Top 25 Best Places to Buy a Vacation Home in 2019

When considering buying a vacation home, especially one to be used as a short-term rental, it is important to consider the factors that will impact the return on your investment (ROI).

One of those is of course location.

For the second year in a row, I have pulled together a ranking of the top places to buy a vacation home, which is largely based on cap rate. For those who are not familiar, cap rate is the rate of return on investment and is calculated by dividing the net operating income (income less expenses) by the home’s purchase price.

As a general rule, if the cap rate is greater than the interest rate, you’ll come out ahead. If the cap rate is lower than the interest rate, you’ll be relying on appreciation for your return, making it a potentially riskier investment.

Below are the best places to buy in 2019. This year, we’re seeing a lot more mountain towns show up next to popular beach destinations.

While Florida earned the highest number of markets for the second year in a row, it was Sevierville, Tenn., that took top honors, followed by nearby Whittier, N.C., both nestled in the Smoky Mountains.

Read on for the full top 25 list ranked by cap rate, and start planning for your vacation home investment today.

Top 25 Best Places to Buy a Vacation Home in 2019

Rank	City	Median Home Price	Cap Rate
1	Sevierville, TN	$239,976	10.30%
2	Killington, VT	$208,828	9.27%
3	Davenport, FL	$255,390	8.39%
4	Whittier, NC	$178,000	7.91%
5	Kissimmee, FL	$264,863	7.23%
6	Dauphin Island, AL	$345,281	6.67%
7	Myrtle Beach, SC	$213,950	6.18%
8	Key West, FL	$763,109	6.06%
9	Fort Bragg, CA	$509,500	5.87%
10	Big Sky, MT	$585,000	5.43%
11	Blue Ridge, GA	$273,000	5.37%
12	Gulf Shores, AL	$345,135	5.33%
13	Panama City Beach, FL	$347,430	5.31%
14	Warren, VT	$262,003	5.30%
15	Marathon, FL	$639,000	5.14%
16	Kihei, HI	$708,161	5.04%
17	Scottsdale, AZ	$513,301	5.03%
18	Orange Beach, AL	$475,026	4.80%
19	Harbor Springs, MI	$256,303	4.70%
20	Rhododendron, OR	$315,744	4.70%
21	Ellijay, GA	$243,000	4.65%
22	Seaside, OR	$373,258	4.65%
23	Waikoloa, HI	$575,422	4.64%
24	Cocoa Beach, FL	$370,406	4.63%
25	Destin, FL	$484,154	4.50%

Which destination appeals to you most?

Comment below!

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.