of the land for vacation properties in areas like the North Fork and the Catskills, and in seaside neighborhoods within the five boroughs. Read on for tips on house-hunting for a reasonably priced summertime set-up, and for some dreamy looking listings:
This $550,000 4-bedroom Riverhead vacation home has views of the water, easy access to Bay Beach, and an in-ground outdoor pool in the backyard.
THE NORTH FORK
Even though it’s supposedly gaining traction with the “hipster” set, Long Island’s North Fork is still far more affordable than its neighbor to the south, the Hamptons. There are currently more than 200 homes for sale for under $500,000, according to StreetEasy, especially if you move away from the trendy Southhold neighborhood. Plus the area has a burgeoning wine industry to help you unwind on the weekends. For more tips on buying in the North Fork, check out our guide here.
For $699,562, you can snag a 1-bed, 1-bath cottage with renovated interiors and views of the water.
While $215,000 might not even buy you a studio in Manhattan, in Catskill, it would net you this three-bedroom, one-bath Colonial that has a screened-in sitting porch and vegetable garden.
Harbor Springs And Bay Harbor Michigan
Emmet County in Michigan has seen a surge of demand for waterfront properties since June 2020, and it’s showing no signs of slowing down, according to White. “The demand is incredibly high for those looking for a second home on the water, and both towns are prime destinations for vacationers and residents alike,” he said.
These serene resort communities on Lake Michigan attract visitors of all ages year-round with their charming lakeside dining and shopping spots, golfing, fishing, and sailing opportunities, as well as their overall laid-back vibe. Fall foliage here is absolutely stunning, and when the first snow transforms the area into a winter wonderland, you can try snowshoeing, cross-country skiing, and snowmobiling.
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Can I Rent Houses In New York
Yes, of course. Vrbo has 766 Houses in New York. Our other popular types of vacation rentals in New York include:
- Condos/Apartments: 2,342 rentals available
- Cabins: 6 rentals available
- Townhouses: 88 rentals available
But you can also enjoy a great stay in one of our other vacation rentals including Studios and more.
Best Places In Every State To Get A Vacation Home
These are the best vacation home locations in the U.S.
Read More: Cost To Own a Car for a Year in Every State
To determine the best place to buy a vacation home in every state, GOBankingRates looked at the top vacation destinations in each state and cross-listed those locations with the median home value and the median rent for each destination. Keep reading to see where you should get a vacation home in your state.
Median home value: $240,600Rental yield: 6.97%
Alabamas Gulf Shores boasts 32 miles of white-sand beaches and attractions such as golf courses, nature trails and water sports perfect for retirees. The average annual rental income in the area is $16,764.
Median home value: $298,300Rental yield: 7.43%
The average rental home in Anchorage can yield $22,152 in annual income. Tourists are drawn to the Alaskan city for its metropolitan amenities and its convenient location. Its just a short drive away from glaciers and natural parks.
Median home value: $237,800Rental yield: 6.68%
Lake Havasu City, known as Arizonas playground, has 400 miles of coastline, 300 days of sun each year and 60 miles of navigable waterways. People flock to the area for the numerous activities available, which include boating, hiking, biking, fishing and golfing.
Median home value: $117,100Rental yield: 10.1%
New York: Saratoga Springs
Median home value: $329,700Rental yield: 8.11%
Visitors to Saratoga Springs come for proximity to winter sports and the ice bars in the winter, horse racing at the Saratoga Race Course and top-flight entertainment at the Saratoga Performing Arts Center in the summer, and the mineral springs throughout the year. It takes an average of about 12 years for rental income to pay off a home purchase in the area.
North Conway New Hampshire
With nearly 13 nearby ski areas, North Conway is a beloved ski village in New England. This New Hampshire locale is in the heart of the White Mountains region, making it a year-round magnet for nature-seekers who come to swoosh down the slopes, hike, golf, fish, and enjoy some of the countrys best leaf peeping.
All of this makes North Conway a prime spot for vacation rental owners who want to provide a home base for outdoorsy, family-friendly, or group travelers. Its even ideal for urban travelers, like those coming from Boston, who crave a private, luxurious vacation.
That said, when looking to buy in this area, our RES team says to keep an eye out for vacation homes that sit close to the slopes or have luxury amenities, like fireplaces and hot tubs.
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Can You Rent Your Vacation Home Out
The short answer to this question is “yes.” But doing so could have major tax implications.
Remember the IRS threshold that distinguishes a sometimes-rented vacation home from an investment property? If you rent your property out, you need to occupy it for at least 14 days during the year or at least 10% of the number of days you rent it out. If you do, you can treat the vacation home as a secondary residence for tax purposes. If not, the IRS considers it an investment property. That’s regardless of whether you primarily bought it for investment purposes.
Lets start with the common implications. No matter how a rented property is classified, you must report rental income on your tax return. You can also deduct certain expenses from it. Imagine that you earned $5,000 of rental income last year and spent $2,000 on maintaining and repairing the property. In this case, you’d have $3,000 in taxable rental income.
Heres the important part. If the IRS considers your vacation home an investment property, you cant use the mortgage interest or property tax deductions. You can, however, deduct those from your taxable rental income and use the investment property depreciation deduction. That can have a big impact on your tax liability. In fact, many profitable investment properties show a loss for tax purposes because of the valuable tax benefits available to them.
Take The Next Step With Evolve
Investing in a vacation rental property is a personal decision, but you dont have to navigate your options alone. Whether youre drawn to one of our tried-and-true hotspots or enticed by the untapped potential of an up-and-comer, our Real Estate Services team can help you take the next step.
We have the data to help identify your investment opportunities and financial goals, preferred local real estate agents who specialize in vacation rental purchases, and a team of experts available to manage your property once youve closed on your vacation home and are ready to jumpstart your business.
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What Makes For The Best Places To Buy A Vacation Home In New York State
You might be noticing a trend here. It seems that real estate investing is all about asking the right questions and finding the best answers. Thatâs why it is time to address another one of the many real estate investments questions: What makes for the best places to buy a vacation home in New York State? Like you must know as a new or experienced real estate investor, location is everything in real estate investing. The location of an investment property â be it a vacation home, a single family property, an apartment, or a condo â is the key factor determining the success of a real estate investment. And naturally the success of a real estate investment is determined by its profitability, or how much money it will be able to make for its owner. In other words, to make things as simple as possible for new or experienced real estate investors, the best location to buy an investment property is the location which will generate the highest return on investment.
Cash on Cash Return
In case you need to refresh your memory on how to calculate cash on cash return for a real estate investment property, here is the formula:
Cash on cash return formula:
Cash on Cash Return = Net Operating Income /Total Cash Investment
Airbnb Rental Strategy
Top Cities For A Second Home
If you dont have your heart set on living in any particular part of the country but feel youre financially ready to buy a second home, consider any of the following cities to settle down. With low median housing prices, relatively low property crime rates and high walkability scores and comfort indexes, these cities are perfect for families and young homeowners alike.
To learn more about what makes these cities so exceptional, keep reading for our regional breakdown.
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The Smartest Places To Buy A Vacation Home
Technically speaking, the cap rate on a rental property is the net operating income a rental property can produce divided by the property cost. As a result, the best places to buy are not necessarily the places where property is cheapest, Property prices in several locations in the survey are high, with median home sale prices of $763,109 in Key West, $708,161 in Kihei, Hawaii, and $639,000 in Marathon, Florida, but the cap rates are good because rental income is also high.
Best Spot For A Second House
Was wondering about good value spots for a vacation home. Not talking Hamptons, been talked to death. I’m talking about somewhere where you can get some land and a small house for a few hundred thousand. Somewhere a little “away” but not that hard to get to, with some sort of town nearby. Train access is nice, but driving is doable. Near water is nice, but not critical. I guess we’re really…
Was wondering about good value spots for a vacation home. Not talking Hamptons, been talked to death. I’m talking about somewhere where you can get some land and a small house for a few hundred thousand. Somewhere a little “away” but not that hard to get to, with some sort of town nearby. Train access is nice, but driving is doable. Near water is nice, but not critical. I guess we’re really talking a step or two up from “cabin in the woods”.I’ve been checking out…East side of hudson – close to more frequent trainsWest side of hudon – a little more rural, dollars go furtherClassic catskills What about popping in down the jersey shore but just off… something like a Tom’s River.Anything else I should be looking at?
SWEIve been thru this excercise a few times, studying maps, looking lake areas upstate, Vermont, Pennsylvania, any affordable sandy ocean beachfront, etc.
But I do still look. Cannot believe how expensive Lake George is.
Now of course there was some bad luck with trying to rent out 2nd houses and follow up may not have been the best. But that’s what happens.
Bryson City North Carolina
Small-town charm meets laidback mountain vibes in Bryson City, a place that still feels a bit undiscovered. This North Carolina neighbor to the Great Smoky Mountains is a quieter alternative to Sevierville and other Eastern Tennessee hotspots that border the tourist-heavy national park.
With a population of just 1,300, Bryson City has an arts-centric, walkable downtown with local bookstores, murals, galleries, and breweries. The Tuckasegee River also cuts through downtown, and is a spot to kayak, paddleboard, or fly fish.
The average listing price for homes in Bryson City sits right around $195,000, making it an ideal consideration for new vacation rental investors. Plus, our RES team says smaller cabins have the potential to perform well here, which means homebuyers can turn a hideaway cabin into a short-term rental gem.
If inventory is limited in Bryson City, our RES team also recommends checking out nearby Maggie Valley, a special spot where the Smoky and Blue Ridge Mountains meet.
Transportation Options To And Around New York
Fly into New York, NY , the closest airport, located 6.1 mi from the city center. If you can’t find a flight that’s convenient for your trip, you could also fly into Teterboro, NJ , which is 7.9 mi away.
If you’re traveling by train, New York W 32nd St. Station, New York Grand Central Terminal Station and New York Penn Station are the main stations in the area. You can see more of New York by jumping on the metro at Times Sq. – 42 St. Station, 42 St. – Port Authority Bus Terminal Station or 49th St. Station.
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Is Buying A Vacation Home The Right Move For You
Theres a lot to consider before deciding whether a vacation home is a good idea for you. Be sure to weigh the pros and cons, consider the tax implications, and know what to expect when it comes time to apply for financing.
Purchasing a vacation home isn’t a decision to be taken lightly. Make sure you know what youre getting into before you start looking for a vacation home of your own.
Factors To Consider Before Buying A Vacation Rental Property
Personal use: One of the benefits that motivate individuals to buy a vacation investment property is personal use. Many individuals enjoy being able to visit the property for vacation purposes, and also to be able to lend the property to family and friends. It is important to ask yourself if the investment is more important to you personally or financially, as the answer can affect your strategy.
Rental income: If you own property in one of the best vacation rental markets, then perhaps rental income will be produced in a steady stream. However, not all markets will be conducive to creating an income stream that will consistently cover all expenses. If creating cash flow is your primary motivation behind investing in a vacation rental investment property, then it is worthwhile to consider one of the top vacation rental markets or to invest in a traditional rental property.
Appreciation: In addition to rental income, an important factor to consider is property appreciation. Although real estate market predictions are predominantly speculations, investors should keep in mind that many markets can have big price swings in correlation with the current economic landscape. Investors who carefully research markets that are conducive to property appreciation, in the long run, will be best prepared to build equity over time.
Now that you know the most important factors to consider before purchasing a vacation rental property, lets dive into where exactly you should be investing.
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How We Chose The Best Places To Buy An Investment Property
The By the Numbers data below is based on a combination of proprietary and public data, but the three main metrics we took into account are:
- Vacation rental performance metrics across the U.S. to learn where bookings lead to higher median revenue
- Zillows 2021 median home value to identify listing prices
- Estimated yearly expenses to run a vacation rental to help calculate cap rate
We also evaluated a propertys potential to outperform market expectations with an Evolve partnership. Below, youll see The Evolve Difference, showcasing how we helped some of our top owners maximize income in each area, resulting in them significantly surpassing the markets projected revenue.
Best Vacation Rental Markets 2021
The qualifications used to determine the best places to buy vacation rental property are, at the very least, subjective. If for nothing else, people choose to vacation in many different parts of the world for many different reasons. What one person may deem the perfect vacation rental, another may completely disregard. However, a few market factors can help investors take a more objective approach in determining the best vacation rental markets. This includes looking at statistics on property price, average rental income, occupancy rates, and cash on cash returns.
According to an analysis by Mashvisor, data released from Airbnb is also crucial in determining the potential success of a vacation rental marketas it remains one of the most popular platforms for short term rentals. All things considered, the following markets are predicted to be among the best vacation rental markets of 2021:
Berkeley, New Jersey
Airbnb Cash on Cash Return: 9.2%
Airbnb Daily Rate: $283
Average Price per Square Foot: $190
Average Days on Market: 61
Traditional Cash on Cash Return: 3.2%
Traditional Rental Income: $1,376
Price to Rent Ratio: 17
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Cool Calculations: The Numbers Behind The Hottest Locations
First, its important to understand cap rate and how it will impact your short-term rental. Cap rate is the ratio of a propertys net operating income over its cost.
To determine net operating income for the report, I first calculated gross rental income for each market. From there, I subtracted each markets average operating costsfactoring in things like management fees and property tax rates. Finally, I divided those figures by the cost of buying a vacation rental to determine cap rates for each market.
Below are the best places to buy a beach house this year. Everything from Washington state to the Gulf Coast made an appearance on the listand for good reason. While cap rate was a major factor, other data that influenced the list included buying opportunity in the market, median home cost, and median annual gross rental revenue. Of course, regulations played a key role, as well, and only vacation rental-friendly beach towns are included.