A lake house escape is the kind of getaway that never goes out of style.
It’s no secret why: from lazy summer days on the water to cozy nights snuggled around a fire pit, lake trips make for a truly relaxing vacation.
That means there’s massive income opportunity for those interested in buying a lake house as an investment — and right now is a great time to get started. Trips to waterfront vacation rentals were the #1 vacation experience for travelers in 2022.
Before buying a lake house, though, it’s important to ask the right questions and familiarize yourself with the market. Here’s everything you need to know about making a smart and profitable lake property purchase.
Set yourself up for investment success by knowing the most important questions to ask when buying a lake property. The answers will guide your next steps on the road to putting in an offer.
It might be most important to enjoy your lake home with loved ones while covering expenses like a mortgage and upkeep, or you may decide that earning revenue is your top priority.
Whatever goal you establish upfront, making sure benefits outweigh costs is key. It’s also a good idea to gain a thorough understanding of the industry, especially if you’re new to vacation rental.
Once you’ve worked out the bigger picture, keep where you’re hoping to buy and that area’s cap rate (the key metric that sets expectations around return on investment) in mind, as these details factor into how easily you’ll achieve your goals.
Lake home list prices fall on a broad spectrum, and largely depend on the market you want to buy in. On average, lake houses in top locations can cost anywhere from about $250,000 to $650,000.
Proximity to the lakeshore is another factor here, but one with long-term trade-offs: our Real Estate Services (RES) team says vacation rentals right on the water come at higher price points, but can often earn higher rates and occupancy percentages.
On the flip side, purchasing a home set back from the lake can lower your upfront investment — and you may even save on additional costs that lakefront homes tend to require (like flood insurance, and maintenance repairs for weather-related wear and tear).
Regardless of which direction you go, our RES team says you should amp up the interior design and prioritize great amenities to give lake-loving travelers a reason to book your home over another.
The kind of lake house you buy doesn’t just come down to whether it’s lakefront or not. Think about the property type that’ll best suit your goals and markets of choice.
For example, you might have the budget for a sprawling, luxury home with enough room for large families — or you may decide that a cozier cottage better fits the bill. Cabins are another popular option, as this type of lake house tends to further boost the mood and scenery travelers are looking for when booking a lake house vacation.
From rustic a-frames to modern townhomes, evaluate the benefits and downsides of different property types to figure out how their construction might factor into your investment.
It can be easy to keep your main focus on the actual lake house you’re searching for, but it’s also important to take a closer look at the body of water it has access to.
If it offers sought-after recreational activities like power boating and water sports, find out where the closest marina or boat launch is to help you identify the most conveniently-located homes for sale. If you’re not right on the shore, it’s also helpful to note how easy it would be for guests to walk to the nearby lake.
Next, consider the surrounding area. Travelers want vacation to feel easy, so having grocery stores, shops, and restaurants nearby is a plus. If the town is well-suited for families or groups with pets, figure out how close local attractions (like amusement parks or dog-friendly cafes) are to the home you’re interested in — and if you really want to “wow” future guests, be sure to include details for getting to your favorite local treasures in the welcome book you provide.
Lastly, it’s important to confirm whether a lake house has reliable cell phone service and the ability for high-speed internet. Most vacationers want to unplug without losing access to the outside world, and some may even plan to work remotely. (If you’ve decided you want your lake house to be more off-the-grid, though, the right marketing and bonus touches can still grab guests’ attention.)
Peak months for lake house bookings are July and August, and while seasonality can impact occupancy in areas where summer is the only time for high demand, many lake properties have the potential to be profitable all year.
Our RES team recommends looking at regions with year-round activities to really maximize occupancy rates. A location with boating, hiking, leaf-peeping, and ice fishing, for instance, can capture the interest of different guests and result in more income.
If that all-season draw isn’t available in the places you really want to buy a lake house, our RES team suggests aiming for an area with at least two high seasons. (This tends to be spring and summer, or summer and fall.)
Of course, one really strong season can still offset booking lulls, since peak season rates are generally triple what off-season rates would be. It’s all about aligning with market expectation, and using a dynamic revenue management strategy to make sure you’re always priced competitively.
Winter months are the best time to buy a lake house, as our RES team says it leaves the most room in your timeline to make sure your property checks all the boxes for five-star guest stays before peak seasons hit. The home might require renovations or upgrades, new furnishings, or routine maintenance work, so you’ll need sufficient time to get your home in tip-top shape before listing it on top booking sites.
If your preparation starts too late — our RES team says to give yourself at least three months — you risk not getting in front of eager travelers in time for a wave of bookings. That means losing out to competitor listings who are ready and able to host guests, and missing the chance to earn money and trust-building five-star reviews.
That said, the best time to buy a lake house for you will ultimately come down to your personal goals and timeline. If your dream lake property happens to hit the market as summer approaches, don’t feel like you need to hesitate — just make sure your revenue expectations for that year are accurately managed in light of purchase timing.
From rural hideaways to traditional all-American lake towns, there are tons of options available all across the country when figuring out where to buy.
If you’re leaning toward an all-season rental, our RES team recommends narrowing your search to areas that provide more than just lakeside fun. Buying a lake house on Table Rock Lake, for example, puts your guests in the middle of Branson, a popular Missouri destination full of fun things to do year-round. Other options include the Poconos in Pennsylvania, Lake Havasu City in Arizona, and Granbury in Texas.
The question of where to buy a lake house also goes beyond the destination. As you explore homes in top markets, consider these other important features.
Buying a lake house with unobstructed views not only offers great scenery and the feeling of more private space, but our RES team says it can also significantly increase the value of the home. Consider investing in floor-to-ceiling or picture windows to put that view front and center. (And if you decide to pursue short-term rental with Evolve, your property will be professionally photographed to make sure that wow factor isn’t missed.)
When buying a lakefront property, look for homes with docks and boat slips, or make sure it’d be possible to install these perks to maximize your home’s potential. Providing recreational amenities like kayaks and paddle boards also helps guests enjoy a memorable at-home experience.
Since peak season typically happens during summer months, updated outdoor spaces are major selling points for potential guests. Adding top-requested amenities like a gas grill, comfortable outdoor seating, and a wood-burning fire pit can help you win bookings. Investing in a private hot tub can also drive success — searches for homes with private hot tubs are some of the most popular among Evolve travelers.
Our RES team says lake homes are often booked by families, so it’s important to have kid-friendly amenities available like cribs or entertainment systems.
Be sure to lean into the area’s general “traveler profile” (the primary age range or group type most often visiting) as well. Some lake locations might also attract older crowds or young couples, and catering to those guests can help give your property a competitive edge.
Even after learning the right questions to ask when buying a lake property and what to look for in a home, taking the next step can feel intimidating. Our Real Estate Services Team can help you:
Getting started doesn’t necessarily mean starting from scratch, either. You can browse our listings for sale to find Evolve properties with established vacation rental success in need of a new owner.
With waterfront getaways being a top trend for travelers, there’s no time to waste in making a lake house investment. Start a conversation with our RES team today for a tailored look at how we can help make buying a lake house nothing but smooth sailing.