Best Places to Buy Vacation Property 2025 Top Markets and Investment Insights

In 2025, buying a vacation property is more than owning a personal retreat-it’s a strategic investment. The right location can generate solid rental income, deliver long-term appreciation, and provide lifestyle flexibility. As buyer interest intensifies, certain markets stand out for combining high tourism demand, favorable valuations, and regulatory friendliness. This article identifies the best places to buy vacation property in 2025, explores key criteria, examines real-world examples, and shows how technology enhances decision-making and management.

What Makes a Location Ideal for Vacation Property in 2025

Demand Drivers: Tourism, Accessibility, and Seasonality

A prime vacation property market combines consistent tourist demand with ease of access. Locations with good airport connectivity, major highways, or other transport links tend to attract more visitors. Meanwhile, natural attractions-beaches, mountains, lakes, national parks-fuel seasonal or year-round demand.

Seasonality matters too. In highly seasonal markets, incomes may spike during peak months but drop sharply off-season. The best markets balance these extremes, ensuring decent occupancy across a broader calendar span.

Affordability, Regulation, and Growth Potential

Price-per-unit and property taxes must remain within reason so that rental income can cover expenses and yield profits. Markets with restrictive short-term rental regulations, strict zoning, or expensive licensing can severely limit profitability.

Growth potential-driven by infrastructure improvements, increasing tourism, or urban spillover equally important. A market that’s “on the rise” may offer better value now than overly saturated or mature markets.

Comparative Returns and Data-Driven Insights

Investors increasingly rely on data platforms (e.g., AirDNA) to assess metrics such as RevPAR growth, occupancy rates, and average daily rates. In 2025, for example, Montgomery, Alabama, leads in RevPAR growth among short-term rental markets.

Also, established industry sources like Vacasa rank top vacation home markets-North Myrtle Beach, Dauphin Island, Okaloosa Island, Hatteras Island, Girdwood, and more-as some of the top places to buy in 2025, based on revenue performance and property value metrics.

Top Places to Buy Vacation Property in 2025

Below are standout locations across U.S. markets and beyond that that combine strong demand, good pricing, and growth potential.

1. North Myrtle Beach, South Carolina

North Myrtle Beach consistently tops the 2025 rankings. It offers a blend of affordability, strong rental demand, and coastal amenities. The area’s median home price is reportedly about $360,747 with a projected gross cap rate of 8.10%.

This market draws beachgoers, golfers (given local courses), and families, giving it diversified appeal. Its relatively moderate development and room for further growth make it attractive to investors seeking coastal exposure without extreme price premiums.

2. Dauphin Island, Alabama

As a barrier island near Mobile, Dauphin Island mixes quiet charm with coastal access. It’s ranked high by Vacasa’s 2025 list, with average revenue estimates around $53,293 and a median home price of ~$645,330.

Homes are often designed for large groups, featuring wrap-around decks and open layouts. The area’s small-town nature can buffer it from overdevelopment, preserving scarcity and character.

3. Okaloosa Island, Florida

Situated between Destin and Fort Walton Beach, Okaloosa Island is a three-mile stretch of prime Gulf Coast property. Its median property price hovers near $654,494, and revenue potential is strong (average revenue ~$50,292).

Because it lies in an already established tourist corridor, it benefits from adjacent infrastructure and branding, while offering fewer entry barriers than ultra-premium neighbors.

4. Hatteras Island, North Carolina

Part of the Outer Banks, Hatteras is characterized by scenic coastline, smaller towns, and limited hotel options. These conditions make vacation home rentals desirable. Its projected revenue is ~$58,86,2 and a median home price of ~$805,585.

Hatteras faces challenges in regulation (beach erosion, environmental constraints), but its uniqueness and limited supply make it a compelling niche play.

5. Girdwood, Alaska

As Alaska’s only true resort town, Girdwood offers skiing, natural beauty, and remote appeal. It’s a smaller niche market, but ranked in the 2025 top lists.

Its appeal lies in high-end seasonal tourism, particularly among those seeking wilderness and exclusivity. This type of market suits boutique vacation properties.

6. European Option: Tenerife, Canary Islands, Spain

Outside the U.S., Tenerife in the Canary Islands offers strong tourism, mild climate, and attractive yields. Reported occupancy rates approach 70%, with capitalization rates in the double digits (~14%).

Such overseas markets can diversify portfolios geographically; however, additional considerations like foreign ownership laws, tax treaties, and currency risk apply.

How Technology Enhances Vacation Property Investment

Predictive Analytics and Market Intelligence

Modern platforms provide data-driven insights into future revenue, occupancy trends, and pricing patterns. Investors can simulate performance under different scenarios, allowing for more confident decisions.

For example, you might compare projected returns for North Myrtle Beach versus Okaloosa Island while factoring in seasonality and expected cap rate changes over 5–7 years.

Remote Monitoring and Smart Property Tools

Smart thermostats, leak sensors, smart locks, and lighting systems let owners manage properties remotely. This is especially important for vacation homes located far from your primary residence.

If a water leak or HVAC failure arises, alerts can notify you immediately—saving on damage costs and guest disruption.

Automated Booking, Guest Management & Dynamic Pricing

Vacation property platforms (or PMS software) integrate instant booking, guest messaging, review management, and dynamic pricing algorithms. These reduce manual work and ensure your property remains competitively priced.

Using such software means you may not need an on-site property manager; you can scale operations across multiple locations more efficiently.

Benefits of Investing in a Vacation Property

Income Potential and Capital Appreciation

A well-chosen vacation property can yield daily income during peak seasons and still appreciate over the years. The dual benefit makes these properties more potent than pure investment holdings.

Seasonal income can offset mortgage, maintenance, and insurance. In growing markets, capital gains magnify total returns over time.

Lifestyle Access and Personal Use

You gain a personal vacation asset. You can stay there when not rented out, combining investment with personal enjoyment.

This dual use provides intangible benefits-emotional satisfaction, convenience, and the flexibility to create experiences on demand.

Portfolio Diversification

Vacation properties diversify real estate investments by adding exposure to tourism cycles rather than just urban residential or commercial markets.

Because vacation demand often moves independently from general property cycles, these assets can hedge risks in a broader portfolio.

Tax and Financial Planning Strategies

Depending on your jurisdiction, you may benefit from deductions (interest, depreciation, maintenance) and favorable tax treatment of short-term rentals.

Some owners structure vacation properties within entities or leverage real estate tax strategies to optimize returns legally.

Use Cases: Real-Life Scenarios Where These Choices Solve Problems

Case: Urban Professional Seeking Escape and Income

An executive in New York may buy a home in North Myrtle Beach. During off times, it serves as a weekend retreat; during peak seasons, it generates rental income to offset costs.

Case: Real Estate Investor Scaling a Vacation Portfolio

An investor may simultaneously hold properties in Okaloosa Island, Hatteras, and Tenerife. Technology and data platforms let her monitor performance, adjust pricing, and manage properties remotely.

Case: Retiree Planning Relocation

A retiree might buy in Dauphin Island and gradually shift primary residence there. In early years, short-term rentals help defray costs; in later years, it becomes the main home with residual income.

Frequently Asked Questions (FAQ)

Q1. Which region offers the best balance of risk and return for vacation property in 2025?
Coastal markets in the southeastern U.S.-such as North Myrtle Beach, Okaloosa Island, and Dauphin Island-often strike a strong balance. They combine established tourism, moderate land costs, and favorable regulatory environments, giving investors a better risk-adjusted return.

Q2. How do regulatory or zoning issues impact vacation property investment?
Local regulations (zoning, short-term rental licensing, HOA rules) can limit nightly rentals, enforce minimum stay durations, or require higher taxes. Always research local laws before committing-restrictions may drastically erode profitability.

Q3. How far should I diversify geographically with vacation properties?
Geographic diversification helps mitigate local market shocks (weather, regulation changes, demand fluctuations). Having properties in different states or even countries (with stable tourism) is beneficial to ensure you can manage or service them effectively (via local partners or tech).