Buying a vacation home, whether it's a beach house or a spot on a lake, can prove to be a smart investment. You, your family or friends can use the home whenever you want and you can rent out the space if you need some extra income.
In February, vacation rental management platform Vacasa released a report on the best places to buy a winter vacation home in the U.S. based on the highest cap rates.
To determine its ranking of the top vacation rental markets, Vacasa did the following:
- Analyzed home sales and vacation rental performance data and projections 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
Vacasa suggests prospective buyers check current local regulations before buying a winter vacation house because different areas have their own set of rules about renting out a property.
The best place in the U.S. to buy a winter vacation house is Big Sky, Montana
Cap rate: 8.00%
Median home sale price: $730,814
Annual gross rental revenue: $108,772
Big Sky, Montana took the top spot on Vacasa's list. The unincorporated community, meaning it doesn't have a city government, is home to world-class skiing resorts and is located approximately midway between Yellowstone National Park and Bozeman.
One of the most renowned places in the area is the Big Sky Resort which offers more than an acre of mountain per skier. The resort says the quietest and one of the most affordable months to go on the mountain is April, according to Travel and Leisure.
Homes in the area offer a cap rate of 8%, according to Vacasa. Because Big Sky is so rich in outdoor recreation, it makes it an easy vacation destination that appeals to buyers and visitors alike.
10 best places in the U.S. to buy a winter vacation house
- Big Sky, Mont.
- Killington, Vt.
- Teton Village, Wyo.
- Vail, Colo.
- Stowe, Vt.
- Steamboat Springs, Colo.
- Brian Head, Utah
- South Fork, Colo.
- McCall, Idaho
- Whitefish, Mont.
Killington, Vermont, is the second-best place to buy a winter vacation house. The Vermont town offers a cap rate of 7.50%, a median home sale price of $361,007, and an annual gross rental revenue of $46,052, according to Vacasa.
Killington's median sale price is on the lower end compared to the other vacation destinations in the ranking, making it an ideal real estate investment for winter vacation homes and short-term rentals.
Killington is home to one of the largest ski resorts on the East Coast and when it's not snowing, people can bike across the Vermont Rail Trail.
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