The Best Places to Buy a Vacation Rental in 2024 (Top U.S. Markets for Investors)

The Evolve Team

October 10, 2023

Vacation rentals aren’t just a travel trend — they’ve become a preferred way to stay for millions of travelers worldwide. With 450 million global users, demand for short-term rentals continues to grow as guests seek space, comfort, and a true “home-away-from-home” experience.

That demand is also fueling interest from real estate investors. While competition has increased, the right market (paired with the right property and strategy) can still deliver strong returns.

To help narrow your search, our real estate experts analyzed short-term rental performance data across the U.S. The result: 12 of the best places to buy a vacation rental in 2024, based on revenue potential, home prices, and operating costs.

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 How We Chose the Best Vacation Rental Investment Markets

Our rankings are based on a combination of proprietary and public data, with a focus on three key factors:

Vacation rental performance: Booking demand and median annual revenue by destination

Home prices: Median listing prices using Zillow, Redfin, and internal data

Estimated expenses: Approximately 30% of total revenue, used to calculate cap rate

We also evaluated each market’s ability to outperform averages with an Evolve partnership. Throughout the list, you’ll see examples of how top-performing owners significantly exceed projected revenue.

Note: All projections reflect ideal-state scenarios. Owner use, blocked calendars, and unexpected events (such as natural disasters) are not included.

1. Finger Lakes, NY

Photo of a sunset over Finger Lakes, NY, one of the best places to buy a vacation rental, 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."

Known for its 11 scenic lakes, wine trails, and four-season appeal, the Finger Lakes consistently attract travelers from nearby cities like New York and Toronto.

Top-performing homes: Waterfront properties with family-friendly amenities and furnished decks or patios

Revenue upside: Some Evolve owners earn more than double the median annual revenue (up to $72,625)

Watch out for: Local zoning and permitting restrictions vary by town

This region is especially attractive for investors interested in lake house vacation rentals with year-round demand.

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."

Located on Lake Macatawa, Holland blends history, hospitality, and small-town charm, anchored by the iconic Big Red Lighthouse and annual tulip festival.

Best property type: Three-bedroom, family-friendly homes with water views

Top earnings: Some Evolve owners exceed $83,000 annually

Local requirement: A 24/7 local contact within 35 miles is required

3. Hocking Hills, OH

Photo of Hocking Hills, OH, 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."

A favorite for cabin getaways, the scenic surroundings of Hocking Hills draw nature-loving visitors with rushing waterfalls, massive caves, and staggering cliffs.

High-performing rentals: Cabins with hot tubs, backyard space, and easy access to Hocking Hills State Park

Recommended towns: Logan, Hamden, and Amanda

Evolve Advantage: Our owners have earned up to $97,100 annually

4. Palo Pinto, TX

Photo of a riverbank in Palo Pinto, TX, 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."

This North Texas destination benefits from the newly opened Palo Pinto State Park, expected to bring approximately 100,000 visitors annually.

Best amenities: Pools, docks, and private beach access

Widespread appeal: Activities for all types of travelers, including hiking, fossil hunting, and spooky ghost tours

Evolve advantage: Our owners have earned up to $71,007 annually

5. Wisconsin Dells, WI

Photo of a massive, rocky cliff along water in Wisconsin Dells, WI, one of the best places to buy a vacation rental. Image text reads, "$36,104 median rental revenue. $307,846 median listing price. 8.2% example cap rate."

Known as the “Waterpark Capital of the World,” Wisconsin Dells is a strong travel destination with a variety of scenic attractions, outdoor activities, annual festivals, and family-friendly fun.

Market trend: Rising listing prices have slightly lowered cap rates

Top homes: Three- to six-bedroom properties and smaller homes with water access

Opportunity: Strong upside with the right revenue strategy
- Evolve 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."

Savannah continues to deliver strong performance thanks to a famed Historic District and a thriving nightlife scene that’s perfect for bachelorette parties. rising occupancy and daily rates.

Profit potential: Prices have increased, but so have occupancy and average daily rates, indicating a rise in travel demand
- Evolve owners have earned up to $72,804 annually

Group demand: Large homes (five bedrooms or more) perform well

Important note: Vacation rentals are subject to permitting and zoning rules

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."

With Lake Michigan beaches, seasonal festivals and events, and investor-friendly regulations, Michigan City stands out for ease of entry.

High-traffic destination: Welcomes millions of tourists each year

Revenue potential: Some Evolve owners earn more than triple the median (up to $96,232 annually)

Best features: Water access, game rooms, family-focused amenities

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."

Just an hour from New York City with access to a 20-mile stretch of the Appalachian Trail, Vernon Township attracts weekenders and outdoor enthusiasts alike.

Year-round attractions: Mountain Creek Ski Resort, a waterpark, seven championship golf courses, Wawayanda State Park

Established market: Known for its highly acclaimed B&Bs; strong demand for home-style accommodations

Top earnings: Nearly $97,000 annually for top-performing Evolve owner

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."

Dover offers consistent, four-season demand near Mount Snow. Travelers leaf-peep in the fall, snowboard in the winter, and mountain bike in the summer.

Cap rate growth: Increased from ~3.9% to ~6.7% year over year, boosting the opportunity to maximize ROI

Top homes: Five- to seven-bedroom properties near the slopes

Investor consideration: Larger homes cost more but often earn more
- Evolve owners have earned up to $84,022 annually

10. Sevierville, TN

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

Often grouped with Gatlinburg and Pigeon Forge, Sevierville benefits from Smoky Mountain tourism, family attractions like Dollywood, and a vibrant shopping scene.

Best property type: Cabins are the highest earners, playing into the mountain vibes sought by travelers

High-earning features: Game rooms, hot tubs, fire pits, and saunas
- Evolve owners have earned up to $94,113 annually

Search tip: Expanding to nearby towns increases inventory options

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, Waldport offers oceanfront appeal at a lower price point than many West Coast markets. This scenic destination offers outdoor fun on both water and land, combining activities that range from fishing and boating to hiking and golfing.

Top performers: Two-bedroom waterfront homes

Revenue edge: Some Evolve owners earn over $100,000 above the median ($161,172 annually)

Bonus: Pet-friendly homes capture a growing share of demand
- Our data says 30% of bookings in the Western U.S. include pets

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."

Fairbanks is a natural wonderland, with awe-inspiring mountain ranges, crystal-clear bodies of water, and famous views of the Northern Lights. The “Golden Heart of Alaska” serves as a base for Denali National Park and features a thriving local arts scene.

Tourism trend: Alaska saw record hotel bookings in 2022

Best properties: Waterfront homes near downtown or Pioneer Park

Revenue potential: Top Evolve owners earn nearly triple the median ($76,594 annually)

Buy the Right Vacation Rental with Confidence

Investing in a short-term rental is a major decision, but you don’t have to navigate it alone. Whether you’re drawn to a beachfront escape, a mountain cabin, or a family-friendly lake house, our experts help you:

Clarify personal and financial goals

Understand market-specific earning potential

Connect with trusted local real estate agents

Manage your property to maximize income

Helpful Resources for Investors

Benefits of Investing in Vacation Rentals

Vacation Rental Market Analyses

Vacation Rental Income Calculator

With the right guidance, owning a vacation rental can be both profitable and rewarding. Connect with our team to take the first step toward investing in one of the best short-term rental markets in the U.S.