10 Best Places To Buy Vacation Rental Property in 2023

Aristotle Kumpis RealWealth Investment Counselor

Aristotle Kumpis

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We get it—you deserve a break, and what better way than owning real estate in one of the best places to buy vacation rental property in 2023. Not only are these destinations great for your investment portfolio, they’re also great places to relax when they aren’t booked with your renters.

Why buy vacation rental property today? Because the market is booming. Airbnb had its most profitable quarter ever in Q3 2021, with a net income 4x larger than in 2020.

So if you’re thinking about investing in a vacation home, we’ve got your back. Using short term rental from our friends at Mashvisor and Zillow, along with expert information from the Property Teams we work with at RealWealth, here are the best places to buy a vacation rental property in 2023.

You may also like: 22 Best Places To Buy Rental Property for Cash Flow & Appreciation

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Best Places to Buy Vacation Rental Property Right Now

In real estate, location is everything. So for your short-term vacation rental investment, you’re not just looking for a cozy getaway, but also a place that has enough short-term rental demand and can yield a good return on your investment.

For each city on this list, we looked at cap rates and cash on cash returns using Mashvisor. We also looked at current 2023 prices from Zillow, and the number of tourists that visit the city per year.

You can calculate Cap Rates by dividing your Net Operating Income (NOI), or Rent minus Expenses, by the market value of a property. Cash on Cash is calculated by dividing the annual cash flow generated by the property by the amount of mortgage principal paid during the same period.

1. Orlando, Florida

Orlando, Florida is one of the best places to buy vacation rental property today, because it’s a unique city with a lot of opportunity for investment. It’s warm, it’s sunny, and it’s filled with incredible restaurants and entertainment options. And it’s also one of the best places to buy vacation rental property.

Orlando is an extraordinary city—a place unlike any other in the United States. It’s more than just a summer destination—it’s a year-round family vacation spot with golf courses, amusement parks, lakes and restaurants.

You’ll have your pick of investment opportunities if you’re planning to buy property in Orlando. With the exception of a few communities, the majority of the land south and west of Walt Disney property as far west as 27th Street is zoned for short-term rental. So if you’re looking for a place to make money (that makes you feel like you’re on vacation every time you visit), Orlando may be what you’re looking for!

A seasoned Realtor who specializes in vacation home property will be able to advise you about the rules and regulations that pertain to short-term rental properties in Orlando.

Why We Chose It

Orlando, Florida is a city that’s always been on the rise. From humble beginnings as a small town with fewer than 1,000 residents in 1875, Orlando has grown into one of the most popular tourist destinations in the world. Here are just a few reasons why it’s such an attractive place to live:

  1. The local economy is strong despite the COVID-19 pandemic. The number of new jobs increased by 3.9% year-over-year in 2021.
  2. Orlando is home to many fast-growing industries like health care, tech, and tourism that continue to attract businesses and residents alike.
  3. Year-round mild weather has long been a strong draw for tourists and residents alike.
  4. In 2021, Orlando had 5.77 million total enplanements from both domestic and international visitors, an increase of 114.7% YOY.
  5. The median home value in Orlando is $383,026 (up 32.3% over last year).
Orlando, Fl Statistics

Traditional rental properties:

  • Cash on cash return: 2.66%
  • Cap rate: 4.69%
  • Occupancy rate: 94%
  • Average rental income per month: $1,855

AirBnB rental properties:

  • Cash on cash return: 3.58%
  • Cap rate: 5.14%
  • Occupancy rate: 54%
  • Average rental income per month: $2,983

2. Tampa, Florida

You don’t have to be a Florida native to know that Tampa is one of the best places to visit in the country. It’s also a hot spot for vacation rental properties.

The city has long been popular with tourists, but now it’s attracting investors too. In 2019, Tampa ranked among the 10 best places to invest in real estate in PwC’s Emerging Trends in Real Estate Report.

The Tampa-St Petersburg metro area’s economy is worth over $130 billion. It is the second fastest growing metro area in Florida, and four Fortune 500 companies call it home.

The good news for Airbnb hosts in Tampa is that they don’t need to worry about any city-level regulations. That means you don’t need to worry about whether or not your property will be approved by local authorities or whether you’ll have some kind of hassle with neighbors who object to short-term rentals near their homes.

However, AirBnB owners in Hillsborough county have to pay three taxes: the Florida transient rental tax (6%), Florida discretionary sales surtax, and a county tourist development tax (5%).

Why We Chose It​

We chose Tampa, Florida as one of the best places to invest in vacation rental property today, because it’s a great place to live and work. It’s the second-largest city in the state of Florida and has a population of around 385,000 people. Tampa’s nickname is “The Sunshine City” because it’s one of the warmest cities in the country (the average temperature is about 70 degrees Fahrenheit). The city was named after a nearby native tribe called the Tocobaga Indians who lived there before Europeans arrived.

Tampa’s history goes back more than 350 years when Spanish explorers first visited this area in 1528. In 1824, Tampa was incorporated as an independent city from Hillsborough County, which it had been part of since 1827. The Tampa Bay Area has seen significant economic growth over the past decade with many companies moving their headquarters to this region due to its low cost of living and high quality of life.

There were about 14.8 million visitors to Tampa in 2021. Pre-pandemic levels were higher. The number of visitations reached an all-time high of 24.5 million in 2019. Tampa real estate values have also seen significant appreciation. In Tampa, the average home value is $415,484. That’s up 34.8% from last year!

Tampa, FL Statistics

Traditional rental properties:

  • Cash on cash return: 2.71%
  • Cap rate: 2.95%
  • Occupancy rate: 93%
  • Average rental income per month: $2,093

AirBnB rental properties:

  • Cash on cash return: 2.41%
  • Cap rate: 2.07%
  • Occupancy rate: 51%
  • Average rental income per month: $2,381
Looking to buy vacation rentals in Tampa? We can help!

Become a member of RealWealth to view sample property pro formas and to connect with Property Teams in Tampa.

3. The Poconos, Pennsylvania

The Poconos are the perfect place for a getaway—and it’s no wonder why.

This market markets our best places to buy vacation rental propery list, because it offers year-round activities for everyone, from skiing in the winter to outdoor fun in the warmer months. There are also a host of shopping and dining options here. For most people in New York, the Poconos are less than a 2-hour drive away; for many in the Philadelphia area, they’re even closer.

The vacation home market in Carbon County is booming; most developments and subdivisions have been built with the vacationer in mind, with lakes, beaches, pools and hiking trails—but be sure to do your homework before buying. Many municipalities have short-term rental rules and regulations for property owners so make sure you find a local realtor who knows the market!

Why We Chose It​

The Poconos are beautiful all year long! Even during the winter, tourists flock to the region for snowmobiling and skiing.

Every year, 27.9 million people visit the Pocono Mountains. That’s a lot of people!

And if you’re looking for an affordable place to buy a vacation rental property, this is it: The Philadelphia housing market is still one of the most affordable. The median price of a home in Mount Pocono is $267,689. Home values have gone up 26.6% in the region.

The Poconos, PA Statistics

Traditional rental properties:

  • Cash on cash return: 1.82%
  • Occupancy rate: NA
  • Average rental income per month: $1,287

AirBnB rental properties:

  • Cash on cash return: 5.62%
  • Occupancy rate: 47%
  • Average rental income per month: $3,099

4. Gatlinburg, Tennessee

Gatlinburg is located just 8 miles from Sevierville, and while Sevierville is a desirable place for families, Gatlinburg is a tourist destination. Over 12 million people visited this area in 2021 for its popular theme parks, car events, hiking and shopping spots.

Gatlinburg is unique because unlike most tourist locations, the area is not swamped with hotels. Hence there is usually less competition between vacation rentals and hotels. However there are certain restrictions if your house is in the city or in a HOA area so make sure you have a knowledgeable local agent to guide you.

Why We Chose It​

There are many wonderful things to do and see in Gatlinburg, Tennessee. The town of Gatlinburg is located at the entrance to America’s most visited national park, the Great Smoky Mountains National Park. This park received as many as 14 million visitors in 2021.

Gatlinburg has also experienced rapid growth in home prices. Zillow reports that home values here have shot up 44.4% over the past year. Currently, the median home value in Gatlinburg is $600,528.

Gatlinbburg, TN Statistics

Traditional rental properties:

  • Cash on cash return: -0.11%
  • Occupancy rate: NA
  • Average rental income per month: $920

AirBnB rental properties:

  • Cash on cash return: 3.60%
  • Occupancy rate: 63%
  • Average rental income per month: $3,965

5. Jacksonville, Florida

Jacksonville has a lot going for it, which is why it’s made our list of the best places to buy vacation rental property today. It has the largest population in all of Florida, and it was ranked number 4 on the list of US cities with the most economic growth in 2021 by Stessa. As population and jobs in this area keep growing, it doesn’t take a genius to predict that this city is going to experience continual housing demand.

But people are not just attracted to Jacksonville for its jobs. The area has a number of beaches, art and history plus plenty of sunshine. January (Winter) temperatures in Jacksonville range from lows of about 12 to highs of 31 degrees Celsius.

Home prices here are also a bit cheaper compared to what you’ll find in South Florida areas like Palm Beach County or Miami-Dade County.

Why We Chose It​

Jacksonville, Florida is a city that prides itself on being a little bit different. The Sunshine State’s largest city has a lot of things going for it—from the miles of pristine beaches to the abundant sunshine that makes it one of the most visited cities in the country. 22 million overnight and day trippers visit Jacksonville every year.

And if you’re looking for a place to buy a second home, Jacksonville offers plenty of options. According to Zillow, the median home price in Jacksonville is $308,000 and has appreciated at the rate of 30.5% over the past year.

Jacksonville, FL Statistics

Traditional rental properties:

  • Cash on cash return: 2.35%
  • Cap rate: 2.96%
  • Occupancy rate: 93%
  • Average rental income per month: $1,855

AirBnB rental properties:

  • Cash on cash return: 4.39%
  • Cap rate: 4.55%
  • Occupancy rate: 58%
  • Average rental income per month: $2,416
Looking to buy vacation rentals in Jacksonville? We can help!

Become a member of RealWealth to view sample property pro formas and to connect with Property Teams in Jacksonville.

6. Temecula, CA

Temecula is located only an hour from San Diego and Palm Springs—two of the most popular vacation destinations in Southern California.

If you’re looking for things to do, there are nearly 50 wineries and a dozen breweries, plus a meadery. There are so many activities for outdoor enthusiasts here. From hot air ballooning to bicycling and golfing, Temecula has it all! And when you need a break from the sun and fun, there’s always Old Town Temecula. It offers shopping, dining, wine tasting, museums and an entertaining nightlife scene situated in a walkable district. Here you can enjoy local craft beers or artisanal cocktails as you shop for gifts or just relax with friends.

Avantstay rates Temecula number two on their list of 25 best places to buy a vacation property in 2022 with an Avantstay investment score of 9.80. However, Temecula prohibits short-term rentals. Short term rental investors should consider Temecula Valley Wine Country, De Luz, and other unincorporated areas of Riverside County.

Why We Chose It​

We chose Temecula as one of the best places to buy vacation rental property today for a few reasons. Firstly, according to the organization responsible for tourism in the City, Visit Temecula, Temecula Valley welcomed approximately 2.4 million visitors in 2021. The total direct travel spending was $614 million—this represents an 18% increase over 2020.

Temecula Valley has also seen some major growth when it comes to home values over the past year. Zillow’s current data shows that the median home value in Temecula is $776,180—that’s 26.3% higher than what it was last year!

Temecula, CA Statistics

Traditional rental properties:

  • Cash on cash return: 2.11%
  • Occupancy rate: NA
  • Average rental income per month: $3,050

AirBnB rental properties:

  • Cash on cash return: 4.63%
  • Occupancy rate: 48%
  • Average rental income per month: $8,158

7. St. Augustine Florida

From its many Gilded Age architectural masterpieces to its gorgeous beaches and charming cobblestone streets, one thing is certain — St. Augustine is one of the most beautiful tourist destinations in the US.

Between its many attractions and vibrant culture, it’s no surprise that 6 million visitors travel to this city every year. This makes it a prime destination for vacation rental property investment.

It’s important to note that vacation rental property owners in St. Augustine will need to register their short term rental property with the city. In addition, they must limit the number of people that can stay in their rental to 12 at a time.

Why We Chose It​

RealWealth co-founders, Rich and Kathy Fettke, LOVE visiting St. Augustine, which is one of the reasons why we believe it’s one of the best places to invest in vacation rental properties!

St. Augustine is the oldest city in America, and it’s a hot spot for vacationers looking to soak up some Spanish culture.

In addition to being rich in culture and history, Saint Augustine has more than 50 attractions including historical sites and points of interest, living history museums, animal parks and ghost tours—all within an hour’s drive from one another! That means there are plenty of things to do when you’re not relaxing on your own private beachfront estate.

According to the Zillow Home Value Index (ZHVI), Saint Augustine real estate values have increased 37.7% over the past year alone! The current median home value in St. Augustine is $475,181.

St. Augustine, FL Statistics

Traditional rental properties:

  • Cash on cash return: 1.43%
  • Occupancy rate: NA
  • Average rental income per month: $1,790

AirBnB rental properties:

  • Cash on cash return: 6.20%
  • Occupancy rate: 51%
  • Average rental income per month: $3,865
Looking to buy vacation rentals in St. Augustine? We can help!

Become a member of RealWealth to view sample property pro formas and to connect with Property Teams in St. Augustine.

8. Gulf Shores, Alabama

Gulf Shores is one of the best places to buy vacation rental property in 2023, because it has more than 50 attractions including historical sites and points of interest, living history museums, animal parks and ghost tours. According to Vacasa’s study, an average Gulf Shores vacation home or condo costs around $400,000 and yields a cap rate of around 10.2%, resulting in around $56,000 in annual gross rental revenue.

Gulf Shores has more than one claim to fame. It’s not only known as “paradise island,” but also as “the little-known gem of the south.” In the summertime, families flock to this area to enjoy the beautiful beaches and water park attractions. There are also golf courses and historical sites making it one of the best vacation destinations for people of all ages!

Why We Chose It​

The Alabama Gulf coast is a premier vacation destination. With its pristine white sands and crystal blue waters, this region has earned itself an annual position on travel magazines’ best beaches lists. Each year, the Alabama Gulf coast region attracts over 6 million visitors, boosting the local economy by nearly 5 billion dollars.

The median home value in Gulf Shores is $442,132. Home values in this region have gone up 27.1% over the past year.

Gulf Shores, AL Statistics

Traditional rental properties:

  • Cash on cash return: 1.03%
  • Occupancy rate: NA
  • Average rental income per month: $1,820

AirBnB rental properties:

  • Cash on cash return: 4.23%
  • Occupancy rate: 55%
  • Average rental income per month: $4,419

9. North Las Vegas, NV

If you’re looking for a relaxing place to escape from the hustle-and-bustle of Las Vegas, North Las Vegas could be the perfect place for you.

With a population of more than 250,000 residents, it’s the fourth largest city in Nevada. It’s the best of both worlds: near enough to the fun of Las Vegas but far enough away to maintain its own identity.

If you love the outdoors and want to be close to nature, you’ll want to visit the Red Rock Canyon National Conservation Area—home to hiking trails that wind through red sandstone cliffs with views of lush green valleys below.

Despite attracting millions of visitors and generating billions of dollars from tourism alone annually, Nevada has strict regulations on short-term rental properties—which means that if you’re interested in buying a vacation rental property here, it’s important that you work with a local real estate agent who has knowledge of the North Las Vegas real estate market.

Why We Chose It​

If you look at the numbers, it’s easy to see why North Las Vegas is such an appealing place to buy a vacation investment property for sale. In 2021, Las Vegas drew more than 32 million visitors, who helped the city bring in more than $11.4 billion in gaming revenue—enough to achieve the milestone of $1 billion per month in gaming revenues at least six times.

The median home value in North Las Vegas is $429,079. North Las Vegas home values have increased by 30.8% over the past year.

North Las Vegas, NV Statistics

Traditional rental properties:

  • Cash on cash return: 2.12%
  • Occupancy rate: NA
  • Average rental income per month: $1,620

AirBnB rental properties:

  • Cash on cash return: 5.77%
  • Occupancy rate: 59%
  • Average rental income per month: $3,843

10. Klamath Falls, Oregon

Klamath Falls is located near Crater Lake and not far from Mount Shasta and Lava Beds National Monument. It’s also home to the beautiful Upper Klamath Lake, where lake and river sports abound. It is by far one of the most gorgeous places to visit in the entire world, which is why it’s made our best places to buy vacation rental property list this year!

This area draws thousands of vacationers every year. With so much to do outdoors, it’s no surprise that many residents prefer to spend their time outdoors exploring the area’s many hiking trails or kayaking on the lake. For those looking for an aerobic workout, miles of biking paths track up into the surrounding hills.

Why We Chose It​

Klamath Falls is one of the best short term rental markets in the US. According to Choose Klamath, Crater Lake receives about 500,000 visitors per year. The town averages more than 300 days of sunshine a year. That means there’s plenty of time to enjoy outdoor activities like fishing, hiking, biking and golfing.

The median home value in Klamath Falls has also increased by 22.3% from last year to $296,558.

Klamath Falls, OR Statistics

Traditional rental properties:

  • Cash on cash return: 4.12%
  • Occupancy rate: NA
  • Average rental income per month: $1,862

AirBnB rental properties:

  • Cash on cash return: 8.53%
  • Occupancy rate: 51%
  • Average rental income per month: $3,815

Conclusion

So, there you have it! We hope we were able to shed some light on the best places to buy vacation rental property in 2023 and make your search for that perfect getaway spot a little easier.

If you’re ready to take the plunge and start looking for your new vacation rental property, we recommend checking out our ultimate guide to buying a vacation rental property.

Aristotle Kumpis RealWealth Investment Counselor
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