How to Buy a Vacation Rental in Western North Carolina Mountains

Vacation rentals have become a popular investment asset class in recent years. They offer owners flexibility and high returns in areas that were historically not looked at for investments.

But what exactly qualifies as a vacation rental?

A vacation rental is a privately owned home, most single-family residences, which are being rented out on a short-term basis. Vacation rentals on the market are being seen as in properties ranging from high-end luxury homes to creative experiences such glamping and yurts, replacing traditional hotel stays.

Consumers can find vacation rentals on websites such as Vrbo, AirBNB, and even Booking.com. These sites make it easy for private investors and property managers to market and rent properties.

Why have vacation rentals become so popular?

While some travelers do prefer hotels, many are now looking to stretch their experiences beyond traditional accommodation. Vacation rentals usually offer more competitive rates, especially for larger groups and families, along with the ability to cook and socialize in common spaces.

With the rise of AirBnb and VBRO, consumers are now starting to trust their vacation rental experience and even prefer them over hotels. Reviews from previous guests provide the social proof that a space is as featured and help travelers make their booking decisions.

What makes a good vacation rental?

Great vacation rentals typically are a combination of location, property, and excellent management. Guests are looking for a space that can become their temporary home away from home while they enjoy their trip.

The best vacation rentals are located in areas that offer plenty of activities for guests. Previously, most investors were focused their interest on major cities, often purchasing condos close to the center of the city. After COVID-19 upended the travel space earlier this year, the best places to invest are looking a bit different with some profound new characteristics.

Guests are looking for unique spaces that are both comfortable but also remind them that they are no longer home. This means interesting interior design, layout, or exteriors. A great vacation home isn’t just a place to lay your head at night, it’s an accommodation option that offers guests an exciting experience.

How do you select a profitable vacation rental?

Interestingly, some of the most successful vacation home rentals have comparatively modest values because of their more rural locations. Unlike long-term rental properties, this is not a simple matter of return on investment.

With the current economic climate as well as record-low interest rates, vacation rentals have become an accessible option for aspiring investors. When considering where to purchase a short-term rental, there are several property and location characteristics that are important to consider. Some of this information can be gathered independently while some you may have to discuss with a local property management company. We highly recommend reaching out to the team at Bright Host for more information on rental rates and competition.

You can also join our Facebook Group “Savvy STR Investors” which focuses on Short Term Vacation Rental properties in Western North Carolina.

Here are the basic elements to consider when buying a short term rental as an investment:

• Rental Demand: How often are vacation rentals in this area booked? Are there other accommodation options such as hotels that are readily available in the nearby vicinity? It’s important to consider your potential competition.
• Revenue Growth: Will your property have the capacity to earn more this coming year than it did the previous year? This is assessed by using a year-on-year metric.
• Investability: This metric is calculated by comparing purchase prices with the average income of a short-term rental.
• Legal Requirements: Not all cities allow short-term rentals. Check with local regulations before making a purchase.
• Growth Potential of Area: This is a qualitative assessment of the area that takes into consideration planned projects and changes expected in the area you’re considering purchasing.

Areas that have recently become popular and highly profitable are categorized as regional drive-to markets; areas where guests can drive from their city or suburban homes to more rural areas with activities and a small-town atmosphere, like Asheville.

Asheville Area

The stunning Blue Ridge Mountains, part of the Appalachian Mountains, cover most of western North Carolina. The landscape is known for its blue haze and for being some of the most beautiful wilderness in the United States.

Asheville is a major city in the Blue Ridge Mountains, famous for its charming town center and for being packed full of culture and activities. It has a downtown Art District with galleries and museums as well as plenty of shopping. The Biltmore Estate, known as America’s Largest Home, is a spectacle with events and activities for everyone. It’s become a popular tourist destination for those visiting the area.

Asheville presents an attractive opportunity for investors considering short-term rentals. While privately own vacation homes are not permitted within the city limits, just outside the city boundary there are plenty of options for investors with a wide range of budgets.

Short term rental properties that are performing best are unique properties such as cabins or lake houses or those near attractive locations. The Blue Ridge Mountains and Asheville area has both available. Asheville is the perfect ‘home base’ for those exploring the Blue Ridge Mountains at any time of year. Visitors come to hike, bike, fish, tube and just to enjoy the mountain peace.

Some of the smaller micro-markets around the Asheville area have seen 30%+ increase in daily rates and occupancy rates. These markets include areas like Maggie Valley, Lake Lure, Mars Hill, Black Mountain, and more.

Asheville real estate market appreciating

The real estate market in Asheville has been strong in recent years. We are seeing homes sell fast and values continue to appreciate quickly.  Previously, listing volumes were low but now as listing numbers are finally increasing, demand is still keeping up with competition remaining strong. It’s important that investors consider their options, but also act decisively on desirable properties.

Buying a vacation rental property in Asheville doesn’t just mean you’re setting yourself up for a higher-than-average investment income, but owners can anticipate that their property will appreciate over time for a longer-term return.

How to find a vacation rental investment in the Blue Ridge Mountains

When you start looking for you’re an investment property, it is essential to not only engage a professional realtor like Tyler Coon who knows the area but one that has experience in vacation rentals.

These agents will know what areas draw out-of-area visitors and which unique properties will have reliably strong rental demand.

The team at Savvy Realty go through new listings on MLS every day to select the properties that could be ideal vacation rentals. If you’re ready to get on the path to financial freedom with an investment property, our carefully curated list of properties will provide you with excellent purchase options, so you don’t miss out. That list can be found Here.

Get in touch with a member of our team for more information on great vacation rental investments and property management options.