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5 places to consider for your next vacation rental investment

The tourism industry took off not too long ago, and was named one of the fastest growing economic sectors worldwide by the World Tourism Organization. As a result, both vacation-goers and vacation rental investments are creeping up on cities across the globe, providing travelers, renters, and property managers with constantly emerging opportunities.

While investors are paying attention to where the travelers go, property managers should be paying attention to both the travelers and the investors in order to stay ahead of the game.  

First things first: where are the travelers flocking to?

In a world with infinite landscapes and cultures, there are just as many types of travelers. Headlines these days love to generalize the “best” of this and the “best” of that, even though travelers don’t all want the same thing. That’s why we’re listing five of the most recommended destinations to travel to this year, designed to fit different interests. Take a look:

5. Stockholm, Sweden

Stockholm is often considered the jewel of Scandinavia, with colorful and well-preserved architecture that make it feel like a portal to the past. Listed by Condé Naste Traveler as #1 for its incomparable hospitality, tourism rates here are quickly growing.

Stockholm, Sweden

4. Oaxaca, Mexico

Western Living notes Oaxaca for its maintained old-world charm, a feminist-highlighted traditional economy, and a trademark cuisine including mezcal and mole sauce – which will help it place on hot travel lists in the present and undoubtedly into the future. It also received a shout-out from Vogue this year for its authentic bohemian artist community, as well as from National Geographic for providing some of the best adventuring out there.

Oaxaca, Mexico

3. Sri Lanka

Long visited by spiritual travelers, Sri Lanka’s diverse landscape and easy access around the island have recently made it popular for explorers as well, with over 2.5 million visitors in 2017. Thanks to its tropical climate, you can visit at any time of the year!

Sri Lanka

2. Bangkok, Thailand

Bangkok is infamously welcoming, full of adventure, and totally affordable. On top of this, CNN Traveler just called it the world’s GREATEST city for setting trends, the best food, and having incredibly convenient local transit. It’s probably already on your to-go list, but if not you should pick up your pen and put it there now.

Oaxaca, Mexico

1. Algarve region, Portugal

Once a well-kept secret, the Algarve region has pretty much everything to offer: a gorgeous landscape, unique local history, low prices, and renowned hospitality. Forbes gave it the gold medal on their 2018 list of inexpensive must-sees.

Algarve region, Portugal

But are these the best cities for investment properties?

Beginner’s entrepreneurship is on the rise, and vacation rental investment is a promising road to walk down. But if you’re looking to profit, the best places to buy investment properties are not simply the most popular destinations to travel. There are some other factors to keep in mind, such as the housing market, the length of your ROI (return on investment) plan, and short-term rental regulations respective to each area.

It’s estimated that after three years, the ROI for a purchased property will exceed the ROI for rented and subleased property, making it advantageous for long-term profit plans. According to AirDNA, Airbnb and short-term rentals make up to 3x more than traditional long-term rentals – but vacation rental investment hasn’t yet become financially conventional.

The challenges holding people back are easy enough to see, but with the data available today, they’re also easy enough to overcome. The research has been done to demonstrate where properties have the highest ROI value, and where tourism rates have been consistently escalating. With this information, we’re able to identify which destinations qualify for both, and want to share these findings with all of the potential investors out there. Check out five of the best places for investment properties:

5. Napa Valley, California

While Napa may be a steep investment, its epic scenery, unparalleled wine economy, and consistent flow of tourists make it a smart and reliable investment.

Napa Valley ,California

4. Sri Lanka

Sri Lanka has seen a 300% increase in tourist traffic in the last six years, and was ranked by the World Travel and Tourism Council at 16th out of 184 countries for long-term growth in the travel and tourism sector. This market should be tapped in 2018 while experts expect it to keep soaring – and in time to benefit from new laws passed just last year, which were cited by the Financial Times as easing the foreign property investment process.

3. Bangkok, Thailand

Bangkok has brought record numbers of travelers to date and can be counted on to bring many more in the years to come. It was listed by Mastercard’s Global Destination Cities Index as the most traveled to destination of 2017. With condos gaining tourism traffic and foreigners legally allowed ownership (restricted to under 49% of the total property according to Live And Invest Overseas), we recommend pursuing them first.

Bangkok, Thailand

2. Oaxaca, Mexico

Oaxaca has only recently gained attention as a traveler’s dream, and with its particularly easy access for North, Central, and South Americans alike, it has major untapped potential for the travel market. Mexico also offers beneficial financing options for non-residents, which U.S. lending institutions have established themselves there to assist with.

Oaxaca, Mexico

1. Algarve, Portugal

Not only is the Algarve region full of appeal for all types of travelers – it’s also full of inexpensive property. As a bonus, Portugal makes it possible for non-residents to get a mortgage and offers a Golden Residency Permit Program for the benefit of property investments. It was listed by Lonely Planet as the 3rd best country to visit in 2018.

What can property managers learn from vacation rental investments and traveler trends?

As a property manager, extensive negotiations go into organizing commissions and preparing a property for guests, but procuring the bookings is essentially within a manager’s control. The key is to pay attention to the trends mentioned above: where the travelers are traveling, where the investors are investing, and where these statistics overlap. 

While managing properties with ideal geographical and economic placement will always help to get bookings, using a good property management software is the ticket to maximizing profits in any location.

A good management system saves countless hours by integrating multiple channels while automating prices and communication. This makes it possible to spend the additional time building the guest experience: additional amenities, cleaning services, 24/7 customer support, and more.

Many trials and tribulations in the vacation rental industry have made a comprehensive system like this possible, and with some of the most innovative technologies on the market, Guesty is the ultimate property management software. Check us out to book a demo and take your vacation rental business to the next level!

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