Though the inflation rate is high and the supply chain management is facing some issues, many real estate investors are interested to invest in vacation homes due to the post-pandemic travel boom. There are expecting to earn a potential profit from this vacation rental. At the end of the 2021 vacation, rental investments reached $56,000 which would exceed 1.2 million by the end of 2022. As a proactive real estate investor, you should consider purchasing a vacation home to earn some extra money.
Because the average cash-on-cash returns of vacation homes are nearly 10% per year in the short-term rental markets. As vacation homes are considered domestic leisure destinations, they offer the recession-resistant feature. As these are budget-friendly alternatives for domestic travel, historically these performed well during the recession.
The vacation home has a huge market. From metro areas to villages, you can find options in nearly every market in the U.S. Currently, 1.1 million vacation rentals are performing in the USA. According to the vacation rental listings, the number will be increased by 20.5% by the end of 2022.
Though the inflation rate is increasing, it is still safe to invest in vacation rentals. Because historically real estate appreciation rate grows faster than inflation. Even in the middle of a pandemic, the housing market performed better. A vacation rental is more flexible to use and manage. Because you don’t have to maintain long-term rental like other traditional rental properties. Most of the time the property is leased for 30 days or less. Furthermore, a vacation rental is also eligible for the same tax deductions which is an extra benefit for investors.