{"id":158649,"date":"2023-09-22T14:48:44","date_gmt":"2023-09-22T20:48:44","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=158649"},"modified":"2024-02-29T18:00:09","modified_gmt":"2024-03-01T01:00:09","slug":"beach-houses-vs-lake-houses-short-term-rentals","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/beach-houses-vs-lake-houses-short-term-rentals","title":{"rendered":"Beach Houses vs. Lake Houses: Which Properties Provide Better STR Cash Flow?"},"content":{"rendered":"\n

There\u2019s nothing quite like stepping out onto the sand to gaze at the ocean or looking out over a lake. It\u2019s a luxury sought by homebuyers and travelers alike. Demand for waterfront homes, along with their limited supply, means that homes with a waterfront view are worth about 78% more on average, according to an American Home Shield <\/span>report<\/span><\/a> based on Zillow data. <\/span><\/p>\n\n\n\n

Buying a waterfront property, therefore, requires a more significant investment. But, renting out a waterfront property also offers the potential to generate higher returns. <\/span><\/p>\n\n\n\n

Shoreline Properties Can Be Cash Cows<\/span><\/h2>\n\n\n\n

Since the beginning of 2022, waterfront properties have generated 46% more revenue per property than nonwaterfront properties, according to data from vacation property management company <\/span>Evolve<\/span><\/a>. \u201cHaving shoreline real estate often correlates with stronger revenue potential,\u201d says Greg Davis, Evolve\u2019s Owner Growth expert. <\/span><\/p>\n\n\n\n

That said, there are also opportunities for investors looking to buy less-expensive properties in a beach or lake market that don\u2019t have direct access to the water. \u201cDepending on the market, there can still be demand in a beach or lake town for properties that aren\u2019t directly waterfront,\u201d says Davis. \u201cHomes that are in close proximity to the water or other key attractions in that market can still see strong returns at lower upfront costs.\u201d<\/span><\/p>\n\n\n\n

If you go that route, be sure the property has <\/span>sought-after amenities<\/span><\/a> that allow it to compete with waterfront properties for bookings, suggests Davis.  <\/span><\/p>\n\n\n\n

When comparing beachfront and lakefront properties, homes with beach access or ocean views tend to get more bookings than homes with lake access or lake views. Since the beginning of 2022, beach properties have seen 7% higher occupancy rates on average than lake properties, Evolve\u2019s data shows. But an individual lake property with stellar views and amenities could still outperform. <\/span><\/p>\n\n\n\n

Davis says it\u2019s also important to consider the property type that performs best in each market. \u201cCondos are often quite successful in top beach markets, while cabins are often high earners in top lake markets,\u201d he says. <\/span><\/p>\n\n\n\n

Related: <\/span><\/em><\/strong>How to Buy a Vacation Rental Property<\/span><\/em><\/strong><\/a><\/p>\n\n\n\n

The Best Waterfront Markets for 2023<\/span><\/h2>\n\n\n\n

It\u2019s up to investors to choose the properties most likely to generate high returns. But to help you zero in on the best markets, Evolve crunched the numbers. The company looked at vacation rental performance metrics for beach and lake towns across the United States. Evolve also compiled internal data, along with Zillow and Redfin data, to identify median listing prices and estimated annual vacation rental expenses to calculate the capitalization rate. <\/span><\/p>\n\n\n\n

Best places to buy a beach house<\/span><\/h3>\n\n\n\n

\u201cHigh-earning beach houses tend to have convenient beach access and ocean views,\u201d says Davis. \u201cPools are another very popular amenity across strong beach markets, whether private or as part of a beachfront condo community.\u201d <\/span><\/p>\n\n\n\n

Evolve identified <\/span>12 markets<\/span><\/a> that investors should be aware of. Here are the six markets with the highest potential cap rates. <\/span><\/p>\n\n\n\n

Hampton, Virginia<\/span><\/p>\n\n\n\n