The 12 Best Places to Buy a Vacation Rental Right Now

The Evolve Team
The Evolve Team
October 10, 2023

The travel industry is ever-evolving, but one trend has taken firm hold in recent years: travelers want accommodations that feel like a home away from home. It’s why vacation rentals are seeing higher-than-ever demand — to the tune of 450 million users worldwide

That rise in demand is also why investors are looking to tap into its potential, making the industry as a whole more competitive. But vacation rental owners can still see impressive returns with careful evaluation of the best vacation rental markets across the country.

Our real estate experts did just that, crunching the numbers to help focus your search for maximum profit potential. From East Coast gems to character-rich towns in the South, these are the 12 best places to buy a vacation rental right now.

Want help buying the perfect vacation rental for your investment goals? Our team can help identify markets, properties, and partners to blaze your trail to success. Fill out this form to start a conversation today.

In This Article:
Finger Lakes, NY
Holland, MI
Hocking Hills, OH
Palo Pinto, TX
Wisconsin Dells, WI
Savannah, GA
Michigan City, IN
Vernon Township, NJ
Dover, VT
Sevierville, TN
Waldport, OR
Fairbanks, AK

How We Chose the Best Places to Buy a Vacation Rental Investment Property

Our data is based on a combination of proprietary and public data, but the three key metrics we took into account are:

  • Vacation rental performance metrics for vacation destinations across the U.S. to learn where bookings lead to higher median revenue
  • A combination of Zillow, Redfin, and internal data to identify median listing prices in vacation destinations
  • Estimated yearly expenses to run a vacation rental (approximately 30% of total revenue) to help calculate cap rate

In addition to these metrics, we evaluated a vacation property’s potential to outperform market expectations with an Evolve partnership. Below, you’ll see The Evolve Difference highlighting how we helped some of our top vacation rental owners maximize income and significantly beat the market’s projected revenue.

Please note: all data projections reflect ideal-state scenarios. Variables like owner-blocked calendars and extenuating circumstances (like natural disasters) are not factored into these calculations.

1. Finger Lakes, NY

Photo of a sunset over Finger Lakes, NY, with light peeking through the dock piling. Image text reads, "$31,434 median rental revenue. $202,257 median listing price. 10.9% example cap rate."

Nestled in upstate New York just south of Lake Ontario, the Finger Lakes are made of 11 picturesque bodies of water — so it’s no wonder why the area is one of the best places to buy a lake house, too. 

Beyond must-have lake time, travelers can sip their way down wine trails, explore the famous Watkins Glen State Park, and satisfy their inner adrenaline junkie at Seabreeze Amusement Park. This promise of adventure in any season — coupled with close proximity to New York and Toronto — often translates to strong profit potential. 

Unsurprisingly, properties with easy water access tend to do well in the region. But you can further maximize your Finger Lakes returns by tuning into other property details, too. Some Evolve owners earn more than double the median annual revenue with additional perks like kid-friendly amenities and furnished decks or patios. 

It’s important to note, however, that many towns in the Finger Lakes region have permitting and zoning restrictions. Our experts recommend familiarizing yourself with the regulations in your chosen area and connecting with local officials for a more comprehensive understanding of how they apply before you buy.

Image text reads, "The Evolve Difference: Our owners have earned up to $72,625 annually!"

Love the idea of a lake house investment? From the questions you should ask to the best time to buy, here’s everything you need to know.

2. Holland, MI

Photo of a windmill against a bright blue sky, with a tree covered in cherry blossoms in the foreground. Image text reads, "$44,577 median rental revenue. $355,544 median listing price. 8.8% example cap rate."

Set on the shores of Lake Macatawa, Holland is a vibrant town where history and hospitality collide to create a charming small-town experience. It holds a timeless blend of culture, cuisine, and adventure, and guests can explore cobblestone streets lined with specialty shops, restaurants, and breweries. 

More famous than that, though, is Holland’s iconic Big Red Lighthouse and annual tulip festival — a beloved event that brings swarms of visitors each year. An aptly-named town, it’s also teeming with Dutch heritage, from Victorian architecture to delicacies like metworst

Top-performing vacation rentals here are kid-friendly, tend to have three bedrooms (perfect for families), and boast waterfront views. These types of properties have been known to bring in more than $83,000 annually for some Evolve owners — more than twice the market’s median revenue.

Investors should keep in mind that they (or a local contact) must be available 24/7 and live within 35 miles of their vacation rental property, as stipulated by the local government.

Image text reads, "The Evolve Difference: Our owners have earned up to $83,722 annually!"

Need a helping hand? Our experts connect business-savvy owners with local service partners to keep rentals running smoothly year-round.

3. Hocking Hills, OH

Photo of Hocking Hills with a rocky outcrop sticking out through colorful autumn trees. Image text reads, "$42,751 median rental revenue. $349,260 median listing price. 8.6% example cap rate."

With massive caves, rushing waterfalls, and staggering cliffs, the scenic region of Hocking Hills is a nature lover’s playground. This rural area in Southeastern Ohio is popular among travelers seeking a peaceful cabin getaway — making it a great place to buy a cabin, too. 

It’s no surprise, then, that homes outperforming Hocking Hills’ median rental revenue are cabins. But they also offer amenities like hot tubs, plenty of backyard space, and proximity to Hocking Hills State Park for easy adventuring. 

Our real estate experts recommend setting your sights on towns like Hamden, Amanda, and Logan to maximize profits. To simplify the selection process, local agents who specialize in vacation rental can help identify the exact area (and property!) that best suits your goals.

Image text reads, "The Evolve Difference: Our owners have earned up to $97,100 annually!"

Cozying up to a cabin investment? Brush up on what makes a cabin purchase profitable — along with when, where, and how to buy.

4. Palo Pinto, TX

Photo of a riverbank in Palo Pinto with red canoes in the foreground, a grassy shore across the water, and a forested hill in the distance. Image text reads, "$47,855 median rental revenue. $405,909 median listing price. 8.3% example cap rate."

Named for the nearby mountain range, Palo Pinto is a quaint rural community in Northern Texas with something fun to do for every type of traveler — including hiking, fossil hunting, or even getting spooked on a ghost tour.  

There’s even Palo Pinto State Park, the newest addition to Texas’ state park roster that’s expected to bring roughly 100,000 visitors to the area each year — most of whom need somewhere to stay. That gives interested investors a strong opportunity for bookings. 

Our experts say homes that rake in the highest earnings tend to offer a way for guests to embrace the outdoors while cooling off in the Texas heat. So look for properties that have pools, boat docks, or private beach access. From there, invest in amenities that will encourage a five-star review. Something as small as including recommended hiking trails in your welcome book can go a long way.

Image text reads, "The Evolve Difference: Our owners have earned up to $71,007 annually!"

5. Wisconsin Dells, WI

Photo of a massive, golden rocky cliff along the water of the Wisconsin Dells. Image text reads, "$36,104 median rental revenue. $307,846 median listing price. 8.2% example cap rate."

Wisconsin Dells is home to a variety of scenic attractions, outdoor activities, annual festivals, and family-friendly fun. It snagged the top spot on our list of best places to buy a vacation rental last year, and continues to be a fantastic location for investment. 

That said, listing prices are on the rise in the area while demand — though strong — remains relatively flat. This means cap rate (your annual net operating income divided by a property’s market value) has come down in the last 12 months. 

Of course, with a combination of competitive amenities and an expert revenue approach, investors can far outperform the market average here. Top-performing Evolve homes in the “Waterpark Capital of the World” often have three to six bedrooms to accommodate families. Smaller properties beat the average, too, when they offer water access.

Image text reads, "The Evolve Difference: Our owners have earned up to $112,367 annually!"

6. Savannah, GA

Photo of a tree-lined road in Savannah, GA, the branches meeting in the middle to create an arch. Image text reads, "$41,795 median rental revenue. $355,901 median listing price. 8.2% example cap rate."

Another returner to our best places to buy list, Savannah continues to be a solid market for real estate investors. Listing prices have increased in the last year, but so have occupancy and average daily rates — which our experts say indicates a rise in travel demand that owners can harness for maximum profit potential. And with plenty of available homes for sale, you’ll have options to suit a variety of budgets. 

As for location, Savannah’s Historic District is a major draw for travelers — where cobblestone streets are lined with Spanish moss, shaded parks, riverfront dining, and museums. Homes of all sizes can do well when located near downtown hotspots like Forsyth Park or City Market

The city offers epic nightlife, too, which is why big group celebrations like bachelorette parties are also ultra-common here. If you want to accommodate those guests, our experts recommend looking for a larger property (think five bedrooms). 

Quick note: vacation rentals in Savannah are subject to permitting and zoning restrictions, so it’s important for investors to connect with local agents who specialize in vacation rentals to make sure they understand their options ahead of a purchase.

Image text reads, "The Evolve Difference: Our owners have earned up to $72,804 annually!"

Jumpstart — or grow — your business with more ease when you explore homes for sale our experts already vetted for vacation rental potential.

7. Michigan City, IN

Photo of a rainbow sunset over the water in Michigan City, IN, with a shining lighthouse in the foreground. Image text reads, "$30,181 median rental revenue. $259,986 median listing price. 8.1% example cap rate."

Tucked along the shoreline of Lake Michigan, Michigan City welcomes millions of tourists each year who are eager to indulge in natural beauty, family-friendly attractions, waterfront activities, and popular events. Combine the demand for the city’s Great Lakes Grand Prix every summer, Festival of Lights each winter, and close proximity to Indian Dunes (a beachside national park) — and it’s easy to see the potential for multi-season bookings. 

Michigan City is also very vacation rental-friendly in regulation, making it simpler for investors to find success in the area. Case in point: many Evolve owners are earning more than triple the median annual revenue here. 

Standout rentals all boast some type of water access (whether it’s a private beach or access to a private/community pool) and tend to offer amenities that appeal to families, like a tricked-out game room and beach toys.

Image text reads, "The Evolve Difference: Our owners have earned up to $96,232 annually!"

8. Vernon Township, NJ

Photo of a wooden walking path winding through a golden field in Vernon Township, NJ, with orange autumn trees in the foreground. Image text reads, "$35,371 median rental revenue. $325,430 median listing price. 7.6% example cap rate."

Vernon Township is located about an hour’s drive from New York City, grabbing the interest of city-dwelling weekenders while also offering an easy Big Apple day trip for vacationers farther from home. 

But don’t be fooled: this Sussex County gem offers plenty of attractions all on its own, with Mountain Creek Ski Resort, a waterpark, and seven championship golf courses. Outdoor enthusiasts also visit from all over to explore Wawayanda State Park, Wallkill River National Wildlife Refuge, and a blissful 20-mile stretch of the Appalachian Trail. 

Known to have a number of highly-acclaimed B&Bs in operation, Vernon Township is already an established vacation destination among tourists seeking homier stays. This means short-term rental investors who take the right management approach could provide a strong alternative to crowded inns. In fact, top-performing Evolve owners in Vernon Township are taking home nearly $97,000 annually.

Image text reads, "The Evolve Difference: Our owners have earned up to $96,976 annually!"

9. Dover, VT

Wide shot photo of a lake in Dover, VT, with hills covered in red autumn trees jutting into the water. Image text reads, "$34,647 median rental revenue. $361,013 median listing price. 6.7% example cap rate."

Once again, Dover ranks on our list of best places to buy a vacation rental for its scenic beauty and abundance of year-round activities. Visitors leaf-peep in the fall, snowboard in the winter, and mountain bike in the summer — making this quaint Vermont town a terrific spot for consistent bookings and revenue.

Since last year, the cap rate has jumped from about 3.9% to 6.7%, boosting the opportunity for investors to maximize ROI. Our experts are seeing increased demand drive higher occupancy, daily rates, and revenue in this market — while median listing price has come down. And though the market has seen overall growth in revenue potential, top Evolve owners are still beating the average with over $84,000 a year.

These high-achieving homes are typically spacious (five to seven bedrooms) and located within a few miles of Mount Snow). Keep in mind that larger properties tend to come with steeper price tags, so it’s a matter of weighing your personal income and expense factors to make the best investment for you.

Image text reads, "The Evolve Difference: Our owners have earned up to $84,022 annually!"

If a ski property investment sounds right for you, there’s snow time like the present. Browse the best places to buy to find your ideal market.

10. Sevierville, TN

Wide shot photo of the town of Sevierville, TN, surrounded by green rolling hills. Image text reads, "$42,751 median rental revenue. $483,309 median listing price. 6.2% example cap rate."

Often referred to as the “Gateway to the Smokies,” Sevierville (alongside neighboring Gatlinburg and Pigeon Forge) is an ideal home base for a nature-lover’s vacation. But beyond proximity to Great Smoky Mountain National Park, the area gives visitors access to a variety of other fun activities. Dollywood, Douglas Lake, and Soaky Mountain Waterpark make for a well-rounded family getaway, while the area’s vibrant shopping scene, local golf course, and spas encourage adult relaxation.

Our experts say Sevierville, Gatlinburg, and Pigeon Forge all see comparable market potential, so interested Sevierville investors can expand their property search to include all three towns — increasing the chance to find a dream vacation rental.

Since travelers come to this area for the mountain vibes, cabin investments are high earners here. Family-friendly amenities (like game rooms) and luxe touches (like hot tubs, saunas, and fire pits) also contribute to Evolve owners making more than double the median rental revenue.

Image text reads, "The Evolve Difference: Our owners have earned up to $94,113 annually!"

11. Waldport, OR

Photo of the shoreline in Waldport, OR with a bridge in the distance crossing the water. Image text reads, "$44,358 median rental revenue. $549,575 median listing price. 5.6% example cap rate."

Overlooking Alsea Bay, the coastal town of Waldport is best known for its stunning scenery, a diverse array of wildlife, and outdoor recreation. From water activities like fishing and boating to land adventures like hiking and golfing, Waldport offers the best of both worlds.

While the median listing price is highest on our list of best places to buy a vacation rental, buyers will quickly find Waldport to be an affordable alternative to West Coast neighbors in California, Washington, and Hawaii

Plus, savvy owners can offset upfront costs with earning potential far beyond the market average when they operate strategically. Top-performers in Waldport bring in over $100,000 more than the median rental revenue with oceanfront or bayfront locations that offer epic water views. They also tend to be a bit cozier — many have just two bedrooms. 

And according to our real estate experts, 30% of bookings in the Western U.S. included pets, which is why the top-dollar earners here are also often pet-friendly. Catering to this traveler mindset is another great way to maximize your income.

Image text reads, "The Evolve Difference: Our owners have earned up to $161,172 annually!"

12. Fairbanks, AK

Aerial photo of the city of Fairbanks, AK with mountains in the distance and the yellow glow of sunset. Image text reads, "$26,267 median rental revenue. $343,237 median listing price. 5.4% example cap rate."

Between its awe-inspiring mountain ranges, crystal-clear bodies of water, and world-famous views of the Northern Lights, Fairbanks is a natural wonderland. While the “Golden Heart of Alaska” serves as a base camp for travelers visiting Denali National Park and the North Pole (no, not that one), there’s also plenty to do without leaving town. Visitors can check out a thriving local arts scene, for example, and experience popular Alaskan attractions like Pioneer Park.

Tourism in Alaska continues to grow, with a record number of hotel bookings in 2022. That makes now a great time to get in on the action by providing tourists with a strong alternative to current Fairbanks lodging options. 

Waterfront vacation rentals perform the best here, whether it’s a property overlooking a lake or a river. Other key factors to look for are proximity to Pioneer Park and a convenient commute downtown. It’s homes like these that have top Evolve owners earning nearly triple the median annual revenue.

Image text reads, "The Evolve Difference: Our owners have earned up to $76,594 annually!"

Buy the Perfect Vacation Rental with Evolve

Investing in a short-term rental property is a big decision, but you don’t have to navigate the process alone. Whether you’re drawn to a waterfront home on the West Coast or a cozy cabin in the South, our seasoned team of experts can help you take the next step toward buying in one of the best places to buy a vacation rental.

We have the data to inform your investment opportunities and define your income goals, preferred local real estate agents with expertise in vacation rental purchases, and helpful management tools to make your vacation house a success once you’re ready to kickstart your business.

For additional research, here are some resources to help you better understand the potential of vacation rental investment:

Now that you’re ready to talk about buying the best vacation rental for you, reach out to our team today.

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