Choose right and your second home can provide double the pleasure – memorable vacations and substantial profits.
Buying a second home can mean never having to worry about lodging on your vacation again. It can also turn into a source of income when you rent it out to travelers – or profit down the line, if you want to sell it.
However, cabins in the woods, oceanfront cottages and mountain hideaways all come with the same kinds of costs as your primary residence, but without the tax deductions. One plus: The Internal Revenue Service says if you rent a vacation home for less than 15 days out of the year, you don't need to report the income.
Before taking the plunge to buy a vacation home, find out how your taxes will be affected, decide whether you'll engage a property management company to oversee the rental and what kind of maintenance costs the property is likely to sustain.
Read on to see which parts of the U.S. might be the most lucrative for your vacation home. Median home values come from Zillow.com.
Market trends: Zillow reports home values have gone up 10.2 percent over the past year, and forecasts an 8.8 percent rise within the next year.
Attractions: Near Orlando (17 miles south) and Walt Disney World, SeaWorld and Universal Orlando, without being in that crowd-crushing town. Kissimmee has a lion's share of its own attractions like hot air balloon tours, Old Town theme park, a skeleton museum, the Holy Land Experience, shopping and spas.
The details: Lots of sunshine all year long is always appealing to travelers. Zillow says that real estate investment properties have increased in value by 13.6 percent over the last year and are still on the rise. Another upside to this locale is central Florida's affordable cost of living.
Market trends: Zillow reports home values have gone up 4.3 percent over the past year, and forecasts a 6.4 percent rise within the next year.
Attractions: Casinos, the Tulsa Zoo, Oklahoma Aquarium, 14 public golf courses, vineyards, craft breweries and tours of the tunnels in T-Town all attract visitors.
The details: Centrally located in the middle of the country, Tulsa is an affordable real estate market not many know about. Currently, it's more of a seller's market though, because the area doesn't have enough inventory to serve the needs of the number of buyers shopping.
Market trends: Zillow reports home values have gone up 3.5 percent over the past year, and forecasts an 11.5 percent rise within the next year.
Attractions: For a town with a population of a little over 4,000, it's burgeoning with things to do, including more pancake houses than you'll ever see in one place. The gateway to the Great Smoky Mountains hosts the Amazing Mirror Maze, Anakeesta theme park (ziplines, gem mining, Chondola ride and more), Guinness World Records Adventure, the Salt and Pepper Shaker Museum, and live theatre.
The details: The Smoky Mountains draw 11 million visitors per year. Gatlinburg and its two neighbors, Pigeon Forge and Sevierville, all have strong tourism and are considered year-round vacation destinations. Gatlinburg has a large inventory of vacation homes, high occupancy rates and fairly low real estate costs.
Market trends: Zillow reports home values have gone up 10.2 percent over the past year, and forecasts a 2.7 percent rise within the next year.
Attractions: Sometimes all you need for a good vacation is 60 miles of ocean beach, but Myrtle Beach also offers the Family Kingdom Amusement Park, The Big M Casino (a gaming yacht), Splashes Oceanfront Water Park, Brookgreen Gardens, mini golf, helicopter rides and minor league baseball.
The details: Highly affordable prices, even with oceanfront properties, make Myrtle Beach a good choice for a second home. There's a big demand for rentals in the peak summer season, but with an ocean view, modern décor and good marketing you can also reach the shoulder season traveler.
Market trends: Zillow reports home values have gone up 7.7 percent over the past year, and forecasts a 7.3 percent rise within the next year.
Attractions: Who doesn't love southern charm and hospitality? Get a large dose here along with parks, art museums, live music, interactive history at Old Fort Jackson, beachcombing on Tybee Island, breweries, and lots of fried chicken, biscuits, and shrimp and grits.
The details: Savannah real estate is affordable with a high demand in the historical district because of that area's walkability. Keep an eye out for your ideal property because the inventory is low and so are the days a property stays on the market.
Market trends: Zillow reports home values have gone up 6.1 percent over the past year, and Zillow forecasts a 4.9 percent rise within the next year.
Attractions: Besides an almost three-mile long boardwalk, Ocean City has sightseeing boat tours, beach fireworks, jet skis, canoes, boutiques, antiques, Assateague's wild ponies and crab cakes.
The details: You'll have a wide variety of price ranges to choose from in available properties including those oceanside and bayside. But beware of a house located in a flood area. Type the address into FEMA's search portal to get flooding details. For oceanfront homes, search for corrosion damage from the salt water.
Market trends: Zillow reports home values have gone up 10.3 percent over the past year, and forecasts a 4.1 percent rise within the next year.
Attractions: Even though temperatures occasionally soar into triple digits in the summer, the winters are mild. Travelers flock to Casa Grande Ruins National Monument, Colossal Caves, Flandrau Planetarium, Kitt Peak National Observatory, San Xavier Mission, Patagonia Lake and six public golf courses.
The details: Vacationers and retirees like the constant sunshine and the beauty of the Sonoran Desert. The bad news is Green Valley is currently a seller's market. A reasonably priced home sells in a few days, but the housing market is now year-round and no longer seasonal.
Market trends: Zillow reports home values have gone up 20.1 percent over the past year, and forecasts a 1.7 percent rise within the next year.
Attractions: This island city hosts a cruise ship terminal on the Gulf of Mexico. Other allures include Bishop's Palace, Moody Gardens, Schlitterbahn Waterpark (open year-round), an aquarium with penguins and sharks, fishing, boating and the Strand Historic District that salutes Victorian architecture.
The details: There's lots of demand for vacation properties, especially in Midtown Galveston. Tourists love to visit because there's something to do every month of the year (7 million of them visited in 2017). Realtors predict an increase in buyers as Galveston keeps adding amenities.
Market trends: Zillow reports home values have gone up 9.5 percent over the past year, and forecasts a 4.5 percent rise within the next year.
Attractions: Filmmakers use this spot a great deal, so the town has Hollywood Location Tours. Other charms include Airlie Gardens, Bellamy Mansion Museum and a riverwalk. On the coast side you can enjoy surfing and paddle boats.
The details: This historic beach town sees warm summers and mild winters, making it an ideal vacation spot. The market skews toward sellers now with a low inventory and high demand for the pricier properties.
Market trends: Zillow reports home values have gone up 13.1 percent over the past year, and forecasts a 2.6 percent rise within the next year.
Attractions: This Florida panhandle town comes with 320 days of sunshine, warm Gulf water, sugar-sand beaches, shopping, eco excursions, fresh seafood and trendy nightlife. Popular draws include Shipwreck Island Water Park, Gulf World Marine Park and a butterfly pavilion.
The Details: According to Realtor.com, the market here currently favors the buyer. Vacationers prefer two and three-bedroom rental properties. However, Hurricane Michael and its 155 mph winds made landfall here on October 10, 2018. Many residents lost their homes and are looking for new ones, while others suffered damage from the winds and falling trees. Realtors predict that the real estate market may stall for a few months or up to a year, but as soon as all the insurance claims are settled, the economy is set to rebound.
Market trends: Zillow reports home values have gone up 23.8 percent over the past year, and forecasts a 1.3 percent rise within the next year.
Attractions: Gulf Shores, along with sister town, Orange Beach, boasts 32 miles of white sand beach on the Gulf of Mexico. Tourists like the zoo, birding, Bon Secour National Wildlife Refuge, deep sea fishing, the Battle of Mobile Bay Civil War Trail, oyster farm tours and kayaking.
The details: Look forward to solid bookings during the summer or high season and seven-day minimum stays as the norm. Outside of the peak season, the destination has become popular with snowbirds. Attract those wintering over with a property that includes pool access and views of the Gulf.
Although Gulf Shores was originally in Hurricane Michael's pathway, this town managed to escape the storm's impact.
Market trends: Zillow reports home values have gone up 10.3 percent over the past year, and forecasts a 3.7 rise within the next year.
Attractions: The central Washington town of Chelan, situated alongside the 52-mile long lake bearing its name, welcomes visitors. Offerings include excursions on the Lady of the Lake boat to Stehekin, a 25-mile rolling trail system, many wineries, small watercraft activities, live music and stand-up comedy.
The details: Sunshine dominates the landscape in Chelan, and there's no shortage of activities, including a harvest festival and grape stomping in the fall and skiing and snowshoeing in the winter. Besides land-based homes, consider buying a houseboat that can move around the lake. Another suggestion: A planned community, The Lookout, gives every buyer a piece of waterfront.