Top 10 USA Vacation Rental Investment Markets

A commonly asked question we get from our customers is “Can I invest my Self Directed IRA into a vacation property?”

The answer is simple: Yes you can. But you cannot vacation there. That would be a prohibited transaction within your IRA plan.

Investing in vacation real estate is a dream for most real estate investors, but unless you have upwards of an 80% occupancy rate and a fantastic property management company who promotes and manages it well the investment return could be a lot lower than regular income producing real estate with long term renters.


We have however compiled the list of The Top 10 USA Vacation Rental Investment Markets based on top tourism destinations in the USA each year, an average property price and the occupancy rates through out the year. Research and resources can be found within Appendix A.

Number 10: New York City, New York

Average Listing Price: $1.2 million
Estimated Visitors/Year: 48.8 million
Average Daily Room Rate: $238
Occupancy Rate: 81.5%

Attractions: Empire State Building, Statue of Liberty, Central Park, Museums.

New York is one of the most expensive real estate markets in the United States, however there is still an opportunity to pick up studio or one bedroom units for under $150,000 in good areas such as the Upper East Side.

With the amount of domestic and international tourism flooding into the city annually and turn key management or online booking engines, there is a potential to keep the property full for most of the year at the higher than average rates charged per room.

Number 9: Washington, DC

Average Listing Price: $350,000
Estimated Visitors/Year: 16 million
Average Daily Room Rate: $199
Occupancy Rate: 73%

Attractions: Smithsonian, National Monuments and Memorials, The Three Houses of Government.

Being the capital of the United States, Washington DC is seen as a historical mecca within the the USA. With foreign and domestic tourism growing, it is a vibrantly cultural city booming in the summer months.

Property prices are some of the highest in the country, yet smaller foreclosed units can still be found, fixed and rented out as vacation properties in popular tourist areas.

Number 8: San Francisco, California

Average Listing Price: $732,00
Estimated Visitors/Year: 15.9 million
Average Daily Room Rate: $160
Occupancy Rate: 75%

Attractions: Golden Gate Bridge, Alcatraz, Fisherman’s Wharf, Union Square, Museums.

With the large amount of conferences, business meetings, central business hubs and world famous tourist attractions, San Francisco has always been one of the top destinations for international travel. Property prices remain exceptionally high as a million people live and work on this small piece of land on the San Francisco Bay.

Average room prices and occupancy rates remain constantly high, but with the high cost of the investment the return may not be as good as other markets.

Number 7: Los Angeles, California

Average Listing Price: $468,00
Estimated Visitors/Year: 25 million
Average Daily Room Rate: $133
Occupancy Rate: 69%

Attractions: Hollywood, Universal Studios, Rodeo Drive, Venice Beach.

From Hollywood star spotting to shopping on Rodeo drive Los Angeles remains the romantic Twinkle Town vacation destination with 25 million visitors per year. As a sprawling metropolis and a busy bustling city, Los Angeles is spread out across a large area with little or no good public transportation system.

The best areas for an investment property would be Beverly Hills or Venice Beach which would allow good access to the more popular tourist attractions. Hotel accommodation can be found relatively cheap and occupancy rates are below national average, so providing accommodation with a difference may be the key.

Number 6: Anaheim, California

Average Listing Price: $274,000
Estimated Visitors/Year: 42.7 million
Average Daily Room Rate: $110
Occupancy Rate: 64%

Attractions: Disneyland.

Large numbers of family groups pass through Anaheim and the Orange County each year, mostly for a visit to Disneyland, which is one of the most visited Disney locations in the world.

Property prices in Anaheim remain pretty low, and it could be an opportunity to buy bigger units to accommodate large family groups.

Number 5: Dallas, Texas

Average Listing Price: $229,00
Estimated Visitors/Year: 27 million
Average Daily Room Rate: $130
Occupancy Rate: 68%

Attractions: Dallas Cowboys, Museums, Amusement Parks.

With Texas being one of the strongest economies in the nation, Dallas hosts large numbers of domestic travelers for conference and business meetings, as well as being the gateway for international tourists.

Property prices are really low, and room rates remain pretty high as the economy continues to grow.

Number 4: Las Vegas, Nevada

Average Listing Price: $295,000
Estimated Visitors/Year: 37.3 million
Average Daily Room Rate: $95
Occupancy Rate: 80%

Attractions: Gambling, Las Vegas Strip, Shows and Entertainment.

Las Vegas remains one of the hardest hit property markets in the country. It is estimated that properties would have lost a total of 66% in value by the end of 2012. Although hotel rooms and flight packages are cheap and easy to find, there is also a market for self catered family accommodation close to the strip.

With gambling and travel not slowing down during the recession, it is still one of the most popular domestic destinations within the US.

Number 3: Miami, Florida

Average Listing Price: $378,00
Estimated Visitors/Year: 12.6 million
Average Daily Room Rate: $144
Occupancy Rate: 80%

Attractions: Beaches, Museums, Miami Zoo, Party Night Life.

Miami South Beach, or SoBe as it is known by the locals, is one of the most famous beach destinations in the world for trendy and exclusive bars, clubs and restaurants. Spring break and summer months are jam packed with travelers, and finding accommodation can usually be a tiring affair.

Property prices have decreased dramatically during the recession and you can pick up a good investment in the South Beach area for under $100,000.

Number 2: Chicago, Illinois

Average Listing Price: $175,000
Estimated Visitors/Year: 31.9 million
Average Daily Room Rate: $113
Occupancy Rate: 61%

Attractions: Millennium Park, Buckingham Fountain, Sears Tower, Shedd Aquarium.

For business or vacation travelers there is a lot to do and see in the Windy City, attracting just under 32 million visitors per year. Property prices have taken a huge hit during the recession, and investments can be found in popular tourist areas for ridiculously low prices.

With a really good rail system, lots of outdoor activities in the summer and cold winter months, this makes it a great place for investing in a nice little vacation property for business or pleasure travelers.

Number 1: Orlando, Florida

Average Listing Price: $114,000
Estimated Visitors/Year: 50 million
Average Daily Room Rate: $92
Occupancy Rate: 63%

Attractions: Disney World, Sea World, Universal Resort Orlando.

Disney World put Orlando on the global travelers map, but Sea World and other amusement parks such as Universal Resort Orlando continue to pull over 50 million visitors to the area each year. Orlando however has been one of the hardest hit areas in the recession with properties losing over 50% in value over the last five years.

Tourism remains high, and there is strong competition with large hotel chains, but larger units offering self catering for families may perform well in this area.

If you are interested in Vacation Property Investing with your Self Directed IRA or 401(k), speak to an advisor at Safeguard Financial to take advantage of these markets and invest into Real Estate with your 401k. Call 877-229-9763, or fill out the form on our website www.ira123.com.

>>To download this article as a PDF click here.

Appendix:

Click here for Research Document

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