These Are the 15 Worst Places to Buy a Vacation Rental Home
Thinking about buying a home in your favorite vacation destination? For some buyers, this can be a smart investment move as a study by Rented shows some places provide a pretty sweet return on your investment.
However, buyer beware. Some of the hottest vacation spots actually provide the lowest returns. Researchers believe tough regulations, high prices, and killer property taxes may hamper a vacation homeowner’s ability to get a decent return on rental income.
Rented compared real estate price, local rental rates, insurance, taxes, maintenance costs, and overall destination popularity to assign an ROI score from 0 to 100 for each location. Which destinations performed the worst? You’ll be scratching your head about No. 1.
15. Honolulu, Hawaii
- ROI score: 18.6
The average short-term rental income on a home in Honolulu is about $39,047, according to Rented. The median home value in Honolulu is about $662,636, according to Zillow with home values rising 2.9% year over year.
Next: Former Vice President Joe Biden spends a lot of time here.
14. Nantucket, Massachusetts
- ROI score: 17.9
Although the estimated short-term rental income is about $111,691, Zillow reports the median home value on the charming island is a staggering $1,520,692. Values have risen 5.6% since last year making this an expensive purchase.
Next: You might catch mega-producer James Cameron hanging out here.
13. Crested Butte, Colorado
- ROI score: 17.2
One reason gorgeous Crested Butte makes the list is because home values have skyrocketed by 27.6% since last year, according to Zillow. Median home value is about $682,578 and you can get an estimated average of $53,225 in short-term rental income.
Next: President Gerald Ford had a home in this popular ski destination.
12. Beaver Creek, Colorado
- ROI score: 15.9
The median home value in Beaver Creek is about $725,000, according to Berkshire Hathaway Home Services. Estimated short-term rental income is approximately $95,016, which makes owning a vacation rental home in this highly desirable ski destination pretty pricey.
Next: You might run into one of the Baldwin brothers here.
11. Long Island, New York
- ROI score: 14.8
Long Island is a large span of land, which also includes the exclusive Hamptons area. Generally, median home values on Long Island are about $383,869, according to Zillow. And you can expect to see short-term rental income around $13,226.
But, go to the tip of the island and hit the Hamptons, Montauk area and you are looking at median home values up to $1,293,800.
Next: This is Sen. Elizabeth Warren’s hometown.
10. Oklahoma City, Oklahoma
- ROI score: 14.8
Homes in Oklahoma City are relatively affordable as the median home value is $126,566, according to Zillow. Although values increased 4.2% since last year, values are still lower than the national average of $213,146. Short-term rental income is an estimated $22,693.
Next: Plenty of professional golfers make this area their home.
9. Ponte Vedra, Florida
- ROI score: 14.2
Located outside of Jacksonville, Zillow reports that the Ponte Vedra market is ice cold, making it a buyer’s market. Median home values are $498,659, up about 8% since last year. Now might be the time to house hunt as Zillow anticipates market values will rise another 4.3% within the next year. Estimated short-term rental income is about $14,223.
Next: The Big Apple offers a variety of options.
8. New York, New York
- ROI score: 12.8
Prices vary depending upon whether you are purchasing a vacation home in Manhattan, a nearby borough, or elsewhere in the state. General median home values in New York are $299,093 and prices rose 13.8% since last year, Zillow reports.
However, digging deeper, the median home value in the metro area, including the city is $431,570 with prices rising 10% since last year, according to Zillow. While the general New York market appears to be healthy, Zillow reports the metro area is cold, which could be a boon for buyers. Short-term rental income, specifically in the metro area is about $68,505.
Next: Indie director John Waters loves to use this city as a backdrop to his films.
7. Baltimore, Maryland
- ROI score: 12.5
This market is cold, according to Zillow with median home values at $108,844. Although values rose by 24.2% and are expected to rise again next year by 11.4%, it is going to be tough to generate decent short-term rental value. Rented estimates rental income to be about $7,916.
Next: Tom Cruise loves to relax here.
6. Telluride, Colorado
- ROI score: 12.1
Home values are pretty high in Telluride as the median home value is about $784,830 according to Zillow. Values rose 12.9% since last year and homeowners can possibly earn an estimated $75,464 in short-term rental income.
Next: Justin Bieber has a vacation estate in this gorgeous destination.
5. Park City, Utah
- ROI score: 11.9
Median home values actually declined slightly in Park City, although values stand at about $679,189, according to Zillow. Estimated short-term rental income is about $28,909.
Next: Rocker Bob Seeger owns a condo in this sleepy Florida town.
4. Naples, Florida
- ROI score: 11.6
Homes are pretty pricey in the Naples vacation area, with Zillow reporting the median home value being $808,091. This value represents homes located in the typical vacation area, however the Naples market has a general median home value of $290,737. Estimated short-term rental income, most likely from the vacation home market is about $31,562.
Next: Celebrities like Larry David, President Barack Obama, and Meg Ryan spend summers here.
3. Martha’s Vineyard, Massachusetts
- ROI score: 10.2
Median home values on Martha’s Vineyard can vary from $781,885 in the Vineyard Haven metro area to $871,701 in Edgartown. However, other areas on the island, like Chilmark, command an even higher median value of $1,575,603. On average, the estimated short-term rental income is about $34,175, however certain areas on the Vineyard may produce a higher rental return.
Next: Maybe Mark Zuckerberg could be your neighbor.
2. Palo Alto, California
- ROI score: 10
Median home value alone may scare most buyers from the market as Zillow estimates values to be $3,336,418. Values rose 18.6% from last year and are anticipated to increase 9.2% next year. Although short-term rental income is estimated to be about $75,826, it may not be enough if you are paying $3 million for your crib.
Next: Who’s who of stars converge here every winter.
1. Aspen, Colorado
- ROI score: 9.9
The very worst place for a vacation return on investment is Aspen. While you can get top short-term rental dollar at $93,122, Zillow’s median home value in this area is $1,359,558.
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