2022: Top 25 Best Places to Buy a Vacation Home
We've updated this report for 2023—check out the newest version here.
While some vacation rental home buyers have their sights set on a single destination, others may be open to multiple locations that check certain, distinct boxes. Either way, potential rental revenue typically is (and should be) a consideration when deciding the best places to invest in real estate. So, for people still on the hunt for their perfect vacation rental destination, let us give you a head start. We ranked our top 25 markets* based on capitalization (cap) rate, or rate of return on your investment, including helpful data points like median home sale price and annual gross rental revenue, along with key insights on today’s vacation rental real estate market. Though global market conditions are reportedly slowing the recent boom of second home sales, there’s a positive outlook for prospective vacation rental buyers: The real estate market is re-stabilizing and both established and up-and-coming destinations are showing strong cap rates.
While vacation rentals in the most popular vacation destinations can still deliver healthy returns for homeowners, climbing median home prices are affecting cap rates in several of our past top markets. The upside? That cap rate compression gives buyers even more options to consider, with over a dozen new markets on the list this year.
After several years of historically high demand—coupled with historically low inventory—the real estate market is stabilizing and inventory is catching up. That’s good news for buyers who have more opportunity to regain some leverage in what is still, predominantly, a seller’s market.
A theme among this year’s top markets? Drive-to, waterfront destinations—which is a similar theme in our other reports, too. According to our 2022 Vacation Rental Buyer Report, short-term rental buyers are most interested in beach markets, up 10% over 2021. On the guest side, sunny beaches dominated the 10 most-searched cities in Vacasa’s 2022 Vacation Rental Search Report.
The 2022 Vacation Rental Buyer Report also shows that younger buyers are now the majority of vacation home purchasers, and millennials and Gen Z are willing to spend a bit more than the older generations—with budgets often over $400,000. Fortunately, this year’s list features markets with median home prices both above and below that threshold, so buyers can find a location that meets their financial goals and motivations.
Though the same buyer report indicates that experienced vacation rental buyers are growing in number—following a surge of first-time buyers over the past few years—both sides agree: “Vacation rental industry knowledge” is the most important agent qualification (which Vacasa Real Estate has in spades). In addition to providing rental income projections, an experienced agent should also be knowledgeable about local short-term rental regulations and permitting.
Market |
Cap rate |
Median home sale price |
|
|---|---|---|---|
1 |
12.2% |
$435,000 |
|
2 |
10.7% |
$295,000 |
|
3 |
10.3% |
$354,000 |
|
4 |
10.2% |
$930,000 |
|
5 |
9.0% |
$425,000 |
|
6 |
8.5% |
$490,250 |
|
7 |
7.8% |
$470,000 |
|
8 |
7.8% |
$510,000 |
|
9 |
7.7% |
$333,000 |
|
10 |
7.5% |
$437,250 |
|
11 |
Cape Coral, FL |
7.3% |
$436,475 |
12 |
Frankfort, MI |
7.3% |
$454,900 |
13 |
Tucson, AZ |
7.1% |
$340,000 |
14 |
Daytona, FL |
7.0% |
$260,500 |
15 |
Boothbay, ME |
6.9% |
$413,000 |
16 |
Savannah, GA |
6.8% |
$300,000 |
17 |
Nags Head, NC |
6.7% |
$887,000 |
18 |
Westport, WA |
6.7% |
$446,547 |
19 |
Nashville, TN |
6.6% |
$470,000 |
20 |
Bradenton, FL |
6.5% |
$436,450 |
21 |
Depoe Bay, OR |
6.4% |
$486,000 |
22 |
Dauphin Island, AL |
6.4% |
$775,000 |
23 |
Hatteras Island, NC |
6.4% |
$850,000 |
24 |
Port St. Joe, FL |
6.4% |
$500,000 |
25 |
Hilton Head Island, SC |
6.3% |
$688,000 |
This year’s number one destination is the second largest lake in Virginia, stretching 17 miles long with sparkling water and sandy beaches. Lake Anna is split into two sections: a public side with waterfront restaurants, marinas, and boat launches, and a private side where no commercial operations are allowed. Summer is an obvious choice for vacationing on the lake, but hiking through the colorful trees along the lakeshore in the fall is a must-see experience. Homes on the lake stretch across three counties with plenty of waterfront options that offer a splashy cap rate of 12.2% for homeowners.
Cap rate |
12.2% |
Median home sale price |
$435,000 |
Annual gross rental revenue |
$81,293 |
With waves rolling in from the Gulf of Mexico, Port Aransas is island living at its finest—and, if casting a line is your idea of a good time, you’ll be happy to know it is also the “Fishing Capital of Texas.” Like many beach towns, there is plenty of water recreation to entertain homeowners and guests, but it also has a thriving art community, fine dining, and is a prime spot for bird watching. This area of the island is peppered with pastel-colored beach homes and townhouses, some with beachfront views and almost all with the pool amenity box checked. Luckily, vacation homes here are relatively affordable, with a median home sale price of $295,000, and a cap rate that’s a 10 (10.7%, to be exact).
Cap rate |
10.7% |
Median home sale price |
$295,000 |
Annual gross rental revenue |
$53,717 |
Palm Coast is the perfect place to support an active lifestyle, with numerous oceanfront golf courses (including a few designed by Jack Nicklaus himself) and over 125 miles of hiking and biking trails through state parks and nature preserves. It also has a notable art scene with Insta-worthy murals and other outdoor art attractions to serve as a backdrop for lasting vacation memories. With a reasonable median home sale price of $354,000, this vibrant yet relaxing town offers a variety of vacation homes, some with wrap-around decks overlooking the shoreline and others tucked into neighborhood communities more inland. From either location, it’s an easy drive to both St. Augustine and Daytona.
Cap rate |
10.3% |
Median home sale price |
$354,000 |
Annual gross rental revenue |
$59,482 |
Nestled along the Outer Banks of North Carolina, Corolla is making a repeat appearance on our Top 25 list—with an impressive jump up from the number 24 spot in 2021. The small-town vibe of this beach community doesn’t mean guests sacrifice access to high-end dining, shopping, or unique experiences. Visitors can find vacation homes of all kinds in Corolla, from the cozy and quaint to the downright luxurious, with some vacation rentals featuring private pools, theater rooms, indoor hot tubs, and direct beach access. One of the most popular attractions in Corolla is its wild horses, a herd of Colonial Spanish mustangs that roam the area’s beaches freely. Snag your spot on the sand for around $930,000.
Cap rate |
10.2% |
Median home sale price |
$930,000 |
Annual gross rental revenue |
$131,121 |
Okaloosa Island makes up three miles of white sandy beaches on Santa Rosa Island, tucked between Destin and Fort Walton Beach, Florida. With nearly everything within walking distance, it’s the ideal location for a simple and enjoyable beach vacation. The downtown boardwalk offers small shops to meander through and eateries dishing out margaritas and the fresh catch of the day. Visitors love the Island Fishing Pier, where they can drop a line or enjoy a sunset stroll. With a median home sale price of $425,000, most vacation rental options are in stately condo complexes spread across the island and feature large swimming pools with plenty of outdoor lounging space—a Florida must.
Cap rate |
9.0% |
Median home sale price |
$425,000 |
Annual gross rental revenue |
$62,163 |
Fort Lauderdale offers big-city vibes set against 24 miles of golden beaches on Florida’s southeastern coast. Best of both worlds, right? The downtown is lined with shopping boutiques, high-end restaurants, and unique venues, while also serving as a hub for year-round sporting events. The area is also famous for its lobster season—and lobster miniseason—when visitors can pluck dinner straight from the ocean. After a day on the seas, retreat to one the many vacation rental homes perched along the canals that lead out to the ocean and range from cozy cottages to modern homes. The median home sale price rests around $490,000, but can reel in a cap rate of 8.5%.
Cap rate |
8.5% |
Median home sale price |
$490,250 |
Annual gross rental revenue |
$68,031 |
With 300 days of sunshine annually, it’s no surprise that Phoenix, Arizona, is a year-round vacation hotspot and has seen tremendous growth as of late thanks to a thriving tech scene. The city and its surrounding landscape have so much to offer locals and visitors alike, from red-rocky hikes and championship golf courses to luxury outdoor shopping malls and a lively nightlife. The attractions are endless and include plenty of family-friendly options, too, like the educational fun found at the Phoenix Zoo and Arizona Science Center. The vacation homes and condos ring in at a median home sale price of $470,000, leaving just one question: bright city views or sweeping vistas of the desert terrain?
Cap rate |
7.8% |
Median home sale price |
$470,000 |
Annual gross rental revenue |
$58,363 |
This quaint beach town on the coast of Lake Michigan is a hidden gem full of eclectic art galleries, secluded beaches, and plenty more ways to pass the day. Wander through the shops downtown and dine outside at one of the many eateries with water views. If adventure is calling your name, hop on one of the area's famous dune buggies and zip up and down the sandy hills along the coast. Saugatuck is only a two-hour road trip from Chicago, making it an easy escape from the city. With a potential cap rate of 7.8%, vacation homes can be found mixed in the downtown streets, tucked back in the woods (the perfect spot to take in the fall foliage), or lakeside.
Cap rate |
7.8% |
Median home sale price |
$510,000 |
Annual gross rental revenue |
$80,192 |
Sylva is a historic small town at the foothills of the Great Smoky Mountains. A fan-favorite attraction is the Jackson County Historic Courthouse, the most-photographed building in Sylva, built on a hill overlooking the tree-lined downtown. As you can imagine, outdoor activities are abundant in this mountain town, with many guests spending the days hiking wooded trails or fly fishing on the area’s snaking rivers and streams. Here, where the cap rate stacks up at 7.7%, log cabins offer a front-row seat to nature and sitting around a campfire roasting marshmallows is always in season.
Cap rate |
7.7% |
Median home sale price |
$333,000 |
Annual gross rental revenue |
$45,038 |
Boasting over 32 miles of sandy white beaches, Gulf Shores is a mecca of pure paradise on the Alabama coastline. However, this family-friendly destination is more than just life at the beach, with award-winning restaurants, championship golf, amusement parks, and water sports to entertain guests year-round. A recurring destination in our Best Places to Buy a Vacation Home reports, a Gulf Shores vacation home or condo will cost just over $400,000 but can yield a cap rate of 7.5%. How’s that for Southern hospitality?
Cap rate |
7.5% |
Median home sale price |
$437,250 |
Annual gross rental revenue |
$53,283 |
Are you looking to purchase your first vacation rental or wish to explore a new market? Download our complete list covering the best markets to own a vacation rental in 2022, along with the annual gross rental revenue for each area.
*Our methodology
To determine its ranking of top vacation rental markets, Vacasa analyzed home sales and vacation rental performance data from the last 12 months for vacation destinations throughout the country where Vacasa and its licensed subsidiaries manage at least 50 units and there are 250+ non-Vacasa managed vacation rentals. To determine average gross rental revenue (homeowner revenue made from bookings, excluding any fees) for a market, we averaged actual performance data for Vacasa managed units in the past 12 months and adjusted that number to reflect assumed usage by the owner. To calculate average cap rate, we considered the averages of the following in each market: property taxes, utilities, insurance, and property management fees.
Disclaimer
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 averages for a given market for the prior 12 months; 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.
Many locations restrict or impose conditions on the use of properties as vacation rentals, or restrict vacation rentals to certain defined areas. Before purchasing a particular property as a potential vacation rental a buyer should confirm that the property can legally be used for this purpose.
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.
Vacasa offers property management and other real estate services directly through Vacasa LLC and through Vacasa LLC's licensed subsidiaries. Click here for more information about Vacasa's licensed real estate brokerage/property manager in your state. Vacasa’s licensed real estate brokerages/property managers include: Vacasa Alabama LLC; Vacasa Arizona LLC; Vacasa Colorado LLC (Mark Graham); Vacasa Delaware LLC, 302-541-8999; Vacasa Florida LLC; Vacasa Louisiana LLC, Dana MacCord, Principal Broker, ph 504.252.0155 (Licensed in LA); Vacasa Michigan LLC, 947-800-5979; Vacasa Missouri LLC, Susan Scanlon, Designated Broker; Vacasa Nevada LLC; Vacasa New Hampshire LLC, P.O. Box 283, Conway NH 03818, Dave Grant, Broker of Record; Vacasa New Mexico LLC, 503-345-9399; Vacasa New York LLC, 888-433-0068, Susan E. Scanlon, Real Estate Broker; Vacasa North Carolina LLC; Vacasa Pennsylvania LLC; Vacasa Real Estate Corporation, California DRE #02105811, Joseph Czapkowicz, California DRE #01380722; Vacation Palm Springs Real Estate, Inc., California DRE #01523013, Joseph Czapkowicz, California DRE #01380722; Vacasa Real Estate LLC (licensed in Colorado, Daned Kirkham); Vacasa Real Estate LLC (licensed in Idaho, Oregon, and Utah); Vacasa Real Estate LLC (licensed in Maine, Michael McNaboe, Designated Broker); Vacasa Real Estate LLC (licensed in Texas, Debra Brock, Designated Broker); Vacasa Real Estate LLC (licensed in Washington, Robert Brush, Designated Broker); Vacasa Seasonals Inc., California DRE #02160171, Lisa Renee Stevens, California DRE #01485234; Vacasa South Carolina LLC; Vacasa South Dakota LLC; Vacasa Tennessee LLC; Vacasa Vacation Rentals of Hawaii LLC, 3350 Lower Honoapiilani Road, Suite 600, Lahaina, HI 96761; Vacasa Vacation Rentals of Montana LLC, Terah M Young, Licensed Property Manager; Vacasa Virginia LLC; Vacasa Wisconsin LLC; Vacasa Wyoming LLC. In Canada, this advertisement is provided by Vacasa Canada ULC, CPBC lic. number 75826, 172 Asher Rd. V1X 3H6 Kelowna, BC.
