Table of Contents
Despite soaring real estate prices over the past few years, demand for both purchasing and renting vacation homes remains strong, especially among folks seeking a place on the beach.
For prospective buyers looking to find a second home that will put money in their pockets while they are away, a new report ranks the most profitable waterfront locations for making a return on your investment.
Vacation rental management platform Vacasa has released the top ten destinations to purchase a beach home in the U.S. in 2023, and some of the results may surprise you.
Here are the 10 most profitable markets to purchase a beach home in 2023:
1. Lake Anna, Virginia
People make use of warm water lake, even in cold weather on Lake Anna, VA. Brian Benjamin, 19, does some wake-boarding behind a power boat filled with friends. (Photo by Gerald Martineau/The The Washington Post via Getty Images)
Taking the crown this year is Lake Anna, Virginia, the second-largest lake in the Old Dominion, spanning three counties. One side of the lake is public, offering waterfront dining, boat launches and marinas, while the other is private and prohibits commercial operations.
Vacasa found Lake Anna offers homeowners the highest annual cap rate, or annual rate of return on investment, than any other waterfront locale in the nation at 12.1%.
Median home sales in the area are around $385,000, and median gross rental revenue comes in at over $69,000.
2. Hatteras Island, North Carolina
Aerial of Bodie Island Light Station, Cape Hatteras, Nags Head, NC. (Photo by: Visions of America/Joseph Sohm/UCG/Universal Images Group via Getty Images)
The No. 2 pick this year is Hatteras Island, North Carolina, a coastal destination that attracts upward of 2.5 million visitors each year.
The median home sale price in the seven-village area is $412,500, median annual gross rental revenue is more than $58,000 and the cap rate is 9.51%.
3. Navarre, Florida
Touring cyclist cycling along bicycle path/cycle track through the town Navarre in winter, Santa Rosa County, Florida, United States/USA. (Photo by: Marica van der Meer/Arterra/Universal Images Group via Getty Images)
This little beach town outside Pensacola rated No. 3 on the list with a cap rate of just over 8%.
Homes in Navarre Beach sell for a median price of $370,000, and annual gross revenue is just over $50,000.
4. Palm Coast, Florida
PALM COAST, FL – JUNE 2 : Sand Hill Cranes can enjoy the extra land around them as many of the housing lots (in background) at the the Grand Haven golf course and homes development do not have the planned homes built on them. Flagler County, Florida
This golfing community between St. Augustine and Daytona Beach draws more than 1 million visitors annually, and vacation property owners average a cap rate of 7.13%.
Palm Coast homes sell for a median price of $345,000, and median annual gross rental revenue is above $43,000.
5. Surf City, North Carolina
RODANTHE, NC – JULY 03: Members of the large Garrison family from Kansas City, MO., play in the surf before complying with the mandatory evacuation orders for Hatteras Island, July 3, 2014 in Rodanthe, North Carolina. A Hurricane warning has been iss
A home in Surf City, North Carolina, on Topsail Island, will set vacation homebuyers back roughly $520,000.
But annual gross revenue is expected to come in to the tune of $50,000 with a cap rate of 5.8%.
6. Gulf Shores, Alabama
FORT LAUDERDALE, FLORIDA – MARCH 16: Beachgoers walk past seaweed that washed ashore on March 16, 2023 in Fort Lauderdale, Florida. Reports indicate that this summer, a huge mass of sargassum seaweed that has formed in the Atlantic Ocean is possibly
Gulf Shores’ family-friendly atmosphere and activities draw more than 8 million visitors each year, making it attractive to vacationers and investors alike.
Vacation homes in the Alabama beach town cost a median of $520,000 and rake in annual gross rental revenue of $49,000 with a cap rate of 5.5%.
7. Destin, Florida
Destin Florida USA, The military beach on Okaloosa Island overlooks Destin a holiday resort on the Panhandle region of Florida. (Photo by: Education Images/Universal Images Group via Getty Images)
Destin is a top destination on Florida’s Emerald Coast, drawing 5 million visitors every year, and over 62% of those who stay overnight book vacation homes and condos.
Picking up a place in Destin will cost around $525,000, but the return is roughly $51,000 annually at a cap rate of 5.32%.
8. North Topsail Beach, North Carolina
Homes on the beach at Topsail Island, North Carolina, on September 12, 2018. (Photo credit should read LOGAN CYRUS/AFP via Getty Images)
No. 8 on the list, North Topsail Beach, North Carolina, is on the sleepier side of Topsail Island and just a short jaunt from No. 5 Surf City.
But with the peace and quiet comes a bit steeper home price at $558,000. Still, the area has a cap rate of 5.26%, so investors can expect gross rental revenue of $49,600 per year.
9. Rockaway Beach, Oregon
Oregon Coast, north of Rockaway Beach. (Photo by Wolfgang Kaehler/LightRocket via Getty Images)
Vacasa notes that the Oregon coast may not be known as a sunny destination, but travelers looking for a cooler climate are still drawn to its beaches.
Rockaway Beach buyers will shell out around $400,000 for a home there and still enjoy roughly $39,000 in annual revenue at a 4.66% cap rate.
10. 30A Florida
Beach resort on Santa Rosa Sound Florida USA. (Photo by: Education Images/Universal Images Group via Getty Images)
Highway 30A, a 20-mile stretch of Florida beach towns between Destin and Panama on the Emerald Coast made No. 10 on Vacasa’s list.
A home along 30A costs about $640,000. With a cap rate of 4.6%, buyers can expect annual revenue of around $55,000 by renting it out.
FOX Business’ Hayley Rieman contributed to this report.