Investing in the best rental property/location?

[Diana Wise]

Hi I want to invest in a short term rental property and wondering the best location for that property.  Is it better to buy on the beach (Destin, SC, NC) golf location (Destin, Hilton Head) or Historic location (Savannah, GA, Wilmington, NC)?

Looking to spend under 400,000 and get a decent return on my investment but not sure where gets the most for my buck on the location.

Please help on any advise.

Diana

[Zach Westerfield]

Hi Diana,
Just wanted to chime in with my perspective since I am also hoping to get into vacation rentals.

Personally I think right now the vacation rental market is really high. In my area (Destin) it is near or above 2008 levels in many places. I think based on historical economic cycles we are due for an economic correction in the next 1-3 years. When that happens vacation rentals are usually among the first to get hit. My plan is to hold out and wait for this correction. I see that as the best way to pick up something that actually achieves a good return. Short term rentals have tons of hidden fees and expenses that eat into returns, so you really have to buy low to get a good return.

For example I have a friend who bought 6 vacation condos at once on nearby okaloosa island around 2009. I think he only paid $300k total. Today they are worth at least $200k a piece, and he cash flows nicely.

Just my two cents