Vacation rentals can be a boon for consumers on multiple counts. For renters, they offer the chance to enjoy lodging equipped like home, with more space for the money than a hotel room and the chance to save on food by preparing your own meals. For owners, they provide a path to defray some of the costs of keeping a second home in a desirable destination.
But not all vacation properties are an equally good investment. Rented.com ranks the best — and worst — markets to buy a second home based on potential return on investment.
Using criteria such as housing prices, popularity of the rental market, cost of insurance and real estate taxes, and more, the site rates 150 U.S. markets for prospective purchasers.
Topping this year’s list is Panama City Beach, a popular beach town on Florida’s Panhandle. But a new trend is the rise of cities for second-home ownership, a development Rented.com attributes to the growing trend of blending business and pleasure trips. Chicago comes in at No. 2, and Memphis also hits the top five. The biggest surprise in the rankings is the appearance of Tulsa, not a place many investors or vacationers might expect, at No. 4. See the 20 best places, and five worst, here.