The 12 Best Places to Buy a Vacation Rental in 2023

The Evolve Team
The Evolve Team
September 23, 2022

Even though the vacation rental industry changes all the time, one thing remains constant: the magic of travel. 

These days, travelers are prioritizing rural escapes and waterfront getaways above all else — so vacation rentals naturally top the list of ideal accommodations. And with inventory up for grabs, now is the time to make an investment. 

But where should you focus your property search to maximize profits?

From well-known vacation destinations in the Smoky Mountains to a Pacific Northwest up-and-comer fit for nature enthusiasts, these 12 locations are the best places to buy a vacation rental in 2023.

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 2022 median home value to identify listing price
  • 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 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. Wisconsin Dells, WI

Image of a vacation rental home in Wisconsin Dells, Wisconsin with a graphic overlay depicting the median revenue, average home price and the cap rate percentage

For generations, Wisconsin Dells — known as the “Waterpark Capital of the World” — has attracted tourists looking for action-packed, family-friendly fun. An easy getaway for Midwesterners, the Dells boasts scenic river bluffs, hikes, boat cruises, live entertainment and, of course, slides and rides.

An exciting newcomer to our best places to buy a vacation rental list, Wisconsin Dells snags the top spot because its traveler draw and general affordability (median home prices sit around $230,000) can translate to strong profit potential for investors. And with the relatively-low cost threshold for entry, it’s also an approachable option for first-timers.

List prices can climb above the median for more spacious properties (think 4+ bedrooms) that families tend to book, but the investment can pay off quickly given the area’s 12.9% cap rate — which is the ratio between a property’s net income and its market value, and a key indicator for return on investment. 

If you opt for a smaller home, our Real Estate Services (RES) team says catering to families with kid-friendly amenities and maximizing the space with bunk beds and futons can still help any Wisconsin Dells rental shine.

Graphic stating The Evolve Difference, Our owners have earned up to $63,631 annually

2. Lead, SD

Image of a vacation rental home in Lead, South Dakota with a graphic overlay depicting the median revenue, average home price and the cap rate percentage

From the presidential portraits of Mount Rushmore to the deep blue lakes and otherworldly caves of the Black Hills, Lead gives visitors a fun mix of natural and manmade wonder. 

The area’s list of things to do is an added benefit to investors, because travelers don’t fit any one type. As a result, two-, three-, and four-bedroom properties all see great performance here — meaning buyers can broaden their property search or limit their budget and still have the potential to achieve strong returns. 

Case in point: Evolve’s top performers in Lead run the gamut in property size, but earn nearly double the median revenue. 

Our RES team says A-frame cabins are especially popular in this area, and often outperform the market. Homes close to Terry Peak Ski Area — as well as those that have sought-after amenities like wraparound decks, fire pits, and hot tubs — also earn more.

Graphic stating The Evolve Difference, Our owners have earned up to $79,687 annually

3. Gatlinburg, TN

Image of a vacation rental home in Gatlinburg, Tennessee with a graphic overlay depicting the median revenue, average home price and the cap rate percentage

Gatlinburg is a gateway to the Great Smoky Mountains, one of the country’s most popular national parks. With epic whitewater rafting and spectacular fall foliage, plus storied holiday traditions and plenty of attractions in town, Gatlinburg is ideal for investors who want year-round bookings in a tourist-heavy area.

From cozy to luxe, cabin investments do especially well in Gatlinburg. To help your listing stand out, our RES team recommends zeroing in on four- or five-bedroom cabins that offer great views, spacious decks, and the option to have a hot tub or create a game room. 

Note that larger, luxury homes do come with price tags well above Gatlinburg’s median list price. But if your budget allows, you could be in for an especially lucrative investment opportunity. Some of the most successful investors in the area are making nearly $80,000 annually — twice the market median — when they opt to include those five-star perks.

If you can’t quite find your just-right vacation rental in Gatlinburg, our RES team recommends expanding your property search to neighboring Sevierville and Pigeon Forge. Cabins are in equally-high demand in these towns, and investors will find comparable price points and profit returns. Plus, all three are great home bases for welcoming the 14.1 million tourists who visit the Smokies every year.

Graphic stating The Evolve Difference, Our owners have earned up to $79,750 annually

Smitten with the idea of a cabin investment? Check out all the best places to scoop up property to see how they stack up.

4. Windham, NY

Image of a vacation rental home in Windham, New York with a graphic overlay depicting the median revenue, average home price and the cap rate percentage

With a historic downtown, stellar skiing, wine bars, and art galleries, it’s easy to see why Windham is nicknamed the “gem of the Catskills.” This mountain town caters to New Yorkers and other East Coast travelers looking for a sophisticated, close-to-home escape.

That makes Windham a gem for investors, too. Median prices come in under the $300,000 mark, and while that figure escalates with square footage and added amenities, Catskills buyers could find a good deal compared to higher-dollar real estate in the Hudson Valley or Hamptons.

Our RES team says top-performing properties in Windham have at least four to five bedrooms, come with hot tubs, and are close to the slopes at Windham Mountain. Fire pits, decks with views, and fitness rooms will also help your listing gain attention and rack up five-star reviews.

Graphic stating The Evolve Difference, Our owners have earned up to $100,146 annually

5. Savannah, GA

Image of a vacation rental home in Savannah, Georgia with a graphic overlay depicting the median revenue, average home price and the cap rate percentage

Historic squares draped with Spanish moss. A hospitable food scene with locally caught seafood dishes. Beautiful architecture and treasure-filled antique shops. Could a city get any more charming than Savannah

Those coming to vacation are looking for a stay that reflects Savannah’s brand of Southern hospitality, and investors have lots of routes to success. That’s because top-performing properties don’t fit into any one box. They range from two- to four-bedroom homes, and some have luxe perks (like a riverfront location with a private dock or a pool) while others generate massive interest with historic charm and downtown proximity. 

What’s more: with a cap rate of 9%, median home prices under $280,000, and lots of available inventory, Savannah sits right in that sweet spot between market affordability and strong profit potential.

Graphic stating The Evolve Difference, Our owners have earned up to $67,432 annually

6. Bryson City, NC

Image of a vacation rental home in Bryson City, North Carolina with a graphic overlay depicting the median revenue, average home price and the cap rate percentage

While other towns bordering the Great Smoky Mountains tend to cater most to tourists, Bryson City distinguishes itself as a peaceful retreat with fewer manmade attractions. Hikes along the Appalachian Trail and whitewater rafting on the Tuckasegee River beckon solo travelers, couples, and nature-loving families looking for some calm. 

It’s no surprise, then, that even the quaintest properties hold major appeal for travelers. Our RES team says rustic one-bedrooms fare especially well in this North Carolina market — which means investors can really minimize upfront costs without missing out on strong returns. 

That said, larger homes are just as profit-driving here, and they can earn the biggest returns on investment with the right amenities in place. If that’s more your style, look for homes with wraparound decks, screened-in porches, hot tubs, and wood-burning fireplaces to make sure you’re hitting the mark with guests.

Graphic stating The Evolve Difference, Our owners have earned up to $59,353 annually

7. The Poconos, PA

Image of a vacation rental home in The Poconos, Pennsylvania with a graphic overlay depicting the median revenue, average home price and the cap rate percentage

Freshwater lakes, waterfalls, forests, and ski slopes — the Poconos are one of those magical places that truly has it all. And with things to do in every season, the area easily earns its stripes as one of the best places to buy a vacation rental.

When searching for properties in this area, our RES team recommends looking in Tobyhanna, Lake Harmony, and Pocono Lake, as they’re all vacation rental-friendly and have similar income potential. On the flip side, investors should avoid Tobyhanna Township. It’s a separate entity from Tobyhanna proper, and it has a current ban in place on vacation rentals. 

While the median home price in the area hovers around the $275,000 mark, our RES team says splurging on a larger property in a prime location can earn some big rewards. Evolve’s top-performing homes are raking in triple the median income here, and they all have five to six bedrooms, attention-grabbing amenities like hot tubs and fire pits, and proximity to local attractions (like a lakefront or ski area). 

Graphic stating The Evolve Difference, Our owners have earned up to $75,816 annually

8. Branson, MO

Image of a vacation rental home in Branson, Missouri with a graphic overlay depicting the median revenue, average home price and the cap rate percentage

From paddleboarding on Table Rock Lake to exploring the foothills of the Ozarks aboard the Branson Scenic Railway (and catching a live dinner show in between), there’s so much to do in Branson.

As an established family-friendly vacation destination with a community of loyal visitors, investors can earn steady bookings from repeat guests who return year after year.  

Investors who want to dive right into the action can find ample inventory in Branson, where median home prices are modestly priced around $237,000. But if you’re willing to up the budget, our RES team says you’ll find increased income potential with a lake house investment right on Table Rock — where 8,000 miles of shoreline earn the attention of nature-lovers and families alike. (As you might imagine, Branson commands a spot on our list of best places to buy a lake house, too.)

Wherever you decide to put down your vacation rental’s roots, Branson properties do best when they offer an easy commute to the local scene and are outfitted for kid-friendly fun.

Graphic stating The Evolve Difference, Our owners have earned up to $53,432 annually

Does a lake house investment float your boat? Explore the best places to buy this year to zero in on your ideal market.

9. Granbury, TX

Image of a vacation rental near the lake of Granbury, Texas with a graphic overlay displaying the area's median rental revenue, median listing price and example cap rate

In the heart of the Lone Star State — and about an hour from Fort Worth and DallasGranbury is a much-loved and laid-back escape. A historic town square, hiking and biking trails, and water fun on Lake Granbury bring outdoor adventurers and urbanites to the area year-round, so investors can see consistent booking opportunities and strong rental income potential.

As a vacation favorite for families in particular, homes with three or more bedrooms tend to perform strongly in this small town. And while prices might rise with square footage in other best places to buy, the Granbury market is different: many of the homes for sale with three or more bedrooms sit at (or even below) the area’s median list price of $395,000 — which makes it even easier to find top-performing options at approachable price points.

Of course, property size isn’t the only factor at play for high-earning vacation rentals. Homes set right on Lake Granbury do exceptionally well in the area, especially if they offer lucrative lakefront amenities like boat docks and kayaks. It’s why Granbury also earned a highlight on our best places to buy a lake house list, and how some Evolve owners have made nearly $49,000 more in annual revenue than the market average.

Graphic with Evolve logo displaying "The Evolve Difference; Our owners have earned up to $76,891 annually!"

10. Ruidoso, NM

Image of a vacation rental home in Ruidoso, New Mexico with a graphic overlay depicting the median revenue, average home price and the cap rate percentage

Snuggled in the Sierra Blanca mountain range, Ruidoso fully embodies New Mexico’s state motto as a “Land of Enchantment.” This storybook-worthy locale mixes stunning natural landscapes of alpines and waterfalls with charming boutiques and artful architecture. 

So while Ruidoso doesn’t have the same name recognition of Santa Fe or Albuquerque, it strikes a perfect balance between mountain adventure and downtown fun. For investors, that means there’s no time like the present to scoop up property in the area — when it’s still under the radar and median home prices hover around $275,000. 

With top attractions like the Ski Apache resort, Lincoln National Forest, and White Sands National Park, Ruidoso travelers are undoubtedly seeking escapes into nature. As a result, our RES team says the vacation rentals that perform best here are cabins with hot tubs and well-maintained outdoor spaces with panoramic views.

These rentals also tend to have four to six bedrooms, so look for larger properties to really maximize profit. The right home and amenity combination can have some epic results: our top-earners in the area make more than three times the market average by hitting all the right notes.

Graphic stating The Evolve Difference, Our owners have earned up to $61,016 annually

When considering a beach house investment, check out the best places to buy to anchor your market search.

11. Dover, VT

Image of a vacation rental home in Dover, Vermont with a graphic overlay depicting the median revenue, average home price and the cap rate percentage

A mountain town with classic New England charm, Dover has a little something for everyone. Hikers trek to the area during warmer months, leaf peepers come to see the striking fall foliage, and powder hounds flock to play in famed Vermont snow each winter. 

As a year-round destination for outdoors lovers, honeymooners, and active families, investors who find the right property in Dover can optimize their annual occupancy goals and maximize profits with bookings that aren’t tied to a single season.

But like much of New England, homes in Dover do come with a higher price tag; median listing prices are around $450,000, and it’s common to see that price point shoot up for spacious properties within a few miles of the Mount Snow slopes. 

That said, our RES team notes cabins and ski properties are in high demand among Dover travelers, and could be key to help buyers recoup their costs. With savvy investment strategies, Evolve owners with cabins close to Mount Snow are clearing $91,000 a year in revenue — triple the median income in the area. Luxe features like picturesque mountain views, game rooms, and cozy fireplaces all add more value for travelers and boost income potential, too.

Graphic stating The Evolve Difference, Our owners have earned up to $91,620 annually

If the idea of a ski property investment peaks your interest, browse the best places to buy a ski property and carve your path to vacation rental success.

12. Cle Elum, WA

Image of a vacation rental home in Cle Elum, Washington with a graphic overlay depicting the median revenue, average home price and the cap rate percentage

Located in the heart of the Cascades, travelers who discover Cle Elum may feel as though they’ve stumbled upon one of the Pacific Northwest’s best-kept secrets. 

A former mining town about an hour from Seattle, Cle Elum is a haven for outdoor adventure. Hundreds of miles of trails fit for hiking, biking, and horseback riding wind around Teanaway Community Forest and Lookout Mountain — plus Mount Rainier National Park is only a two-hour drive away.

While Cle Elum’s cap rate appears more modest than other destinations topping our list of best places to buy a vacation rental, buyers who invest in the right types of property can see sizable profits early on. In fact, some Evolve owners have earned six figures (compared to a median revenue of nearly $37,000) when their vacation rentals deliver on travel wishlists. 

Our RES team says these top-performers are five- to eight-bedroom properties with hot tubs, fire pits, and Pacific Ocean views. The median list price here is high — skimming $700,000 — so investors unable to swing an extra-large property investment can also boost guest capacity by adding bunks beds and pull-out couches to three- or four-bedroom alternatives. 

Note that while there is a permitting fee vacation rental owners need to factor into upfront costs, our RES team says the process is seamless and shouldn’t dissuade buyers keen on this up-and-coming location.

Graphic stating The Evolve Difference, Our owners have earned up to $104,369 annually

Buy Your Best Vacation Rental with Evolve

Investing in property is a personal decision, but you don’t have to navigate the best places to buy a vacation rental alone. Whether you’re drawn to one of our tried-and-true hotspots or enticed by the 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.

For additional research, here are some 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.

Note: This list was modified on October 24th, 2022, removing Cape Coral as a result of Hurricane Ian impacts.

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