Investment properties in beachside communities offer the highest ROI potential, a new analysis shows.
Here are the most profitable hotspots this year.
Vacation homes have proven to be profitable for real estate investors, and owning a short-term rental near a beach may offer the best prospects. Vacasa, a vacation rental management platform, recently unveiled its annual list of the top 25 places to buy a vacation home(link is external), based on capitalization rate or the rate of return on investment.
Lake Anna, Va., held on to the top spot on the 2023 rankings as the best place to buy a vacation home, according to Vacasa’s analysis, which looked at home sales and vacation rental performance data over the last 12 months. With a median sale price of $405,500, Lake Anna offers a cap rate of 10.32%—the highest of the vacation hotspots on the list.
Here are the markets that topped Vacasa’s list of the best places to buy a vacation home in 2023:
1. Lake Anna, Va.
Cap rate: 10.32%
Average gross rental revenue: $64,121
Median sale price: $405,500
2. Okaloosa Island, Fla.
Cap rate: 9.08%
Average gross rental revenue: $53,832
Median sale price: $360,000
3. Sandbridge, Va.
Cap rate: 6.47%
Average gross rental revenue: $88,702
Median sale price: $928,900
4. Rehoboth Beach, Del.
Cap rate: 6.46%
Average gross rental revenue: $58,992
Median sale price: $618,000
5. Navarre, Fla.
Cap rate: 6.42%
Average gross rental revenue: $47,531
Median sale price: $420,000
6. Gulf Shores, Ala.
Cap rate: 6.09%
Average gross rental revenue: $48,169
Median sale price: $475,000
7. Palm Coast, Fla.
Cap rate: 5.69%
Average gross rental revenue: $38,212
Median sale price: $360,000
8. Corolla, N.C.
Cap rate: 5.47%
Average gross rental revenue: $80,423
Median sale price: $927,500
9. Nags Head, N.C.
Cap rate: 5.45%
Average gross rental revenue: $53,939
Median sale price: $615,500
10. Rockaway Beach, Ore.
Cap rate: 5.23%
Average gross rental revenue: $37,030
Median sale price: $340,000
Melissa Dittmann Tracey is a contributing editor for REALTOR® Magazine, editor of the Styled, Staged & Sold blog, and produces a segment called “Hot or Not?(link is external)” in home design that airs on NAR’s Real Estate Today radio show. Follow Melissa on Instagram and Twitter at @housingmuse.