Insider Tips for Finding Hidden Gems in the Vacation Home Market

22 May 2025

Thinking about investing in a vacation home but don’t want to settle for just any property? Finding a hidden gem in the vacation home market isn’t about luck—it’s about knowing where to look and what to look for. While everyone else competes for overpriced listings, you could be snagging an underrated treasure.

In this guide, I’ll walk you through insider strategies to help you find that perfect vacation home—one that offers great value, excellent rental potential, and a dream-worthy escape.

Why Hidden Gems Matter in the Vacation Home Market

Buying a vacation home is both an emotional and financial decision. You want a place where you can create lasting memories, but it should also be a smart investment. Hidden gems—properties that others overlook—often offer the best of both worlds: affordability and untapped potential.

So, how do you find these homes before they hit the mainstream market? Let’s get into it.

1. Look Beyond the Obvious Hotspots

When people think of vacation homes, spots like Miami, Aspen, or Lake Tahoe come to mind. But guess what? The best deals are often found just outside these high-demand areas.

Consider Up-and-Coming Destinations

Instead of focusing on overpriced tourist hubs, look for emerging destinations with growing tourism or infrastructure projects. For example, instead of buying in Malibu, check out nearby Ventura or Oxnard for oceanfront properties at a fraction of the price.

Search for "Second-Tier" Markets

Big-name destinations see premium pricing. Try looking at beautiful but lesser-known towns nearby. Think of it this way: instead of buying in Gatlinburg, Tennessee, consider nearby Sevierville, which offers similar Smoky Mountain views without the hefty price tag.

2. Timing Is Everything

Real estate markets go through cycles, and knowing when to buy can make a huge difference.

Shop Off-Season

Most people hunt for vacation homes in spring and summer, but sellers are more motivated during the off-season. Buying in fall or winter could get you a better deal, especially in seasonal destinations like beach or ski towns.

Watch for Market Downturns

Economic slowdowns can create opportunities. If tourism dips temporarily, some vacation homeowners might need to sell quickly, offering prices lower than their true value.

3. Get to Know the Locals

Sometimes, the best deals never hit the market. They’re passed along through word of mouth.

Talk to Local Business Owners

Chat with coffee shop owners, real estate agents, and Airbnb hosts in your target area. They often hear about off-market properties before they’re listed.

Join Community Groups

Many small towns have Facebook groups or online forums where people discuss local real estate. Join these groups and keep an eye out for posts from people looking to sell privately.

4. Work with a Local Real Estate Agent

There’s no replacement for a well-connected local agent. They have inside knowledge of properties that aren’t widely advertised and can guide you toward undervalued homes.

Why a Local Agent?

- They know which areas are experiencing growth.
- They can give you a heads-up on upcoming price fluctuations.
- They sometimes have exclusive access to "pocket listings" (homes for sale that aren’t publicly listed).

5. Consider "Fixer-Uppers" with Potential

Many buyers look for move-in-ready vacation homes, but properties that need minor updates can be goldmines.

Look for Cosmetic Fixer-Uppers

A home that looks outdated but has solid bones can be a great investment. Simple upgrades like new paint, fresh landscaping, and modern furnishings can transform a home at a relatively low cost.

Avoid Major Structural Issues

If a property needs a new roof, foundation repairs, or major plumbing work, the costs can add up fast. Unless you’re experienced with renovations, steer clear of homes that require major overhauls.

6. Analyze Short-Term Rental Potential

If you plan to rent out your vacation home, you need to make sure it’s in an area that allows short-term rentals (STRs) and has strong demand.

Check Local STR Regulations

Some areas have strict short-term rental rules, while others are more Airbnb-friendly. Be sure to review local laws before buying.

Use Rental Market Data

Websites like AirDNA and Mashvisor can give you valuable insight into occupancy rates, potential rental income, and average nightly rates in different vacation markets.

7. Think Outside the Box

Creativity can help you find properties others overlook.

Search for Unique Housing Types

Look beyond traditional homes—cabins, A-frame homes, tiny houses, and even houseboats can make fantastic vacation properties with strong rental appeal.

Look for Mispriced Listings

Sometimes, sellers list homes below market value by mistake. Use real estate platforms like Zillow or Redfin to track price reductions and spot potential deals.

8. Act Fast but Smart

When you find a promising vacation home, you need to move quickly—but not recklessly.

Be Pre-Approved for Financing

Sellers take serious offers more seriously. Getting pre-approved for a loan gives you an edge, especially in competitive markets.

Make a Competitive Offer Without Overpaying

If you’re up against multiple buyers, consider including an escalation clause (which automatically increases your bid by a set amount up to a certain limit). This way, you remain competitive without blindly overbidding.

9. Think Long-Term

The best vacation home isn’t just a great place to stay—it’s a strong investment that appreciates over time.

Look at Future Growth

Before buying, ask:
- Are there any upcoming infrastructure projects that could increase demand in this area?
- Have property values steadily increased over the years?
- Is tourism expected to grow?

Buy with Resale in Mind

Even if you plan to keep the home forever, life happens. Make sure the property has broad appeal in case you ever need to sell.

Final Thoughts

Finding a hidden gem in the vacation home market takes patience, research, and a willingness to think outside the box. But when you land the perfect spot—a home that offers both personal enjoyment and solid investment potential—it’s worth every bit of effort.

Use these insider tips, and you might just uncover a property that others overlook. Happy house hunting!