Buying a second home, whether it’s a lake house or a house on the beach, is a pretty significant investment for most. But it’s one that can come with many benefits like a side hustle or extra income if you use the space as a rental property.
In April, vacation rental management platform Vacasa released its annual ranking of the top 10 best places to buy a beach house in the U.S. based on the highest cap rates or yearly rate of return on investment.
To determine the ranking, Vacasa did the following:
- Analyzed home sales and vacation rental performance data from the last 12 months
- Used actual performance data for the market as a whole, where available, to determine average gross rental income
- Considered the averages of the following in each market: property taxes, utilities, HOA fees, insurance, and property management fees to calculate the average cap rate
It’s important to note that Vacasa suggests buyers check current local regulations before deciding to buy a beach house because different areas have different rules about renting out a property.
Median rental revenue: $69,723
Median listing price: $385,000
Example cap rate: 12.08%
Lake Anna is Virginia’s second-largest lake, with about 200 miles of shoreline. It is split into two sections: a public side with waterfront restaurants and a private side where no commercial operations are allowed.
The lake is also easily accessible to those in the Fredericksburg, Richmond, Charlottesville, Northern Virginia, and Washington, D.C., areas.
Homes on the lake stretch across three counties with plenty of waterfront options that offer a splashy cap rate of 12.1% for homeowners, according to Vacasa.
- Lake Anna, Va.
- Hatteras Island, N.C.
- Navarre, Fla.
- Palm Coast, Fla.
- Surf City, N.C.
- Gulf Shores, Ala.
- Destin, Fla.
- North Topsail Beach, N.C.
- Rockaway Beach, Ore.
- 30A, Fla.
Hatteras Island, North Carolina, ranked second on the list. Made up of seven villages, this area draws more than 2.5 million annual visits, according to Vacasa.
It is also part of the Outer Banks, an area that got international recognition thanks to the popular Netflix show “Outer Banks” which stars Chase Stokes and Madelyn Cline.
In Hatteras Island, the median annual rental revenue is $58,556, the median home sale price is $412,500, and the example cap rate is 9.51%.
The third place on the list is Navarre Beach, Florida, which is located just east of Pensacola.
According to Visit Florida, guests crossing the Navarre Beach Bridge often describe it as “a transcendence into paradise” due to the town’s zen-like state.
The median annual rental revenue in Navarre Beach is $50,207, while the median home sale price is $370,000, and the example cap rate is 8.05%.
Navarre Beach is known for its natural environment, picnic spots, and swimming.