7 Best Rental Markets for Vacation Homes on the West Coast
Many believe that the West Coast is the best coast, but not all of its cities are created equal when it comes to rental properties. If you’re looking to invest in “The Golden State” (or its neighbors), you need to be strategic about where you buy.
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GOBankingRataes spoke with experts to bring you the top markets for vacation homes in this region.
Here are the 7 best rental markets for vacation homes on the west coast.
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San Diego: Sun, Surf and Steady Income
San Diego tops the list for many reasons. John Stevenson, a retirement and investment expert at annuity.org, explains why. “San Diego boasts year-round warm weather, beautiful beaches, and numerous attractions like the San Diego Zoo, SeaWorld, and Balboa Park (one of my personal favorites). The city attracts a steady flow of tourists, making it an excellent market for vacation rentals.”
When it comes to rental potential, Stevenson said, “High occupancy rates due to consistent demand and a strong short-term rental market, especially in coastal neighborhoods like La Jolla, Pacific Beach, and Mission Beach, [are a huge benefit]. Little Italy is also a personal favorite of mine and garners big rents for the location.”
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Santa Barbara, California: Luxury Living and High Returns
If you’re looking to get into the luxury market, Santa Barbara is an excellent choice. Stevenson described it as “known for its Mediterranean climate, stunning coastal views, and vineyards.” It’s also close to Los Angeles, which makes it an excellent option for weekend getaways for wealthy Angelenos.
The rental potential here is significant. “[It has] high rental rates, particularly for luxury properties. The market is competitive, but the return on investment can be significant,” Stevenson added.
Lake Tahoe, California/Nevada: Year-Round Appeal
Lake Tahoe offers a unique opportunity for investors, with its appeal spanning all seasons. Boating in the summer and skiing in the winter — what more could you ask for?
Stevenson, who lives in the area, shares his insider perspective: “Lake Tahoe is a year-round destination, popular for both winter sports and summer activities like hiking and boating. The scenic beauty and outdoor recreation options make it a top choice for vacationers.”
G. Brian Davis, co-founder at SparkRental, echoes this sentiment but adds a word of caution. “The areas surrounding Lake Tahoe offer excellent winter sports, summer and fall hiking, and swimming and boating. Just watch out for the high price tags and only buy after triple checking the occupancy and cash flow forecasts for the entire year.”
Big Bear Lake, California: Mountain Retreat Close to the City
Big Bear Lake is another year-round destination that’s caught the attention of investors. Stevenson explained its appeal by saying, “Big Bear Lake is a popular destination for outdoor enthusiasts, offering skiing, hiking and lake activities. It’s within driving distance of major cities like Los Angeles, making it a convenient weekend retreat.”
The rental potential is particularly strong during peak seasons. “High occupancy rates during winter and summer seasons. The market is particularly favorable for cabins and mountain homes,” Stevenson shared.
Cannon Beach, Oregon: Coastal Charm in the Pacific Northwest
For those looking to invest in the Pacific Northwest, Cannon Beach offers a unique (and gorgeous) opportunity. Stevenson described its charm like this, “Cannon Beach is known for its iconic Haystack Rock, beautiful coastline, and charming small-town atmosphere. It’s a favorite spot for tourists looking for a peaceful beach getaway in the Pacific Northwest.”
The rental potential is strong, especially during warmer months. “Strong demand during the summer months and steady interest year-round. Vacation homes here are often sought after for their scenic views and proximity to the beach,” Stevenson added.
Wine Regions: A Toast to Year-Round Tourism
Wine enthusiasts and investors alike should absolutely consider the vacation-friendly wine regions along the West Coast.
“Wine regions tend to see consistent traffic year-round, with an extra bump at harvest,” said Davis. “Check out the Central Coast and Paso Robles wine regions in California, Walla Walla and Columbia Valley in Washington, and Willamette Valley in Oregon.”
Anaheim, California: The Magic of Disney-Driven Demand
If you’re looking for a market with virtually guaranteed demand, consider Anaheim. Seamus Nally, CEO of TurboTenant, explained, “Anaheim is where Disneyland is located, which means that tourism is incredibly high there, year-round.”
He also said that if you have a vacation rental in this area, you should be able to guarantee “back-to-back guests” even if you’re charging a high price.
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This article originally appeared on GOBankingRates.com: 7 Best Rental Markets for Vacation Homes on the West Coast