Where to Buy a Vacation Rental
An insider’s guide to the top vacation
Buying a vacation home can be one of the most financially rewarding and enjoyable investments you’ll ever make. Many of our vacation homeowners invest in multiple properties, building a portfolio of revenue-generating retreats in beautiful destinations around the world.
We designed this report to help active buyers make an informed decision. Our findings are unique because of our unparallelled data and because we focused our analysis exclusively on true vacation rental destinations in order to deliver the most accurate results.
If you’re seriously considering investing in a vacation rental property, read on. These are the top vacation rental markets that you should be currently looking at if you want to get the biggest return on your investment.
What we mean by ‘Insider’s Guide’
As the largest vacation rental manager in the U.S., Vacasa cares for more vacation homes than any other company. We host over a million guests per year. And we do it all through support of our local teams, who are active members in the destination communities where we operate.
For this guide, we combined local expertise with national performance data to provide you the best possible tool for buying a vacation rental home that will generate optimal revenue.
We started with home sales data in vacation markets throughout the country, and overlaid it with actual performance data for over half a million U.S. vacation rental properties. We then layered in insights from our local staff and real estate partners to curate a vacation rental investment guide that’s both informed by local experts and confirmed by comprehensive data.
What we did with that data:
First, we analyzed historical home sales in high-density vacation rental markets. Next, we factored the gross rental income less typical operating costs for vacation rental properties in each given region. Finally, we compared each region's net operating income with the cost of buying a home, giving us a picture of each vacation rental market's aggregate capitalization rate, or cap rate*, which we used to order our list.
Here are 25 top vacation rental markets that you should be considering if you want to get the biggest return on your investment.
Top 25 Markets for Buying a Vacation Rental
|1||Forgotten Coast, FL||$336,900||9.6%|
|2||Smoky Mountains, TN||$231,100||8.1%|
|4||Myrtle Beach, SC||$251,000||6.9%|
|5||Hilton Head Island, SC||$423,500||6.8%|
|6||Emerald Coast, FL||$397,400||6.5%|
|7||Ocean City, MD||$291,100||6.5%|
|9||North Kona, HI||$543,900||6.1%|
|10||Lake Chelan, WA||$388,600||6.0%|
|11||Gulf Shores, AL||$424,600||5.7%|
|12||Marco Island, FL||$395,300||5.6%|
|13||Key West, FL||$804,400||5.6%|
|14||Coachella Valley, CA||$383,100||5.6%|
|15||Pensacola Beach, FL||$390,900||5.6%|
|18||Fort Myers Beach, FL||$419,400||5.6%|
|19||Park City, UT||$557,700||5.5%|
|20||Gulf Coast, FL||$457,800||5.4%|
|22||Central Coast, OR||$312,400||5.2%|
|23||South Padre Island, TX||$264,100||5.1%|
|24||North Coast, OR||$371,500||4.7%|
|25||Big Bear, CA||$336,900||4.6%|
We hope our Insider’s Guide to the Top 25 Vacation Rental Markets helps prepare you for a rewarding vacation home investment. Here are three takeaways to keep in mind as you start shopping for homes:
1. It’s a great time to buy
Even though the word is out and more people than ever before are investing in vacation rentals, there are still plenty of affordable areas to buy a vacation home. We hope our guide helps you find one that’s right for you.
2. More markets are extending their booking seasons
Growing rental demand and improved guest experiences such as online booking and hotel quality amenities have led to many vacation rental markets extending their seasons. As booking seasons expand, so does occupancy, effectively increasing revenue for vacation homeowners. Buying low in a 1-2 season market that shows potential to become a 3-4 season market is likely to pay off
down the road.
3. Going big can pay off
To maximize ROI, consider investing in large vacation homes that make good family rentals, but don't have much demand as primary residences. For example, seven-bedroom homes make great income-generating properties, but there’s little demand for these homes because seven-bedrooms is more than most families need as a primary residence.
Whether you’re ready to buy a vacation home and want help identifying the perfect market or you already have a market in mind, we’re here to help. Give us a call at 888.847.3340 and we can put you in touch with a local expert.
Ready to Invest in a Vacation Rental?
* This document is for information and illustrative purposes only. It is not intended to provide “investment advice” or a “recommendation” regarding a course of action. The discussion is general in nature and has not taken into account your personal financial position or objectives. You should consult a licensed financial advisor or other professional to discuss your specific situation.
**Estimated rental income figures and home sale prices are based on historical averages; for any specific property, the actual revenue, purchase price, and cap rate may differ materially from estimated amounts and depend on a wide range of factors outside Vacasa's knowledge or control, such as the property's condition, layout, and furnishings; expenses associated with the acquisition and ownership of the property (such as property taxes, utility fees, HOA fees, insurance fees, and mortgage-related expenses); rental calendar availability; existing and future regulations; current and future economic, social, and political trends and conditions; and weather and environmental factors. These estimates do not take into account the potential impact of state income taxes.
Vacasa makes no representations or warranties, express or implied, about the accuracy of this document. Furthermore, Vacasa has no obligation to update, modify or amend this document or to otherwise notify users in the event that any opinion, assumption, forecast or estimate set forth herein changes or subsequently becomes inaccurate. Therefore, you should not place undue reliance on statements in this document.