Best places to buy a beach house in 2019

Beach house calling

When it comes to investing in a vacation rental property, there are many things to consider, but one thing is for certain: beachfront properties, or those near the ocean, never go out of style. Before you start scanning coastlines, there are a few things to think about—especially if you plan to use your new home as a short-term vacation rental.


Cap rate and coastlines

In this report, we rank vacation rental markets based on aggregate cap rate, the ratio of a property’s net operating income over its cost.

To determine net operating income for this study, we first calculated gross rental income for each market. From there, we subtracted each market’s average operating costs—factoring in things like management fees and property tax rates. Finally, we divided those figures by the historical costs of buying a vacation rental to determine cap rates for each market.

Familiarizing yourself with cap rate will help you make a more informed choice when deciding where to buy a beach house. If you already have your sights set on a specific property, check out our vacation rental income calculator to determine how much income your home could generate when managed by Vacasa.

Need help with the search? Vacasa Real Estate is here to help you find the right vacation home. For now, here’s where we think you should start searching:

The 10 best places to buy a beach house in 2019, ranked

Market

Cap rate

Median home cost

1

Ocean Shores, WA

7.6%

$239,460

2

Myrtle Beach, SC

7.4%

$257,000

3

Panama City Beach and Santa Rosa, FL

6.1%

$419,900

4

Gulf Shores, AL

5.8%

$409,900

5

Galveston Island and Port Bolivar, TX

5.6%

$350,000

6

Kauai, HI

5.4%

$696,028

7

Ocean City, MD

5.4%

$285,000

8

Key West, FL

5.0%

$817,000

9

Marathon to Long Key, FL

4.9%

$698,000

10

Cocoa Beach, FL

4.7%

$339,000

view of beach from Ocean Shores, WA beach house

1. Ocean Shores, WA

Topping our list is a small town on the coast of Washington State. If that doesn't immediately conjure up images of tropical breezes and suntanned skin, you’re right. Known as the Razor Clam capital of the West, Ocean Shores is perfect for those seeking outdoor adventure on its stretch of beaches and waterways. If all this wasn’t enough, Ocean Shores’ strong cap rate of 7.6% earns it the #1 spot on our list.

Explore Ocean Shores vacation rentals and learn about buying a vacation home in Ocean Shores.

Market size

680

Median annual gross rental revenue

$32,383

Median home price

$239,460

Cap rate

7.6%

view of beach from Myrtle Beach vacation home

2. Myrtle Beach, SC

This Atlantic coast gem is a popular Southeast vacation rental destination for its natural beauty and variety of activities. Myrtle Beach calls for swimming, sandcastles, deep-sea fishing, and dolphin cruises, so the region truly has something for everyone. Even those who prefer to stay on the green can find a bounty of golf courses engineered by some of the world’s top golfers and architects, including Robert Trent Jones and Arnold Palmer. When searching in Myrtle Beach, look for vacation rental properties that are near water of any kind; oceanfront and channel-front homes are going to generate the most income. A boat dock is also a major plus for potential renters who want to take full advantage of the ocean blue.

Explore Myrtle Beach vacation rentals and learn about buying a vacation home in Myrtle Beach.

Market size

10,124

Median annual gross rental revenue

$32,546

Median home price

$257,000

Cap rate

7.4%

Turquoise chairs overlooking turquoise waters of Panama City Beach

3. Panama City Beach and Santa Rosa Beach, FL

Turquoise waters and 27 miles of sugar-white sand beach… We need not say more, but we will. Panama City Beach in Northwest Florida is a popular vacation destination for those in the South and the Midwest, ensuring a steady stream of vacationers throughout the year—especially around spring break. A surge of development means fewer historic homes and more high-rises, but PCB remains high on the real estate investment list. Roughly 30 miles northwest lies one of Travel + Leisure’s top five favorite towns in America, Santa Rosa Beach. Known for its classic appeal and access to nature, families seeking a coastal Americana experience will be at your vacation rental door.

Explore Panama City Beach and Santa Rosa Beach beach houses and cottage rentals, and learn about buying a vacation home.

Market size

13,267

Median annual gross rental revenue

$44,555

Median home price

$419,900

Cap rate

6.1%

view of beach from Gulf Shores, AL vacation rental

4. Gulf Shores, AL

Positioned on the Florida/Alabama state line, Gulf Shores has a variety of features that draw potential vacation rental guests to the area. Popular day trip destinations are within miles, unique yet family-friendly activities abound, and popular concerts and food festivals beckon the millennial traveler. For these reasons and more, Gulf Shores is a year-round destination and vacation rental bookings remain high. In this area, there’s a vacation home for everyone. While median home price sits around $400,000, explore your options—a condo property could yield the returns you are seeking, but so could a three-bedroom home.

Explore Gulf Shores vacation rentals and learn about buying a vacation home in Gulf Shores.

Market size

10,461

Median annual gross rental revenue

$39,045

Median home price

$409,900

Cap rate

5.8%

gorgeous view from deck of Galveston, TX beach house

5. Galveston Island and Port Bolivar, TX

When buying a vacation rental on Galveston Island, you better learn the lingo. Both “BOI” (born on the island) residents and “IBC” (islander by choice) residents take pride in living on the island. In both cases, locals welcome tourists, and while there are plenty of hotels on the island, vacation rentals reign supreme. With a median home price hovering around $300,000, vacation home buyers should not only act on available properties quickly, but come check them out for themselves. Galveston homes bring bright colors and interesting architecture, which make for great vacation rental listing photos. The same goes for Port Bolivar, which lies just north across the water. A laid-back, drive-on-the-sand community awaits.

Explore Galveston and Port Bolivar beach house rentals, and learn about buying a vacation home.

Market size

2,243

Median annual gross rental revenue

$40,791

Median home price

$350,000

Cap rate

5.6%

Private hot tub with beach and ocean views from Kauai, HI beach home

6. Kauai, HI

There’s not much mystery about why to buy a vacation home in Hawaii. Travelers flock from around the world to experience the inherent beauty of the islands and to take part in a myriad of activities and sightseeing opportunities. The Aloha State has been a dream place to invest for decades, but what makes Kauai so unique is its cap rate, which is typically around 5.4%. While there are regulations to consider, a two-bedroom vacation condo is a commonly sought-after accommodation among travelers, and most condos near the ocean are vacation-rental-friendly. If a condo doesn’t suit your buying needs, fear not. All homes on the North Shore area of Princeville are also zoned for short-term vacation rental stays.

Explore Kauai vacation rentals and learn about buying a vacation home in Kauai.

Market size

4,151

Median annual gross rental revenue

$61,117

Median home price

$696,028

Cap rate

5.4%

view of beach from Ocean City, MD beach rental

7. Ocean City, MD

Swimming, sunning, and socializing near the Atlantic have put Ocean City on “best beaches in America” lists for years. In addition to hitting the sand, travelers can enjoy an expansive, three-mile beachfront boardwalk that’s home to local shops, restaurants, amusement parks, and arcades—all accessible by foot or bike. Those who are seeking a bit more action will find it. Surfing, fishing, kayaking, and canoeing are all available in Ocean City. Vacation home buyers in this market should keep one thing in mind: water. While Ocean City has a diverse inventory of vacation homes, being near the ocean or the bay is key in driving bookings. Can’t swing it? A pool or boardwalk access will help increase your stays.

Explore Ocean City oceanfront vacation rentals and learn about buying a vacation home in Ocean City.

Market size

3,805

Median annual gross rental income

$30,769

Median home price

$285,900

Cap rate

5.4%

8. Key West, FL

While each vacation rental market has a distinct personality, Key West might have one of the most memorable. The area’s architecture and laid-back feel bring travelers back to a simpler time. This tropical paradise, known for breathtaking sunsets and spectacular reefs, is also home to world-class kayaking and scuba diving. The vibrant nightlife and local fare also add to the draw of the area, and after-dinner walks on the beach are a must. The vacation home inventory in Key West is diverse but holds a steady cap rate at 5%. Whether you settle on an old Victorian, a conch house, or an upscale condo, Key West delivers on vacation rental revenue.

Explore Key West vacation rentals and learn about buying a vacation home in Key West.

Market size

1,890

Median annual gross rental revenue

$67,204

Median home price

$817,000

Cap rate

5.0%

View of turquoise waters and beach from Marathon, FL beach house

9. Marathon to Long Key, FL

The Florida Keys are the perfect place to unwind, umbrella cocktail in hand. Sunny and spectacular, the Keys have a variety of things to offer. But, if you’re looking to invest in a vacation rental, look no further than Marathon. Located square in the middle of the island chain, you can find Marathon on the other end of the famous Seven Mile Bridge. There, travelers can indulge in every water sport imaginable—from paddleboarding and fishing to diving and snorkeling. Vacation rentals between Marathon and Long Key are plentiful, so if you’re looking to stand out and get the most on your vacation home investment, look for a pool, a deck, or a dock.

Explore Marathon and Long Key vacation rentals, and learn about buying a vacation home.

Market size

889

Median annual gross rental revenue

$57,918

Median home price

$698,000

Cap rate

4.9%

Balcony overlooking the ocean and beach during sunset in Cocoa Beach, FL

10. Cocoa Beach, FL

Cocoa Beach hangs its (sun) hat on being one of the most affordable beach destinations in Florida. Located on the Space Coast and just an hour east of Orlando, Cocoa Beach lures travelers with unique activities and experiences. Into nature? Hop on a kayak or an airboat and get in touch with the area’s wildlife. History buff? Check out Kennedy Space Center, the U.S. Space Walk of Fame and Museum, and the Air Force Space and Missile Museum, which are all nestled in Cocoa Beach and ripe for exploring. With these activities and Disney World just an hour away, search for homes with multiple bedrooms and large spaces for families to relax after a day of exploring.

Explore Cocoa Beach vacation rentals and learn about buying a vacation home in Cocoa Beach.

Market size

1,077

Median annual gross rental revenue

$31,082

Median home price

$339,000

Cap rate

4.7%

Before you buy

Our Best Places to Buy a Beach House report spans coast to coast, but no matter where you buy, keep these top tips in mind:

  • Define your purpose.
    • There are two primary reasons to invest in a beach house: for personal use or for investment purposes. If you are more focused on ROI, choosing the market with the best cap rate is more likely to garner the returns you’re seeking. If you want to use the home for family vacations, take a look at markets within a two-hour drive from home.
  • Water wins.
    • Not everyone has the means to purchase oceanfront real estate, and that’s okay! But, travelers headed to the coast are likely in search of the sea. Share the pathways and shortcuts to the beach, so guests know it won’t be a hassle to get there. Beach still out of reach? Consider a home with a pool.
  • Not everyone’s a beach bum.
    • While relaxing on the sand and listening to the sounds of rolling waves may sound like a dream for most, it’s not everyone’s perfect vacation. Be sure to check out your prospective beach town’s restaurants and other entertainment options.
  • Find the right real estate agent.
    • When it comes to buying a beach house, not all real estate agents are created equal. If you plan to use the home as a vacation rental, find an agent who has insights on vacation rental markets and the necessary data to support your purchase, so you can make the most informed investment.
  • Design it right.
    • Once you’ve decided on a property worth investing in, make sure it’s set up to accommodate potential guests and host them with all the right amenities, like pet-friendliness and the ever-popular hot tub.


Why an insider’s perspective matters

As the largest vacation rental manager in North America, Vacasa cares for more vacation homes than any other company. We host millions of guests per year—and we do it through the support of our local teams, all active community members in the vacation destinations where we operate.

For this guide, we combined local expertise with national performance data to provide you the best possible resource for buying a beach town vacation rental home that’s set up to generate optimal revenue. Click any links to get a local look at vacation rental real estate.



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 Florida LLC; Vacasa Louisiana L.L.C. (licensed in Louisiana); Vacasa Michigan LLC, 947-800-5979; 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; Vacasa North Carolina LLC; Vacasa Pennsylvania LLC; Vacasa Real Estate LLC (licensed in Idaho and Oregon); Vacasa Real Estate LLC (licensed in Colorado, 720-727-9358); Vacasa Real Estate LLC (licensed in Washington, Robert Brush, Designated Broker); Vacasa Resort Rentals of Hilton Head Island LLC; Vacasa South Carolina 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, Rickie Miller, Licensed Property Manager; Vacasa Virginia LLC; Vacasa Wisconsin LLC.

*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. Home costs last updated May 15, 2019.

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.