Kissimmee in Florida is the best place to buy a holiday home for those looking for a good return on investment. That’s the headline finding from research carried out by Schofields Insurance, a holiday home insurance company which first launched in 1984.
A city just south of Orlando, Kissimmee was revealed to be the best location for those looking to invest in a property to rent out. Schofields analysed closely the most widely visited tourist destinations around the world over the past couple of years, and those which are forecast to remain popular. From this, they then compiled the costs of purchasing a property compared to the rental income it will provide.
To create the results, the research compared the cost to buy an average 90m² property in each destination with its yearly rental potential.
Kissimmee, often known as Florida’s theme park central, topped the list with a 26.02% return on investment (ROI). It is one of the most popular tourist destinations in the United States, with good weather all year-round leading to a steady stream of tourists. Investors, meanwhile, could see a potential return of more than £30,000 a year.
In second place was Barcelona, one of Europe’s city break hotspots thanks to its impressive architecture, warm weather, great food, thriving nightlife and combo of city and beach living. Affordable property prices and high holiday home rental yields make it an ideal choice for those looking to make money from their own holiday rental home.
On an average 90m² property priced at approximately £173,000, investors could earn nearly £38,000 after annual costs are deducted. The average ROI in the city was calculated to be 18.78%.
To calculate an average return on investment for each area, the research examined the cost to purchase in the following destinations around the world and the potential rent for an average holiday home’s annual season length. The full results are reproduced below:
- Kissimmee, USA – 26.02%
- Barcelona, Spain – 18.78%
- Cornwall, UK – 12.01%
- Nice, France – 11.96%
- Lake Garda, Italy – 8.71%
- Venetian Riviera, Italy – 7.28%
- Miami, USA – 6.82%
- Marbella, Spain – 6.32%
- Faro, Portugal – 5.61%
- Albufeira, Portugal – 4.50%
- Avignon, France – 3.35%
- Lake District, UK – 2.89%
- Split, Croatia – 2.17%
- Pula, Croatia – 1.27%
“It’s not surprising to see that Kissimmee tops the list of best return on investment property areas considering the climate and attractions,” Phil Schofield, head of inbound marketing at Schofields, said.
“It’s a hugely popular vacation destination for people around the world, even during the low season, meaning the demand for holiday homes is high, pushing rental prices higher. But property prices still remain low following the recession.”
He added: “While these areas may be the best statistically for return on investment for holiday homes, it’s always worth taking it with a pinch of salt – just because the stats say it’s a good investment, you also need to look at other factors to maximise your return including the precise location of the home and the potential to increase revenue.”