Lifestyle

The 10 markets with the highest returns on vacation rentals

  • Profitability on vacation rentals can vary significantly based on location. 
  • For investors looking to acquire new rental properties, vacation rental management platform Vacasa outlined the top markets with the greatest yearly rate of return. 
  • Georgia and North Carolina each had two towns make the list, with a Montana city taking first place. 
  • Visit Business Insider's homepage for more stories.

Smart investors know how important location is in selecting an investment property. 

And for investors looking to maximize their returns, some markets are better than others. 

In a new report from Vacasa, North America's largest vacation rental management platform ranks the top places to buy a vacation home in 2020 based on average cap rate, also known as yearly rate of return.

With over 25,000 vacation rentals under management, Vacasa's market data takes into account annual gross rental revenues in addition to median home values, and points to the most profitable locations for buyers to invest.

These are the 10 markets that came out on top. 

10. Blue Ridge, Georgia

Median home sale price: $291,595

Cap rate: 6.3%

9. Ellijay, Georgia

Median home sale price: $226,685

Cap rate: 6.4%

8. Palm Springs, California

Median home sale price: $459,857

Cap rate: 6.4%

7. Conway, New Hampshire

Median home sale price: $238,930

Cap rate: 6.5%

6. Corolla, North Carolina

Median home sale price: $560,599 

Cap rate: 6.9%

5. Dauphin Island, Alabama

Median home sale price: $289,623

Cap rate: 7.8%

4. Gatlinburg, Tennessee

Median home sale price: $269,523

Cap rate: 7.8%

3. Poconos, Pennsylvania

Median home sale price: $200,190

Cap rate: 8.2%

 

2. Cape Hatteras, North Carolina

Median home sale price: $379,248 

Cap rate: 8.6%

1. Big Sky, Montana

Median home sale price: $541,842 

Cap rate: 9.2%

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