By The Hospitable Team
Looking to buy a vacation home at the beach and rent it out short-term on Airbnb? Beach houses have long been desirable properties in real estate, but not all of them are created equal. So, where should you look to find the best place to suit you and your family and be appealing to guests when not in use?
In this blog, you’ll find a list of the best places to buy a beach house in the US. It is based on the data provided by Mashvisor, a company that offers location and investment property analytics to help real estate investors analyze properties for traditional or Airbnb rental potential.
Buying Beach House: What Are the Pros?
Buying a beach house is an excellent opportunity to earn a stable income by renting it out during the peak season when you’re not using it. On average, beach property attracts a higher rental income than vacation rental homes that don’t offer beach amenities or something similar. So you’ll be able to charge higher prices per night and have more chances of turning a profit quickly.
Another advantage is that you’ll have your holiday escape from urban life and won’t have to pay for accommodation while on holiday. No planning is required when you want a beach vacation. You can simply block out your availability calendars on OTAs and enjoy time with friends and family.
Buying a Beach House for Rental Income: Things to Consider
If you are willing to spend time researching a profitable location and finding a property with great earning potential, buying a beach house can be a good investment strategy for a vacation rental business. But if you want to become a successful host, you should be ready to work hard to create an attractive Airbnb listing and provide your guests with a perfect experience to make them happy. Then you are more likely to get great guest reviews that can win you more bookings.
The most important aspect of Airbnb hosting is communication with guests before, during, and after their stay. Messaging with your guests can be very time-consuming, but you can automate this process with tools like Hospitable.com and reply to guests almost instantly.
Have conversations with your guests even when you sleep.
So how to define the top locations to own a beach rental property? Some important metrics help choose the right neighborhood for profitable properties to rent out through Airbnb:
- Median property price—make sure you can afford to buy a beach house in the area.
- Airbnb monthly rental income—you can only make money if your rental income exceeds expenses and you have a positive cash flow.
- Airbnb cash on cash return is a return on investment metric that tells you what your profit is, taking into account how much money you put into your investment
- Airbnb cap rate is calculated by dividing the net operating income of a vacation rental property by the current market value of the property; a higher CAP rate means a better investment, but it’s also riskier.
- Airbnb occupancy rate is a major determinant of rental income and profitability for short-term rentals; the higher the occupancy rate, the better.
- Average Airbnb daily rate—your daily rates should be comparable to those in the market to ensure maximum occupancy rates.
You should also remember that while buying a beach house for rental income comes with benefits, it can be risky. So before taking the plunge, you should consider such things as choosing the right location and calculating expenses related to owning a beach house. It’s also important to know the local laws and regulations that may restrict short-term rentals in the chosen location. Check them before making an investment decision.
Best Places to Buy Beach House
If you are thinking about investing in a second home located by the beach, here are 15 of the most attractive oceanfront destinations to buy a beach house. We created this list using data from Mashvisor based on the metrics we’ve mentioned above.
Location | Median Property Price ($) | Average Airbnb Daily Rate ($) | Average Airbnb Occupancy Rate | Average Airbnb Monthly Rental Income ($) | Average Airbnb Cash on Cash Return (%) | Average Airbnb Cap Rate (%) |
Daytona Beach, Florida | $458,937 | $197 | 45 | $3,089 | 4.52 | 4.65 |
Murrells Inlet, South Carolina | $442,826 | $219 | 53 | $3,239 | 4.41 | 4.52 |
Traverse City, Michigan | $648,403 | $228 | 46 | $3,771 | 4.03 | 4.11 |
Lahaina, Hawaii | $1,575,589 | $368 | 64 | $7,893 | 4.03 | 4.06 |
Gulf Shores, Alabama | $688,871 | $242 | 55 | $4,128 | 3.89 | 3.96 |
New Buffalo, Michigan | $1,050,233 | $418 | 45 | $4,383 | 3.64 | 3.70 |
Corolla, North Carolina | $722,536 | $511 | 39 | $3,778 | 3.28 | 3.33 |
Myrtle Beach, South Carolina | $383,921 | $159 | 48 | $2,662 | 3.07 | 3.16 |
Cape Coral, Florida | $603,417 | $194 | 50 | $2,737 | 2.76 | 2.82 |
Rockaway Beach, Oregon | $633,530 | $239 | 46 | $2,748 | 2.68 | 2.73 |
Hatteras Island, North Carolina | $668,383 | $232 | 40 | $3,132 | 2.43 | 2.46 |
Isle of Palms, South Carolina | $1,442,833 | $458 | 50 | $5,808 | 2.38 | 2.40 |
Galveston, Texas | $553,470 | $215 | 38 | $2,451 | 2.17 | 2.23 |
Ocean Shores, Washington | $443,164 | $194 | 43 | $1,856 | 1.70 | 1.74 |
Port St. Joe, Florida | $769,823 | $276 | 40 | $3,219 | 0.94 | 0.96 |
If you’re looking for a summer beach house, one of these locations could be a great investment option. The amount of rental income you can earn will depend on the beach house’s size, the amenities you offer, and the number of channels you use to market your property.
It’s also crucial to be as cost-efficient as possible by streamlining routine tasks related to running your business. Vacation rental software like Hospitable can help you maximize your revenue and ROI by offering advanced automation tools for every aspect of your vacation rental management.
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And remember that buying a beach house in a popular tourist destination is only the beginning of a journey of running a short-term rental business that lies ahead. You’ll need to make your property attractive to guests by offering amenities, furnishing, and decorating your beach house to create an environment your guests will love. Check out our Airbnb interior design tips to style your property and charm your guests. Think about what personal touches you can add to your rental space to make your guests feel at home.
Final Thought
Beach properties are very popular for second home purchases because beach destinations nearly always drive a steady stream of guests. So your vacation home on a waterfront can serve as a place to get away with family and friends during summer and as a source to earn rental income if you list it on Airbnb, Booking.com, or Vrbo.
Hopefully, our list of the best places to buy a beach house will get you a good idea of the most profitable beach destinations in the US. It’s not exhaustive, but it provides a great place to start looking. And as the market is always changing, you should also do your research to make a well-informed decision.
Besides, it’s important to study your target market to better understand the needs of your potential guests. That will help you offer the right amenities and charge a reasonable price.
Best Cities for Airbnb Investment 2023
In the past decade, short-term rentals have become a more profitable strategy for most markets worldwide than renting property long term. If you plan to buy a short-term rental property in the US, you will be interested in this article, prepared together with Mashvisor.
Mashvisor Review: How It Can Help You Make the Smartest Short-Term Rental Investment Decisions
Successful short-term rental investments are not based on intuition, guesswork, or luck. If you want your properties paying themselves off and bringing in revenue year after year, turn to short-term rental investment analytics.
Airbnb Restrictions: What Cities Have Strict Airbnb Regulations?
Renting out your property short-term to travelers is a great opportunity to earn extra cash. But it’s vital to ensure that you are fully compliant with any laws for your area at the city and state levels. This article will help you get started.
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