Owning a vacation rental can be lucrative.
A growing number of travelers are opting out of hotels and seeking condos or apartments that make them feel like they are living temporarily like a local.
Vacasa, a vacation rental property management company, has for the first time ranked the top 25 markets for buying a vacation rental in the USA.
The “Insider’s Guide to the Top 25 Markets for Buying a Vacation Rental” comes as the company launches Vacasa Real Estate, a network that connects buyers and sellers of vacation homes with licensed real estate agents across the country. Vacasa also offers a Vacation Rental Estimator for prospective buyers to determine the earning potential for a specific property.
To come up with the list, the company analyzed home sales data in vacation markets throughout the country. It then overlaid that with the actual performance data for more than 500,000 vacation rental properties. From there, it compared each region’s net operating income with the cost of buying a home to come up with the market’s cap rate. The rankings were based on that cap rate.
“Not only is it important to consider the earning potential of the home to ensure the return on investment is on par with expectations, but also the factors that could draw guests to the area,” says Eric Breon, founder and CEO of Vacasa.
Nearly half of the top 25 markets are concentrated in the southeast part of the county with the Forgotten Coast of Florida ranking No. 1. Florida dominated the list, with nine of its communities making the cut. The Smoky Mountains of Tennessee ranks No. 2, and Kissimmee, also in Florida, made it to No. 3.
Rounding out the top five are two South Carolina communities: Myrtle Beach and Hilton Head Island.
Representing the west coast are Sunriver, the Central Coast, and the North Coast of Oregon; Lake Chelan and Leavenworth in Washington; and Coachella Valley and Big Bear in California. Hawaii made the list with North Kona.
See the 25 top markets to buy a vacation rental in the slideshow above.