The 12 Best Places to Buy a Vacation Rental in 2022

The Evolve Team
The Evolve Team
October 20, 2021

It’s official: travel is back, and there’s a lot of pent-up demand for epic vacations. In fact, Google data hints that the desire to travel is higher than ever, as people have searched for phrases like “rental near…” more than twice as much as they did over the past year. 

What’s more: many travelers are showing specific interest in the great outdoors, and they want access to amenities like kayaks, bikes, even boats — things that vacation rentals are best-suited to offer.

All of this indicates now is the prime time to buy a vacation rental. After all, the industry is on pace to grow into a nearly $63 billion space over the next few years.

So if you’re thinking about investing in a vacation home, the next step is knowing which areas offer the best returns on that investment. From an energetic mountain town in Tennessee that neighbors the country’s most-visited national park, to a lesser-known (for now) seaside escape in south Texas, here are the 12 best places to buy a vacation rental in 2022.

How We Chose the Best Places to Buy an Investment Property

The By the Numbers data below is based on a combination of proprietary and public data, but the three main metrics we took into account are:

  • Vacation rental performance metrics across the U.S. to learn where bookings lead to higher median revenue

  • Zillow’s 2021 median home value to identify listing prices

  • Estimated yearly expenses to run a vacation rental (approximately 30% of total revenue) to help calculate cap rate

We also evaluated a property’s potential to outperform market expectations with an Evolve partnership. Below, you’ll see The Evolve Difference, showcasing how we helped some of our top owners maximize income in each area, resulting in them significantly surpassing the market’s projected revenue.

1. The Poconos, Pennsylvania

Graphic showing The Poconos, Pennsylvania median rental revenue, listing price, and cap rate with a picture of a house in the woods.

For the fourth year in a row, the Poconos tops our list as the best place to buy a vacation rental. Also commanding the number one spot on our list of best places to buy a lake house, this mountainous, lake-dotted region in northeast Pennsylvania holds a consistent draw for East Coast urbanites looking to slip away for a vacation in nature. 

The Poconos have plenty of year-round adventures for families and outdoors lovers alike, from hiking to Bushkill Falls (known as the “The Niagara of Pennsylvania”) and water sports to skiing, snowboarding, and snow tubing. Plus, the Poconos boast small-town charm throughout vacation rental-friendly towns like Tobyhanna, Pocono Lake, and Albrightsville.

The caveat: because of the area’s consistent popularity, our Real Estate Services (RES) team says homes don’t stay on the market long and regularly sell over their list price, especially in and around Lake Harmony. 

For this reason, the Poconos is best for investment-focused buyers who have enough cash available to make offers on homes within one to three days of the property being listed. Still, with a potential 14.7% cap rate — the ratio between the property’s net income and its market value, and a key measure of success — you should be able to recoup your investments and start earning profit more quickly.

Graphic of The Evolve Difference in The Poconos, Pennsylvania showcasing how much vacation rental owners can earn in the area

2. McGaheysville, Virginia

Graphic showing McGaheysville, Virginia median rental revenue, listing price, and cap rate with a picture of a white house with spruce trees and exterior lights on.

McGaheysville is a small Virginia community that falls into the “hidden gem” category. The area is a gateway to Shenandoah National Park, which includes a stretch of the famed Appalachian Trail, fields of wildflowers, and cascading waterfalls. Travelers come to the area for both summer and winter recreation, which means vacation rental owners will have two busy seasons to help them hit their occupancy goals.

Our RES team notes that McGaheysville’s proximity to Massanutten Resort is a major draw to the region, attracting travelers who want a cozy ski property to serve as their home base. Amenities like fire pits, hot tubs, and thoughtful winter extras (think sleds, warm blankets, and hot chocolate) are all important amenities for mountain properties that can help you rack up five-star reviews in this area.

Bonus: while McGaheysville median revenue is nearly $49,000 a year, we’ve seen some Evolve owners bring in almost $113,000 during the same period.

Graphic of The Evolve Difference in McGayehsville, Virginia showcasing how much vacation rental owners can earn in the area

3. Sevierville, Tennessee

Graphic showing Sevierville, Tennessee median rental revenue, listing price, and cap rate with a picture of a an elevated log cabin with wrap-around deck.

The Great Smoky Mountains are considered part of Sevierville’s backyard. So those who buy a vacation rental in this area are well-positioned to hit their occupancy goals, thanks to the 12.1 million visitors who flock to the national park annually.

Along with the spectacular shows Mother Nature creates here (we’re talking breathtaking fall foliage and synchronous fireflies), the region has dozens of sought-after tourist attractions, from Ripley museums and mini golf to a mountain coaster and Dollywood.

Spacious cabins tend to perform best in Sevierville, and while the median annual revenue for vacation rental owners hovers around $51,000 a year, we’ve seen some Evolve owners earn almost triple that during the same period.

Oh, and if you’re not finding the just-right property in Sevierville, it’s easy to expand your search to nearby Gatlinburg and Pigeon Forge. Both are still considered some of the best places to buy a vacation rental, as our RES team says all three markets — and their successes — overlap pretty heavily.

Graphic of The Evolve Difference in Sevierville, Tennessee showcasing how much vacation rental owners can earn in the area

4. Bryson City, North Carolina

Graphic showing Bryson City, North Carolina median rental revenue, listing price, and cap rate with a picture of a log cabin near a creek in the woods.

Small-town charm meets laidback mountain vibes in Bryson City, a place that still feels a bit undiscovered. This North Carolina neighbor to the Great Smoky Mountains is a quieter alternative to Sevierville and other Eastern Tennessee hotspots that border the tourist-heavy national park.

With a population of just 1,300, Bryson City has an arts-centric, walkable downtown with local bookstores, murals, galleries, and breweries. The Tuckasegee River also cuts through downtown, and is a spot to kayak, paddleboard, or fly fish.

The average listing price for homes in Bryson City sits right around $195,000, making it an ideal consideration for new vacation rental investors. Plus, our RES team says smaller cabins have the potential to perform well here, which means homebuyers can turn a hideaway cabin into a short-term rental gem.

If inventory is limited in Bryson City, our RES team also recommends checking out nearby Maggie Valley, a special spot where the Smoky and Blue Ridge Mountains meet.

Graphic of The Evolve Difference in Bryson City, North Carolina showcasing how much vacation rental owners can earn in the area

5. Surfside Beach, Texas

Graphic showing Surfside Beach, Texas median rental revenue, listing price, and cap rate with a picture of a rental property with deck and palm trees.

Not only is Surfside Beach high on our overall list of best places to buy a vacation rental in 2022, but this small town between the Gulf of Mexico and the Intracoastal Waterway also holds the top spot for best places to buy a beach house

It’s easy to see why so many love to slip away to this seaside village: surfing (or boogie boarding), fishing, birdwatching, and enjoying fresh seafood are among the many ways to spend vacation days in this affordable destination.

As you’re scouting homes in Surfside Beach, our RES team says to keep in mind that travelers coming to this area look for convenient beach access and nearby restaurants. Family-friendly stays are also popular here, so buyers should look for ways to maximize the number of people their rentals can accommodate.

Graphic of The Evolve Difference in Surfside Beach, Texas showcasing how much vacation rental owners can earn in the area

6. Branson, Missouri

Graphic showing Branson, Missouri median rental revenue, listing price, and cap rate with a picture of a wood and brick house with green hedges.

Vacation rentals are highly sought after in Branson, a well-known family vacation destination in the midwest.

Brimming with plenty of things to do, Branson is one of those destinations that can suit just about every type of traveler. Nature lovers enjoy exploring the scenic Ozark Mountains or touring caves, while families can visit Silver Dollar City amusement park or Dolly Parton’s Stampede dinner show.

With the median home price just under $180,000 and a potential 8.4% cap rate, Branson can be a great place to break into the investment market — and it’s the most affordable spot on our list of best places to buy a vacation rental in 2022.

That said, Branson is another destination where homes with a higher room count can nab the most bookings, according to our RES team. Those bigger properties are usually more expensive than the median list price, but could translate to more earning potential, an important consideration when navigating this market.

Graphic of The Evolve Difference in Branson, Missouri showcasing how much vacation rental owners can earn in the area

7. Waldport, Oregon

Graphic showing Waldport, Oregon median rental revenue, listing price, and cap rate with a picture of homes with porches and sunset views.

Located along the central coast of Oregon, travelers who visit Waldport may feel as though they’ve stumbled upon one of the Pacific Northwest’s best-kept secrets. It’s the perfect place for out-of-towners to sample all the best Oregon has to offer, from whale watching and exploring the rolling sand dunes to hiking in the moody coastal mountains.

While median annual revenue sits just over $41,000, some Evolve owners have earned upward of $77,000 in that time. To make your vacation rental property shine — and turn first-time visitors into repeaters — add nature-centric amenities like trail maps, binoculars, and birding guides (there are more than 400 species in the area) to your home.

Graphic of The Evolve Difference in Waldport, Oregon showcasing how much vacation rental owners can earn in the area

8. North Conway, New Hampshire

Graphic showing North Conway, New Hampshire median rental revenue, listing price, and cap rate with a picture of a log house with retaining wall and deck.

With nearly 13 nearby ski areas, North Conway is a beloved ski village in New England. This New Hampshire locale is in the heart of the White Mountains region, making it a year-round magnet for nature-seekers who come to swoosh down the slopes, hike, golf, fish, and enjoy some of the country’s best leaf peeping.

All of this makes North Conway a prime spot for vacation rental owners who want to provide a home base for outdoorsy, family-friendly, or group travelers. It’s even ideal for urban travelers, like those coming from Boston, who crave a private, luxurious vacation

That said, when looking to buy in this area, our RES team says to keep an eye out for vacation homes that sit close to the slopes or have luxury amenities, like fireplaces and hot tubs.

Graphic of The Evolve Difference in North Conway, New Hampshire showcasing how much vacation rental owners can earn in the area

9. Ruidoso, New Mexico

Graphic showing Ruidoso, New Mexico median rental revenue, listing price, and cap rate with a picture of a log cabin with lush trees.

With a good mix of mountain-town magic and Southwestern style, Ruidoso is a repeat feature on our annual best places to buy list. This enchanting city in New Mexico is cradled by the Sierra Blanca mountains, making it a draw for snow-seekers who come for ski vacations.

Beyond winter adventures, though, Ruidoso has all the makings for a fun vacation no matter the traveler. Activities include casinos, historical sites, and White Sands National Park, a 275-square mile sandbox composed of shimmery gypsum crystals.

The median annual Ruidoso revenue hovers around $22,000, but some Evolve owners make closer to $68,000 a year. Hot tubs, spacious decks with mountain views, and game rooms all add value to secluded cabins here, helping your property snag attention from eager vacationers.

Graphic of The Evolve Difference in Ruidoso, New Mexico showcasing how much vacation rental owners can earn in the area

10. Windham, New York

Graphic showing Windham, New York median rental revenue, listing price, and cap rate with a picture of a white house and trees

Windham is known as the “gem of the Catskills” thanks to its unparalleled outdoor recreation and abundance of wine bars, art galleries, and fine dining restaurants. Less than three hours north of New York City, our RES team says Windham is high on the list for those who want to escape the Big Apple and enjoy a luxe retreat in the mountains year-round.

The median list price here is under $500,000, which is competitive when you stack it next to other upstate locations like the Hudson Valley (where median home values can be a couple hundred thousand more), or beachfront options like the Hamptons (where you’re looking at a median sale price of $1.2 million). And with a cap rate of 7.1%, Windham sits right in that sweet spot of providing an affordable escape into nature while helping you get a strong return on investment.

Graphic of The Evolve Difference in Windham, New York showcasing how much vacation rental owners can earn in the area

11. Gulf Shores, Alabama

Graphic showing Gulf Shores, Alabama median rental revenue, listing price, and cap rate with a picture of a condo complex with pool.

Fine quartz grains washed down from the Appalachian Mountains thousands of years ago, giving way to the powdery-soft white sand beaches that are so popular along this coveted stretch of Alabama coastline.

Gulf Shores is a popular spot for family vacations, and there’s plenty to do both on and off the beach, including sunset dolphin cruises, deep sea fishing, and golfing at Kiva Dunes.

For the uninitiated, Gulf Shores (which also made our list of best places to buy a beach house) seamlessly runs into the bordering beach town Orange Beach and, combined, this vacation rental-friendly region boasts 32 miles of pretty beaches.

With all that shoreline, oceanfront condos — and those right off the water — are in high demand in Gulf Shores and Orange Beach, and our RES team notes that inventory is pretty tight in these communities. Working with a knowledgeable realtor who specializes in the area can help you understand HOA regulations and find properties with amenities that your guests will love.

Graphic of The Evolve Difference in Gulf Shores, Alabama showcasing how much vacation rental owners can earn in the area

12. Pinetop-Lakeside, Arizona

Graphic showing Pinetop-Lakeside, Arizona median rental revenue, listing price, and cap rate with a picture of a log cabin in the woods with tall pine trees.

As an alternative to the desert landscape, Pinetop-Lakeside tends to surprise Arizona travelers with its expanse of Ponderosa pines, as well as its snowy winters and not-too-hot summers.

And unlike other Arizona destinations (like Sedona, Scottsdale, or Flagstaff), the Pinetop-Lakeside area is lesser-known. Visitors will find plenty to do here, with dozens of lakes and 200 miles of scenic multi-use trails to explore, along with family-friendly activities like miniature golf and arcade games. 

With a diversified economy that’s not entirely hinged on tourism, the region has a strong real estate market for any property type, according to our RES team. As a whole, Arizona is also a great state to buy a vacation home in because it’s free from a lot of regulations, and visitors come to the sunny state year-round.

When looking for a vacation rental in the Pinetop-Lakeside area, our RES team says cabin-style retreats with a rustic feel and modern amenities tend to fare best in this market. Renters often look for spacious homes too, so if you can swing it, properties with at least three bedrooms will help you best meet your booking goals.

Graphic of The Evolve Difference in Pinetop-Lakeside, Arizona showcasing how much vacation rental owners can earn in the area

Take the Next Step with Evolve

Investing in a vacation rental property is a personal decision, but you don’t have to navigate your options alone. Whether you’re drawn to one of our tried-and-true hotspots or enticed by the untapped potential of an up-and-comer, our Real Estate Services (RES) team can help you take the next step.

We have the data to help identify your investment opportunities and financial goals, preferred local real estate agents who specialize in vacation rental purchases, and a team of experts available to manage your property once you’ve closed on your vacation home and are ready to jumpstart your business.

Here are additional resources to help you better understand the potential of vacation rental investment:

For exclusive historical insights on top vacation rental markets, you can also download our free Best Places to Buy resource below.

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