Last Updated Jun 10, 2010 6:45 PM EDT
If you're going to lay out the cash to buy a vacation home, you'll want to be sure you're buying in the best vacation home location.
But what makes a vacation home location great? According to Martin Slagter, VP of HomeAway, finding the best vacation home location for you starts with understanding exactly why you're buying a vacation home property.
Slagter says there are generally three reasons why someone buyers a vacation home:
- Family vacation destination. The vast majority of vacation home buyers are looking for a place they can use to help create family memories. Renting out the property may not even be a part of the equation.
- Future retirement home. Some vacation home buyers choose a location that suits their goals for retirement. These buyers might want to cover some of the mortgage and expenses by renting out the property part-time, but enjoy it themselves during the rest of the year.
- Vacation property investment. Some investors believe vacation locations are a good choice for a real estate investment and they look to rent out the property enough to not only cover all of the expenses, but generate a profit. They may also be looking at price appreciation.
- Rentability. How many weeks will a prime property be rented during the course of a year? And, how easy is it to attract renters?
- Year-round rental. Is the location a place that draws visitors year-round? An example would be Aspen, Colorado, which offers plenty to do in the Winter and Summer (plus great celeb-sighting potential).
- Supply/demand is in balance. You don't want to have an oversupply of vacation rental properties or the price/week will drop substantially.
- Homes are affordable based on future rental income. Are prices at a point where you can defray the expenses with expected rental income?
Best Vacation Home Location: Poconos, New YorkPoconos is a popular and more affordable vacation destination for those who live in the Northeast. Homeaway reports that demand from travelers is growing at 12 percent, while there is 0 percent vacation home growth, which is good from a rental revenue perspective.
The average 2 bedroom, 2 bath home for sale in Poconos is $181,938, according to HomeAwayRealEstate.com.
This Arrowhead Lake Vacation Rental Chalet has 3 bedrooms, 2 bathrooms, and indoor hot-tub, and sleeps 11. Amenities include a nearby lake, mountain, pool, tennis court, Internet access; rents from $500 to $900 per week. Special deal: $700 for Labor Day Weekend.
Best Vacation Home Location: New OrleansIn the first quarter of 2010, New Orleans ranked #3 among cities with the great growth in demand from travelers. It ranked #1 in the fourth quarter of 2009, with a demand growing at 183 percent. But the number of vacation homes available is low (there are only 38 homes available at HomeAway.com for rent in the city).
Another plus for vacation property rentals: Smith Travel Research said hotel rates in New Orleans didn't drop as much in the first quarter of 2010 as in other cities. Prices are still high, so renting a home is a much better deal.
This Authentic Greek Revival House on Magazine Street has 4 bedrooms, 3 baths, in 3,671 square feet and sleeps 12. Amenities include fabulous porch, gourmet kitchen, lovely garden and patio; $495 to $950 per night, $2,950 to $4,950 per week.
Best Vacation Home Location: Rehoboth Beach, DelawareRehoboth Beach, Deleware has shown steady increase in demand from travelers (19 percent) since the start of the year, according to the folks at HomeAwayRealEstate.com. And, there are more travelers inquiring about vacation rental properties than there are listings available.
This Rehoboth Beach Vacation Rental House has 7 bedrooms, 5 full baths, and 2 half baths in 3,500 square feet and sleeps 16. It's a block from the beach, offers its own Jacuzzi and screen-in porch, wine cooler and gourmet kitchen. It rents for $775 to $850 per night, $5,400 to $7,750 per week, or $18,500 per month.
Best Vacation Home Location: Austin, TexasI just returned from Austin, and while I had heard great things about it, I hadn't been there before. There are only 750,000 residents in town, making everything feel quite accessible. There are great activities, the airport is only 15 minutes from downtown, and the barbeque is fantastic (check out Ironworks the next time you visit).
The city has been voted the top 5 best places to live by a variety of magazines (including Kiplinger, Money, US News and World Report), offers year-round music festivals and other music-based events, and is one of the few metro areas in which home values have declined modestly during the current housing crisis.
As far as vacation rental property locations, Austin enjoyed an 82 percent growth in demand from travelers in the first quarter of 2010, on top of a 220 percent growth in demand from travelers a year earlier.
Located at the edge of Town Lake, this Brazilian Ultra-Modern Architect's Guest House sleeps up to four people in a spare one-bedroom 1 1/2 bath house. Amenities include biking distance to downtown Austin, walking distance to parks, the lake and bike trails, and two kayaks. It rents for $145 to $165 per night, $950 per week, or $3,700 per month.
Best Vacation Home Location: Santa Monica, CaliforniaSpending time in Santa Monica is always a joy. The weather is perfect nearly year-round. It's close to the beach, the Santa Monica Pier, great restaurants and shopping, and the city offers a fantastic farmer's market on Wednesdays, Saturdays and Sundays.
Turns out, Santa Monica is also a terrific vacation home location, with traveler demand up 104 percent in the first quarter of 2010 and few vacation homes for rent.
This Artistic Retreat, offers 2 bedrooms, and 2 baths in about 1,100 square feet. It's located six blocks from the ocean, just behind Main Street, and has a huge private yard and lovely redwood deck. Amenities include high-speed Internet.
- Worst Vacation Home Locations
- Who Will Live In Tipper And Al Gore's New $8.875 Million Montecity, CA Home?
- Sandra Bullock's House For Sale In Orange County
- 90210s Brian Austin Green is Delinquent On His Mortgage, Too
- Jon and Kate Plus 8 Finally Sell Their Starter Home
- Jon and Kate Plus 8 Can't Sell Their House Either
- Joan Rivers House Looks Better Than She Does
- Cher's Home In Hawaii Up For Auction
- 11 Kitchen And Bath Trends For 2010
- Who Bought Hugh Hefner And Playboy Wife Kim's House For $18 Million?
- What Can You Buy For $950,000?
- What Can You Buy For $625,000?
- What Can You Buy For $250,000?
Ilyce R. Glink is the author of several books, including 100 Questions Every First-Time Home Buyer Should Ask and Buy, Close, Move In!. She blogs about money and real estate at ThinkGlink.com.