5 Affordable Vacation Rental Markets Worth Investing In 2023
Have you decided to purchase a vacation property? And is there such thing as an affordable option? Well, for the purposes of this piece, we will define an affordable vacation property as a purchase of $500,000 or less. First and foremost, you have to love whatever it is you're buying and its location. This is not just an additional expense but a significant amount of responsibility that needs to be worthwhile. U.S. News reports that weighing the pluses and minuses is the most important thing to do when considering a vacation property purchase.
Whether it offers a desirable climate, access to premium experiences, or is beautifully designed, a great vacation rental comes in many shapes and sizes. Ideally, the property is also relatively accessible from your primary residence or is professionally managed when you are not using it. Your vacation rental property may or may not be able to work as an Airbnb property, as well. We get it — there is a lot that goes into this! So today, we are going to break down five of the best affordable vacation rental markets for you to consider. Let's dive in!
Orlando, Florida
Orlando will make you believe in magic, and that is not even accounting for Disney World. Despite being the first U.S. city to surpass 70 million annual tourists, its home prices will surprise you with their relative affordability (as noted by Travel Agent Central). There is a strong but actively moving inventory of single-family homes in Orlando, Florida, and its surrounding areas, going for under $500,000 (as seen on Zillow). Only an hour from the beach, Orlando Airports points out that the city also features direct flights to London, Amsterdam, Bogotá, and Dubai with incredible international accessibility.
This is exceptional, as cities with this kind of commercial infrastructure tend to be at a higher price point. For one, a vacation investment in this city offers its owners tremendous access to year-round warm weather. Orlando, of course, offers incredible family-friendly entertainment such as Universal Studios, Legoland, Sea World, and so much more. Even when your family has outgrown some of these offerings, there is a lot fine dining and nightlife to enjoy as well. Not to mention, Norada says that homes in this city have appreciated nearly 180% in the last decade. An Orlando vacation investment forecasts strong appreciation and ample Airbnb opportunity.
Palm Springs, California
A quiet city in the California desert might not seem like the most obvious place to buy a vacation property, but Palm Springs packs a major punch. With impressive golf and tennis offerings, Palm Springs is a retirement mecca for snowbirds looking to escape the cold weather and soak up that California sunshine. In fact, Pacaso claims that Palm Springs experiences 350 days of sunshine a year, with low humidity and consistently perfect weather being a significant draw.
Beyond that, Palm Springs' proximity to Los Angeles pays off, as it hosts the annual Palm Springs Film Festival every January with thousands of attendees. But the biggest attraction is 30 minutes down the road in Coachella Valley. Yes, the Coachella Music Festival is a gargantuan affair, with over 120,000 people showing up for two weekends in a row every year (as reported by Desert Sun). During this time of year, Airbnbs can quadruple in price, with some properties making close to $20,000 in a single weekend. If you are looking for a fun and relaxing vacation destination with great weather and a cool pool party culture, Palm Springs has a lot to offer. This vacation investment skews toward slightly older families and retirees but is very affordable by California standards and has fantastic short-term rental opportunities.
Salt Lake City, Utah
Salt Lake City boasts museums, a lively city center, gorgeous nature, and proximity to some of the best skiing in the world. Yes, this city is a fantastic investment opportunity for a vacation home, as its dynamic seasonal offerings make it quite an attractive option. The downtown is walkable and conducive for all kinds of nightlife and dining, with a down-to-earth sensibility. While the surrounding ski resorts of Deer Valley and Park City showcase luxury and high real estate prices, Salt Lake City is surprisingly affordable.
Zillow shows that three-bedroom, two-bathroom homes in the city go for $500,000 and, in many cases, well below. But Salt Lake City is also an opportunity whose window may not be around forever. Norada reports that the city is currently experiencing explosive growth, with people moving there every day due to the booming economy. Home prices have increased by almost 11% in the last year alone, and they have a relatively low inventory. Even with rising interest rates, homes are selling quickly.
Nashville, Tennessee
Often referred to as Music City, Nashville is the perfect place to throw a bachelor or bachelorette party weekend. It is also just a great vacation destination if you enjoy live music and a stiff drink. The Plunge points out that the concentrated array of bars, whiskey tastings, museums, and strip clubs will have you entertained with little to no effort. Nashville is also surprisingly affordable in the housing sector, with three and four-bedroom homes regularly found for under $500,000. Furthermore, it is one of few markets that has not decreased in median listing price despite the increase in interest rates (as shown by Realtor).
Like Salt Lake City, Nashville's market performance suggests a fleeting opportunity before prices surpass this metric. For a densely populated city with great night and walkability, Nashville possesses a lot of the ideal qualities and market health to justify a strong investment. Norada claims that Nashville falls in the top 10% of the U.S. for long-term property value increases.
New Orleans, Louisiana
New Orleans represents some of the most unique facets of American culture and is a phenomenally affordable real estate vacation investment. Embrace Someplace asserts that the welcoming residents, dynamic Creole cuisine, and fantastic live jazz performances showcase a cosmopolitan and unique city with affordable living. Unlike other options on this list, New Orleans is a distinct city whose character and intrigue stem from its deep historical lineage. With the first Mardi Gras celebration reportedly held in the winter of 1857 and St. Louis Cathedral opening in 1727, this city features architecture, culture, and traditions older than the country itself (according to Dest Guides).
Zillow shows that there are new construction, three-bedroom, two-bathroom homes listed for as cheap as $350,000. This is an incredibly reasonable price point for a city that has such unique character, warm weather, and proximity to water. If your vacation involves history, a temperate climate, and a little bit of dark magic, New Orleans offers a unique slice of America.