6 Best Rental Markets for Vacation Homes in the South

The Southern United States is home to many dreamy vacation destinations. If you’re an investor looking to capitalize on the rental market, there are plenty of good ones you can focus on. GOBankingRates spoke with industry experts to find some of the top rental markets for vacation homes in the South.

Lavender Lloyd, property management training manager at Real Property Management, has some thoughts on where to buy — although she also believes everyone needs to do their own research.

“Evaluating cash flow markets for vacation rentals requires investors to conduct their due diligence on a property through proper research, analysis, and calculations,” she said. “Defining the best places for vacation rentals can vary, but for most aspiring investors, profitability is the key factor.”

Here are the best rental markets for vacation homes in the South.

Lloyd likes Destin because it’s a premier destination.

“Destin is known for its stunning white sand beaches and emerald green waters, making it a premier destination on the Gulf Coast for all ages.”

She also said that it has year-round appeal, “The area attracts tourists year-round, particularly for its fishing, boating and family-friendly attractions.”

For investors, this translates to strong potential returns because of the high demand for beachfront properties.

Nestled in the Blue Ridge Mountains, Asheville offers a unique blend of culture and nature. 

Lloyd described its appeal: “Asheville is famous for its vibrant arts scene, historic architecture, and outdoor activities like hiking and rafting. The city’s proximity to the Great Smoky Mountains and the Biltmore Estate makes it a popular destination for nature lovers and history enthusiasts alike, ensuring a steady stream of visitors looking for vacation rentals.”

Gatlinburg’s prime location as a gateway to one of America’s most popular national parks makes it a top pick for Lloyd. 

“Gatlinburg serves as a gateway to the Great Smoky Mountains National Park, one of the most visited national parks in the U.S.,” she said.

She also highlighted its diverse offerings: “The town offers a mix of outdoor adventures, family-friendly attractions and charming mountain views.”

For investors, this means year-round potential.

“Its popularity as a year-round destination makes Gatlinburg an excellent market for vacation homes, with strong demand for cabins and chalets,” Lloyd said.

The charm of the Old South is alive and well in Savannah.

Lloyd described its allure: “Savannah is famous for its historic squares, Spanish moss-draped oaks and vibrant arts scene. The city’s unique blend of history, culture and Southern hospitality draws tourists year-round.”

This consistent appeal translates to steady rental demand.

“Vacation homes in Savannah are popular with those looking to experience the charm and beauty of the Old South, ensuring consistent rental demand,” Lloyd said.

While these destinations offer strong potential, it’s crucial to look at market performance data. Beyond, a leader in revenue management for short-term rentals, provides occupancy data for several Southern markets:

• Houston: Occupancy increased from 32.30% to 35.30% year-over-year, a 3.00% improvement.
• Myrtle Beach: Showed improvement, increasing from 44.10% to 45.70%, a 1.60% gain.

This data shows how important thorough research is.

“By analyzing several critical elements, you can determine if the area will be profitable,” Lloyd said. “These critical elements include understanding the local market and rental demand, property types and locations, estimated operating expenses and financing costs, cash flow metrics and government regulations.”