Vacation homes are a commodity many Americans desire, but some view the cost as prohibitive in today’s floundering market. But if investors choose their vacation home’s location wisely and opt to rent out their vacation home while they aren’t using it, the property could prove to be a valuable investment. If nothing else, it may at least earn enough supplementary income to make the expense worthwhile.
When buying a vacation home, one of the most important factors to consider is location. Owning a vacation home is inherently different from simply renting a hotel room once a year. Vacation homebuyers are advised to travel to the area they are considering before making a purchase; owning a vacation home means the homeowners will likely spend a lot of vacation time there, so it’s important they enjoy the area. And when the vacation home is also an investment property, the location and surrounding market is even more important. Investors should look for an area that is not only has draw as a tourist destination, but also has a strong market with good appreciation and rent returns.
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With this in mind, here is NuWire’s list of the top 10 locations in the U.S.—including U.S. territories—to buy vacation rental property. The cities were selected based on a combination of their appeal as both investment and tourism locations. Factors such as home prices and appreciation rates were taken into consideration alongside issues such as weather and the availability of activities and attractions.
1. Ashland, OR
Population: 20,881
Median Home Price: $497,500
Appreciation Rate: 6.3 percent
Average Number of Rainy Days per Year: 101
Average Temperature: 61°F in July, 28°F in January
Ashland offers a fantastic range of activities coupled with the atmosphere of a small, laid-back college town. Perhaps the town’s greatest claim to fame is the Oregon Shakespeare Festival (OSF), a theatrical celebration that lasts from February through October every year. OSF puts on more than 780 performances yearly. But there are plenty more activities available for those looking for something other than Elizabethan theatrics. The nearby parks, trails and Siskiyou Mountains offer opportunities for visitors to camp, hike and ski to their hearts’ content, and holidaymakers can raft or kayak on one of the four nearby rivers. The Ashland Oregon Chamber of Commerce estimates that Ashland receives approximately 450,000 visitors each year, about 100,000 of whom come solely for OSF.
2. Grand Junction, CO
Population: 46,898
Median Home Price: $274,978
Appreciation Rate: 12 percent
Average Number of Rainy Days per Year: 73
Average Temperature: 79°F in July, 26°F in January
Many of the first dinosaur fossils were found near Grand Junction, including the first Stegosaurus ever discovered. Because of this, there are many dinosaur-related activities available in Grand Junction, from the typical museums and exhibits to opportunities to visit digs and hike through fossil quarries. Visitors can go whitewater rafting on the Colorado River or hike the nearby mesas. In the winter, the nearby Grand Mesa offers skiing opportunities. The Grand Valley area is also Colorado wine country, so wine enthusiasts can take advantage of the opportunity to tour some of the nearby vineyards.
3. Wenatchee, WA
Population: 29,968
Median Home Price: $319,900
Appreciation Rate: 13.6 percent
Average Number of Rainy Days per Year: 26
Average Temperature: 74°F in July, 27°F in January
Located at the heart of Washington Apple Country, the “Apple Capital of the World” hosts the yearly Washington Apple Harvest Festival in the fall and the Washington Apple Blossom Festival in the spring. Visitors interested in wandering the city will be pleased to discover the 11-mile Apple Capital Recreation Loop Trail along the Columbia River as well as Art on the Avenue, an outdoor sculpture tour covering 10 square blocks and featuring more than 30 mounted sculptures by well-known artists. Wine enthusiasts can pay visits to some of the Wenatchee Valley wineries, and those looking for a taste of the great outdoors have their choice of whitewater rafting, hiking, mountain biking or skiing at nearby Mission Ridge. Wenatchee is also less than an hour’s drive from Lake Chelan and Leavenworth, Washington’s quaint Bavarian-style village.
4. Guam (U.S. Territory)
Population: 173,456
Median Home Price: $155,500
Appreciation Rate: 7.25 percent
Average Number of Rainy Days per Year: 273
Average Temperature: 80°F in July, 78°F in January
For those looking for a more exotic location without dealing with the many travel and legal issues often associated with going to and from a foreign country, Guam may be worth some investigation. The island is a U.S. territory, which means U.S. citizens traveling from the U.S. mainland can get to and from Guam without a passport, according to the U.S. Department of State. Guam has a warm climate year-round and offers opportunities for vacationers interested in relaxing on the beach and taking in local culture. For those feeling a bit more adventurous, Guam offers some impressive diving, including the chance to see shipwrecks from World Wars I and II. Approximately 90 percent of the 1.17 million yearly international visitors to Guam are Japanese, so investors might want to consider hiring a Japanese-speaking property manager and advertising via Japanese channels.
5. Asheville, NC
Population: 72,789
Median Home Price: $317,500
Appreciation Rate: 7.89 percent
Average Number of Rainy Days per Year: 125
Average Temperature: 74°F in July, 38°F in January
The city of Asheville welcomed 2.76 million overnight leisure visitors in 2005, according to the Asheville Convention and Visitors Bureau. The city is within easy driving distance of Lake Lure and Lake Powhattan as well as the French Broad and Nolichucky Rivers. Visitors who feel like trying their stamina on the Appalachian Trail can get there easily from Asheville. Asheville is also home to several thriving artistic neighborhoods, such as the River Arts District. In the spring, flowers coat Western North Carolina with a rainbow of blossoms. Estimations of when various flowers are likely to be in bloom can be found on the Asheville Convention and Visitors Bureau website. Frommer’s named the area a must-see destination in 2007, according to the Bureau.
6. Miami, FL
Population: 404,048
Median Home Price: $358,098
Appreciation Rate: 0.27 percent
Average Number of Rainy Days per Year: 129
Average Temperature: 83°F July, 68°F January
Miami is one of the top U.S. destinations for international visitors, with 1.9 million international tourists arriving in 2006, according to the Office of Travel and Tourism Industries. Whether vacationers are interested in spring break-style mischief or just some time dozing on the beach, Miami has something for everyone. When it comes to beaches, this city is hard to top; the Greater Miami Convention and Visitors Bureau lists 16 local beaches on its website. Miami is also near The Everglades and Biscayne National Park, the only living tropical reef in the continental U.S. There are opportunities for visitors to swim with dolphins, cruise through Biscayne Bay, or even see a relocated twelfth century Spanish monastery.
7. U.S. Virgin Islands (U.S. Territory)
Population: 108,448
Median Home Price: $851,400
Appreciation Rate: 30.3 percent
Average Number of Rainy Days per Year: 60
Average Temperature: 85°F in July, 79°F in January
Another U.S. territory, three islands make up the U.S. Virgin Islands: St. Croix, St. John, and St. Thomas. St. John is the most expensive of the three islands, because it is small and two-thirds of it are taken up by a nature reserve which restricts building opportunities, according to GlobalPropertyInsight.com. St. Thomas is denser than the other islands because of the large number of cruise ships and greater commercialization, while St. Croix contains a large number of open spaces and undeveloped property which helps keep prices lower, according to GlobalPropertyInsight.com. Visitors can go snorkeling, scuba diving or windsurfing in the reefs and parks around the islands or hike in the National Park. The Islands also boast several golf courses and opportunities for horseback riding and biking.
8. Salem, OR
Population: 152,239
Median Home Price: $238,000
Appreciation Rate: 5.91 percent
Average Number of Rainy Days per Year: 146
Average Temperature: 67°F in July, 40°F in January
Salem, the capital city of Oregon, is located in the Willamette Valley. Wine buffs will enjoy the chance to visit the many local wineries and vineyards in the area. The Oregon Garden, which covers 80 acres, is located in nearby Silverton. In addition to opportunities for boating, cross-country skiing and hiking, Salem hosts the Salem Art Fair & Festival every summer, the largest juried art festival of its kind in Oregon, according to the Salem Art Association. The Salem Art Association estimates the Art Fair’s average attendance to be more than 100,000, and the event is free to the public.
9. Salt Lake City, UT
Population: 178,858
Median Home Price: $295,527
Appreciation Rate: 9.68 percent
Average Number of Rainy Days per Year: 91
Average Temperature: 78°F in July, 28°F in January
With a mountain range on either side—the Wasatch to the east and the Oquirrhs to the west—Salt Lake City is ideally situated for activities such as hiking, rock-climbing and mountain biking. And, of course, during the winter there are ample opportunities for skiing; Utah is home to the Greatest Snow on Earth and there are ten “world-class” ski resorts in the area, according to the Salt Lake City Convention and Visitors Bureau. Visitors can take cruises on the Great Salt Lake, learn about Mormon history or attend a concert by the world-renowned Mormon Tabernacle Choir.
10. Coeur d’Alene, ID
Population: 553
Median Home Price: $249,900 (for Kootenai County)
Appreciation Rate: 1.83 percent
Average Number of Rainy Days per Year: 54
Average Temperature: 66°F in July, 22°F in January
Couer d’Alene is located in Northern Idaho’s Kootenai County. Nearby Hayden Lake has approximately 40 miles of shoreline because of its irregular shape and has one beach, called Honeysuckle Beach, open to the general public. There are six major ski resorts within 45 minutes to an hour and a half of Couer d’Alene, as well as bike trails, golf courses and opportunities for camping, hiking and snowmobiling, according to the Hayden Chamber of Commerce. The city of Hayden contains most of the local shops and services.
Population statistics are from U.S. Census data.
Property value information is from Zillow.
U.S. city appreciation rates are from the Office of Federal Housing Enterprise Oversight.
U.S. territory appreciation rates are from GlobalPropertyGuide.com.
Weather data is from Weatherbase.
