Real Estate News & Commentary

Top 25 Best Places to Buy a Vacation Home in 2019

Expertise: Landlording & Rental Properties
15 Articles Written
Pigeon Forge and Sevierville Tennessee Drone Aerial.

When considering buying a vacation home, especially one to be used as a short-term rental, it is important to consider the factors that will impact the return on your investment (ROI). 

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One of those is of course location. 

For the second year in a row, I have pulled together a ranking of the top places to buy a vacation home, which is largely based on cap rate. For those who are not familiar, cap rate is the rate of return on investment and is calculated by dividing the net operating income (income less expenses) by the home’s purchase price.

As a general rule, if the cap rate is greater than the interest rate, you’ll come out ahead. If the cap rate is lower than the interest rate, you’ll be relying on appreciation for your return, making it a potentially riskier investment. 

Related: Cap Rate: A Must-Have Number for Rental and Commercial Investors

Below are the best places to buy in 2019. This year, we’re seeing a lot more mountain towns show up next to popular beach destinations.

While Florida earned the highest number of markets for the second year in a row, it was Sevierville, Tenn., that took top honors, followed by nearby Whittier, N.C., both nestled in the Smoky Mountains. 

Read on for the full top 25 list ranked by cap rate, and start planning for your vacation home investment today. 

Smoky mountain sunset

Top 25 Best Places to Buy a Vacation Home in 2019

Rank City Median Home Price Cap Rate
1 Sevierville, TN $239,976 10.30%
2 Killington, VT $208,828 9.27%
3 Davenport, FL $255,390 8.39%
4 Whittier, NC $178,000 7.91%
5 Kissimmee, FL $264,863 7.23%
6 Dauphin Island, AL $345,281 6.67%
7 Myrtle Beach, SC $213,950 6.18%
8 Key West, FL $763,109 6.06%
9 Fort Bragg, CA $509,500 5.87%
10 Big Sky, MT $585,000 5.43%
11 Blue Ridge, GA $273,000 5.37%
12 Gulf Shores, AL $345,135 5.33%
13 Panama City Beach, FL $347,430 5.31%
14 Warren, VT $262,003 5.30%
15 Marathon, FL $639,000 5.14%
16 Kihei, HI $708,161 5.04%
17 Scottsdale, AZ $513,301 5.03%
18 Orange Beach, AL $475,026 4.80%
19 Harbor Springs, MI $256,303 4.70%
20 Rhododendron, OR $315,744 4.70%
21 Ellijay, GA $243,000 4.65%
22 Seaside, OR $373,258 4.65%
23 Waikoloa, HI $575,422 4.64%
24 Cocoa Beach, FL $370,406 4.63%
25 Destin, FL $484,154 4.50%

Which destination appeals to you most? 

Comment below!

Shaun Greer currently serves as the senior director of real estate at Vacasa and is responsible for the in-house real estate activity and broker/agent partnerships for the company. He brings more than 12 years of experience in mergers and acquisitions, joint ventures and public and private partnerships to this role. A licensed real estate agent, Shaun leads Vacasa Real Estate, a program launched within the parent company in 2018. Vacasa Real Estate is a network connecting leading real estate agents with buyers and sellers of vacation properties. Vacasa Real Estate currently partners with agents from over 80 leading real estate companies such as Berkshire Hathaway, Century21, Coldwell Banker, Keller Williams, RE/MAX and Sotheby’s. Shaun has been with Vacasa since 2015 and has held several positions including director of corporate development and mergers and acquisitions manager. When not cultivating relationships within the vacation rental industry or using data to support decisions, he is enjoying time with his family and outdoor sports.

    Gino Barbaro Rental Property Investor from St Augustine, FL
    Replied 2 months ago
    What do you think of Saint Augustine, Florida?
    Terry Lowe
    Replied 2 months ago
    Ski resorts are difficult. Often they are pricey, and it’s hard to keep properties rented enough through the year to make a profit.
    Eddy Ogbekhilu
    Replied 2 months ago
    How about Tampa Florida? Lutz fl to be precise...would like to get some kind of feedback from the BP community.
    Dominic Dilello from Beverly Hills, California
    Replied 2 months ago
    How do you find Costa Rica as a vacation rental invesment?
    Caroline C. from New York City, New York
    Replied 2 months ago
    We have a few and they are doing well for us, but beware of hidden tax expenses. There have been a lot of tax law changes recently. Many companies (like hiring a company to do the cleanings or also your property managers) now have to legally hire their employees, making the prices go up, and many companies now have to start charging 13% VAT.
    Karen Hamblet Investor
    Replied 2 months ago
    Difficult to buy a rental cabin in Sevierville for the price you have listed. True, homes are for sale at lower prices but not legally zoned rental cabins. I've been looking.
    Dave Rav from Summerville, SC
    Replied 2 months ago
    This is rather interesting. I guess because you based it significantly on cap rate.
    Mike Dice
    Replied 2 months ago
    How does vacasa calculate cap rates without knowing expenses ? Utilities, insurance, flood risk, snow removal, HOA, repairs etc etc. These are sky high in some vacation areas compared to your average SFH. Or was this data pulled from an outside source ?
    Jason Merchey Rental Property Investor from Summerville, SC
    Replied 2 months ago
    Count Charleston SC out, Jesus Christ we have been hammered by weather lately. The whole main downtown is wonderful but sits right at sea level! And the fools running this country aren't doing jack-#hit about rising sea levels. Stay away unless you're vacationing - and then be prepared to pay $300 a night for a hotel.
    Dylan H. Rental Property Investor from Savannah, GA
    Replied 29 days ago
    Can you really use Cap Rate to analyze a vacation rental? It’s an appraised value despite how much income it produces.