My name is Gigi M. Knudtson, and for more than two decades I have worked closely with investors evaluating vacation and resort-adjacent real estate. In my experience, these properties behave very differently from typical residential investments. They can outperform traditional rentals during strong travel years—and underperform dramatically when tourism slows. Understanding this trade-off before you buy is essential.
In practice, this usually refers to homes or condominiums located within a short walking or driving distance of:
These markets are shaped by tourism demand, short-term rental platforms, local zoning rules, and homeowners’ associations (HOAs). All four factors directly affect profitability.
Nightly rates near major attractions are often two to four times higher than long-term residential rents. During peak seasons, I have seen owners cover several months of mortgage payments in just a few weeks of bookings.
Land near oceans, ski slopes, and national parks is finite. In mature resort towns, limited supply combined with global demand can support above-average appreciation over long holding periods.
Unlike most rental properties, resort real estate can double as a vacation home. This non-financial benefit matters to many buyers and can offset some perceived risk.
Tourism-driven income does not always track local employment trends. That difference can diversify an otherwise city-focused real estate portfolio.
Occupancy can drop sharply during off-seasons. Mortgage payments, insurance, and property taxes do not.
Short-term rental laws change frequently. I have often seen profitable properties become marginal investments after new permit caps or occupancy taxes were introduced.
Lenders may require higher down payments and charge higher interest rates for vacation or non-owner-occupied properties.
Travel demand falls during recessions, pandemics, or fuel-price spikes. Resort markets typically decline faster—and recover slower—than primary-residence markets.
Rules vary by state, county, and city. The table below highlights typical regulatory trends investors encounter. Local ordinances can be stricter.
A critical lesson I’ve learned is that resort properties should be evaluated like small hospitality businesses, not passive rentals. When owners forget that, losses tend to follow.By Gigi M. Knudtson, Founder
It can be profitable when managed carefully, but returns are more volatile than traditional rentals and depend heavily on tourism demand and local regulations.
Not always. Peak-season income can be high, but annual net profit may be similar or lower once expenses and vacancies are included.
No. Many cities restrict or ban them, and rules change frequently.
Management fees, insurance premiums, and furniture replacement costs.
Yes. Lenders often require higher down payments and charge higher interest rates.