How to Choose the Best Location for Vacation Rental Property

Location is key when you’re searching for a vacation rental property investment. Where you choose to place your property can impact the success of your business. However, finding the best location is not an easy task as there are other factors to consider. In this guide, we will walk you through how to choose the best location for your vacation rental property.

Evaluate the Real Estate Market

If you are in the market looking to buy the best Airbnb investment locations, conducting a real estate market analysis is the first crucial step. This will help you find which area of the town yields the best short-term rental markets and the highest rental rates to avoid common pitfalls in property investment. Consider the following factors when studying the market for your next vacation property investment.

1. Local Laws and Regulations

Knowing the law is half the battle. Rules and regulations on short-term rental can vary widely by city and state. Most tourist destinations impose strict rules and regulations regarding short-term rentals. Take the time to learn all the local laws in the location of the property you are interested in purchasing. It is also a wise investment to partner with a real estate expert or consultant who knows the regulations and fine print.

2. Seasonality

Consider seasons when choosing locations for your short-term rental business and what they mean to you and your target guests. Is this area a winter wonderland or a summertime oasis? You need to know when it is peak season, how much you can expect to make, and if there are any off-season travel opportunities.

Travelling With A Baby

It is important to think about what your guests will be looking for out of their vacation trip and what they would want to see, do, and experience. You can also use the seasonality of your location to help market your property.

3. Economic Growth

In any business venture, you want your location in an area of thriving economic growth. Do some research in the area and find out if the local businesses and employment rates are growing. Get more facts and dig deeper by talking to local entrepreneurs and local government agencies. There are many positive signs of growth, so it is important to be on the lookout for these pointers:

Business expansions and job creation: When jobs are added to an area, it can attract people from other areas. Expanding companies and new businesses are often good housing indicators.

Population growth: More people moving into an area will increase the demand for housing. Census data can help you identify hot spots.

Infrastructure upgrades: When cities build or improve roads, schools, parks, and other public amenities, it often indicates a desire to attract new residents (and home buyers).

Rising property values: This can be a double-edged sword. While rising values mean more income for owners, they also make it more expensive to buy properties in the area.

Local Tourism industry: A strong and growing local tourism industry is a good sign that the demand for short-term vacation rental business is high and you will have a better chance of finding renters and making a profit.

Other Specific Factors

Now that we have narrowed down the broader factors to consider when choosing the best place to buy a vacation rental property, let’s identify the specific location elements that will help you position your business successfully.

1. Homeowners Association

Before you buy your dream vacation rental home, learn about the rules and regulations of the community Homeowners Association (HOA) governing the use of the property. Doing this homework can save you from unpleasant and costly surprises, like finding out that monthly rentals are not allowed. Some HOA rules and regulations can make or break a rental business.

2. Target Market

Targeting the right market is crucial to the success of your vacation rental business. You can’t be everything to everyone, so you need to find a niche that works best for you and your short-term rental home. Your target demographic is a significant factor in determining the best place to buy vacation rental property.

Ask yourself the right questions and get the right information:

Who are my potential guests? Narrow down your target market based on data by identifying their status, age range, place of residents, interests, and income levels.

Why do they want to travel here? Is it for outdoor recreation like hiking or skiing? Is it for a cultural experience like wine tasting or visiting museums or for culinary experiences like eating at restaurants or cooking classes? Is it for relaxation and sightseeing?

Under the right conditions, anyone can become a renter for your rental property. Defining your target market will help you choose the best location for vacation rental property.

3. Proximity to Local Attractions

Finding a vacation rental home close to the main attractions is one of the primary considerations when people travel. It puts their vacation experience into perspective when they have the chance to be close to something special.

Tips to Choose the Best Location for Vacation Rental Property

The proximity of your rental property to local attractions is one critical aspect of vacation rentals that can make or break a successful booking. Find out how close you are to the major attractions in your area using web mapping or distance calculator platforms.

For example, if you’re looking to attract families with young children, you’ll want to find a place close to local attractions and beaches. If it’s in an urban area with lots of entertainment options, people will come to see the sights. An apartment or condo near all the action would be ideal for this type of traveler. If it’s close to shopping, entertainment, and dining options, it will attract business travelers or tourists.


When it comes to real estate investing, getting the right information will help you make a wise decision. Talk to real estate experts, fellow rental property investors, and tourists to get valuable pieces of advice and information. Read tips and resources about short-term rental locations. The best chance you have is by having an educated and data-driven approach. Check out to learn more about the best location for vacation rental property.