The 10 Best Places To Buy a Vacation Home in 2021

·4 min read
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Shutterstock.com

If you've thought about buying a second home as a vacation property, now may be a good time to do so. According to a recent report by Redfin, second-home buyer demand is slowing down, which will open up more affordable inventory for those still in the market. And while buyer demand for second homes is decreasing, guest demand is still high, which is great news for those looking to make rental income off their vacation home, Vacasa reported.

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According to a recent Vacasa survey, most prospective buyers interested in purchasing a second home are looking to spend under $399,999, and 46% hope to generate rental income ASAP. Fortunately, many of the top places to buy a vacation home in 2021 -- as determined by Vacasa based on home sales and vacation rental performance data from the last 12 months -- meet these qualifications.

Take a look at the top 10 vacation rental markets.

Last updated: Oct. 20, 2021
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DenisTangneyJr / iStock.com

10. Ludlow, Vermont

  • Median home price: $346,950

  • Annual gross rental revenue: $42,638

  • Vacation rental market cap rate: 5.2%

Ludlow appeals to vacationers with a love of the great outdoors, with Okemo Mountain Resort and Buttermilk Falls located nearby. With a relatively high vacation rental market cap rate, this New England locale earned the No. 10 spot on Vacasa's ranking.

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Shutterstock.com

9. Seaside, Oregon

  • Median home price: $466,086

  • Annual gross rental revenue: $45,249

  • Vacation rental market cap rate: 5.2%

This coastal town is easily navigated by walking or biking, and is home to a 100-year-old promenade. Water enthusiasts can do plenty of surfing or kayaking here as well.

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Shutterstock.com

8. Deep Creek Lake, Maryland

  • Median home price: $439,367

  • Annual gross rental revenue: $51,031

  • Vacation rental market cap rate: 5.7%

Deep Creek Lake is home to the state’s largest inland lake for boating, tubing and waterskiing. During the winter months, it's a great place for skiing, snowboarding, snowshoeing and even going for sleigh rides.

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Solidago / Getty Images/iStockphoto
Solidago / Getty Images/iStockphoto

7. Palm Springs, California

  • Median home price: $539,370

  • Annual gross rental revenue: $52,784

  • Vacation rental market cap rate: 5.9%

Palm Springs is an ever-popular vacation destination on the West Coast thanks to its mid-century modern homes and thriving downtown restaurant scene.

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Serge Skiba / Shutterstock.com

6. Blue Ridge, Georgia

  • Median home price: $290,934

  • Annual gross rental revenue: $38,266

  • Vacation rental market cap rate: 6.1%

Located on the border of Georgia and Tennessee, Blue Ridge offers a number of outdoor activities for vacationers, from hiking to see one of its 16 waterfalls, going for horseback rides or attending one of its numerous fall orchard festivals.

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Nolichuckyjake / Shutterstock.com

5. Norris Lake, Tennessee

  • Median home price: $343,907

  • Annual gross rental revenue: $42,450

  • Vacation rental market cap rate: 6.2%

Norris Lake boasts 52 square miles of fresh water, ideal for activities like stand-up paddleboarding, kayaking and wakeboarding. Plus, it's a short drive from Knoxville and all the attractions and amenities there.

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Brian Hancill / Flickr.com

4. Dauphin Island, Alabama

  • Median home price: $382,699

  • Annual gross rental revenue: $43,371

  • Vacation rental market cap rate: 6.8%

Dauphin Island is a family-friendly beach destination. It's home to the Dauphin Island Sea Lab and the Audubon Bird Sanctuary, as well as uncrowded white sandy beaches.

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light rapture photos / Shutterstock.com

3. Gulf Shores, Alabama

  • Median home price: $402,905

  • Annual gross rental revenue: $46,107

  • Vacation rental market cap rate: 7.1%

Plenty of opportunities for water sports and a plethora of bars and restaurants make Gulf Shores an ideal vacation destination.

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Sean Pavone / Shutterstock.com

2. St. Augustine, Florida

  • Median home price: $365,576

  • Annual gross rental revenue: $46,557

  • Vacation rental market cap rate: 7.4%

Beautiful beaches and a downtown historic district attract many visitors to St. Augustine. It's also home to the No. 1 whiskey tour in America at the St. Augustine Distillery.

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SeanPavonePhoto / Shutterstock.com

1. Gatlinburg, Tennessee

  • Median home price: $320,111

  • Annual gross rental revenue: $47,328

  • Vacation rental market cap rate: 8.6%

With a median sale price of around $320,000 and a cap rate of 8.6%, Gatlinburg easily took the top spot on Vacasa's ranking. The Southern destination is home to Skylift Park -- North America’s longest pedestrian suspension bridge -- and Anakeesta adventure park.

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This article originally appeared on GOBankingRates.com: The 10 Best Places To Buy a Vacation Home in 2021