Tennessee and Florida Among Best Places to Buy Vacation Rental Property in 2019

Rented.com has released their annual report for 2019 which ranks the best places to buy vacation rental property in the United States, and cities in Tennessee and Florida rank high at the top of the list. The report ranks the cities by ROI, juxtaposing the costs of home ownership and the short-term rental potential while also considering factors like local property taxes, home insurance costs, and short-term rental regulations in the areas. With these factors in consideration, Rented.com has given each city a score out of 100 in order to rank their list of the 150 best American cities to purchase vacation rental property.

With Tennessee and Florida both having two cities in the top five, Rented.com stipulates that this is indicative of a resurgence of traditional vacation destinations that aren’t suffering from heavy urbanisation and uncontrollable real estate prices. Once dominant states like California, Colorado, and Massachussets have started to fall off, largely due to housing shortages and increasing costs of living. Meanwhile, cities in states that are more affordable and that offer more family friendly vacation destinations rank higher, especially due to their ability to remain as popular vacation destinations even during an economic downturn or recession.

A large part of evaluating these cities for their potential ROI as a vacation rental property is their stance on vacation and short-term rentals. Cities in states with well-defined and fairly fixed regulation that is easy to comply with are a much safer and better performing investment compared to those which are still figuring out how to deal with the massive increase in demand for short-term rentals. This is part of why we’ve seen the emergence of smaller and more unexpected cities with relatively low market housing prices, but that are still moderately attractive vacation spots without excessive regulation starting to creep up the rankings.

Another important factor in these evaluations is the climate year-round, with states and cities that have moderately mild winters and fairly pleasant climates throughout the year performing best. Of the top 25 ranking cities, six were located in Florida, four in Tennessee, and two each in South Carolina and Texas, with all fourteen of these cities considered to have mild winter climates with temperatures rarely falling below the freezing point. These areas ultimately have longer tourist seasons and offer a steadier stream of occupants. This ends up being much more favorable for ROI compared to cities and states which have large upticks in vacation rental popularity only in shorter and more restricted seasons.

The report reminds readers that investing even in healthy markets requires significant consideration, especially when it comes to buying property. Always take great caution to consider all factors carefully before investing in any markets or property. If you’d like to read the report you can find it here.