St. Augustine, FL | Joshua Tree, CA | Sevierville, TN | Tucson, AZ | Pagosa Springs, CO | Rockaway Beach, OR | Banner Elk, NC | Dauphin Island, AL | Methodology
Do you dream of owning your own vacation home? Imagine spending summers hiking mountain trails or lounging on the beach with with your family — plus the financial security that could come from short-term rental income.
In 2022, the short-term rental market is ripe with possibilities — in fact, it rose a whopping 21% in June compared to the previous year.
To find the best places to buy a vacation home, we looked for U.S. cities that offer:
- Typical home values under $500,000
- Property taxes under the national average of 1.07%
- Rental occupancy rates of at least 50-70%
- Average monthly rental revenue of $2,000 or more
As homes become less affordable across the U.S., we also focused on vacation destinations that are off the beaten path. If you’re lucky enough to buy early in an up-and-coming neighborhood, your investment may appreciate for years to come!
Ready to buy a vacation home? Our friends at Clever Real Estate can help. Clever offers a free service that allows you to get expert advice from their in-house team of fully licensed real estate experts.
Whether you’re interested in buying a home in Florida, Colorado, or anywhere in between, Clever can match you with the best local real estate agents from top-rated brokers including Keller Williams, RE/MAX, and Century21.
And if you find a home you love, Clever can even help buyers in most states get cash back after closing. For a $400,000 vacation home, that puts money back in your pocket!
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1. St. Augustine, Florida
| 🏡 Typical Home Value | $478,434 |
| 💵 Property Taxes | 0.83% |
| 📈 Rental Occupancy Rate | 77% |
| 💰 Avg. Monthly Rental Revenue | $3,800 |
On the northeast coast of Florida, St. Augustine is home to beautiful blue skies and sandy beaches. The typical home value of $478,434 means you’ll pay about $3,971 in property taxes.
However, the monthly revenue potential is huge if you’re considering a second home or investment property. Not only is the rental occupancy rate a delightful 77%, but the beach market is hot for short-term rental buyers, according to Vacasa’s 2022 Vacation Rental Buyers Report.
Besides the great short-term rental market, St. Augustine made our list of best places to buy vacation homes because it’s also one of TripAdvisor’s top 25 beachesin the U.S. The white powder sand, seaside restaurants, beachfront park, fishing pier, and more draw in vacationers from all walks of life.
2. Joshua Tree, California
| 🏡 Typical Home Value | $472,186 |
| 💵 Property Taxes | 0.73% |
| 📈 Rental Occupancy Rate | 65% |
| 💰 Avg. Monthly Rental Revenue | $4,300 |
The typical home value in Joshua Tree is just $472,186, well below the $788,679 price tag of a typical California home. It’s also one of the hottest real estate markets in the Golden State — real estate prices nearly doubled during the pandemic.
There are plenty of outdoor attractions, from hiking and rock climbing to driving tours that let you comfortably take in the sites of the cactus-dotted desert.
You’ll pay about $3,447 in property taxes based on the typical home value and state tax rate. However, the neighborhood around the high desert national park has excellent revenue potential. Over the past 12 months, homeowners who rented out their homes as short-term rentals saw $4,300 monthly revenue (over $50,000 for the year).
🏡 Ready to buy a home?
If you're ready to buy your next home, our friends at Clever can help! Clever will match you with top-rated agents who know how to navigate your local market.
Best of all, buyers in 41 states and Washington D.C. can get 0.5% cash back after closing! That's $2,000 on a $400,000 home purchase, just for finding your agent through Clever.
3. Sevierville, Tennessee
| 🏡 Typical Home Value | $381,895 |
| 💵 Property Taxes | 0.64% |
| 📈 Rental Occupancy Rate | 77% |
| 💰 Avg. Monthly Rental Revenue | $5,900 |
Sevierville sits just north of the Great Smoky Mountains National Park, making it an excellent vacation spot for singles, couples, and families. It’s the most visited national park in the country, with more than 14.1 million visitors in 2021. It also means it’s an excellent location to tap into short-term rental revenue.
The typical home value is $381,895, which works out to about $2,444 in property taxes. But pay attention to metrics before investing in real estate. For instance, Sevierville gets massive traffic thanks to the national park, putting the rental occupancy rate at a high 77% and makes revenue potential a lucrative $5,800 per month.
4. Tucson, Arizona
| 🏡 Typical Home Value | $331,027 |
| 💵 Property Taxes | 0.62% |
| 📈 Rental Occupancy Rate | 75% |
| 💰 Avg. Monthly Rental Revenue | $2,000 |
If you enjoy the outdoor beauty of the Sonoran Desert, delicious Southwestern cuisine, giant Saguaro cacti, art, and history, you’ll love vacationing in Tucson.
Vacation homes in Tucson are more affordable than in the rest of the state. The typical home value is just $331,027 compared to the state’s average of $448,325. Before you buy, also consider that you’ll pay just over $2,000 in property taxes. However, the property tax rate is well below the national average of 1.07%, and the occupancy rate is a high 75%.
Tucson is also one of the best places to buy rental property in Arizona. Rental growth is remarkable, rising 14% in the first quarter of 2022, putting it higher than the pre-pandemic market in 2019.
5. Pagosa Springs, Colorado
| 🏡 Typical Home Value | $470,132 |
| 💵 Property Taxes | 0.49% |
| 📈 Rental Occupancy Rate | 60% |
| 💰 Avg. Monthly Rental Revenue | $3,200 |
Home prices in Colorado are up nearly 18% in 2022 compared to 2021. But the typical value of a home in Pagosa Springs is $470,132, which is more affordable than the state’s home value index of $586,317. If you’re looking for rental income, the occupancy rate is on the rise — making it an excellent area to invest in.
But price aside, Pagosa Springs is a vacationer’s dream. Situated in southwest Colorado, it’s surrounded by rugged mountains. The area is known for its mineral-rich hot springs and more than 650 miles of trails and waterfall hikes. You can even take a hot air balloon ride and travel to the top of the continental divide on Wolf Creek pass.
6. Rockaway Beach, Oregon
| 🏡 Typical Home Value | $491,403 |
| 💵 Property Taxes | 0.90% |
| 📈 Rental Occupancy Rate | 53% |
| 💰 Avg. Monthly Rental Revenue | $3,500 |
Rockaway Beach has topped the list of family-favorite destinations for more than a century. The small town in northwestern Oregon has seven miles of sandy beaches and a boardwalk path that takes you through the Cedar Wetlands Preserve.
The area also has excellent potential for rental income. The average daily rate for short-term rentals is $259. August is one of the best months to turn a profit. It boasts a 90% occupancy rate (compared to the annual average of 53%).
7. Banner Elk, North Carolina
| 🏡 Typical Home Value | $451,833 |
| 💵 Property Taxes | 0.77% |
| 📈 Rental Occupancy Rate | 50% |
| 💰 Avg. Monthly Rental Revenue | $3,000 |
Do you love to ski? You’ll love Banner Elk. It’s in North Carolina High Country between two ski resorts, Sugar Mountain Resort and Beech Mountain Resort.
However, it’s an excellent place to buy a vacation home, even if you’re not into skiing. The small town is ripe with relaxation, with plenty of culture and adventure thrown in, from the great outdoors, superb dining, and family attractions like Grandfather Mountain with its Mile-High Swinging Bridge.
The average Banner Elk home is just over $450,000. You might turn your vacation home into a rental. The average monthly rental revenue is $3,000 per month, which can go a long way to helping you fund your traveling adventures.
8. Dauphin Island, Alabama
| 🏡 Typical Home Value | $472,960 |
| 💵 Property Taxes | 0.31% |
| 📈 Rental Occupancy Rate | 76% |
| 💰 Avg. Monthly Rental Revenue | $5,000 |
We may have saved the best for last — Dauphin Island has one of the best vacation rental markets on our list. The occupancy rate is 76%, and the average short-term rental revenue is $5,000.
It’s also a top family destination. You’ll find the Alabama Aquarium at the Dauphin Island Sea Lab, historical attractions such as Fort Gaines, and the Audubon Bird Sanctuary, which is one of the largest on the east coast.
The home value is much higher than the state’s average of $207,627, but it has one of the lowest property tax rates in the country. Based on the typical home value in Dauphin Island, you’ll pay $1,466 per year in property taxes.
A vacation home can be your go-to place to escape the demands of life while also generating rental income for years to come.
Whether you’re serious about buying a vacation home or just researching your options, our friends at Clever Real Estate can help. Clever’s fully licensed, in-house concierge team can connect you with the best local real estate agents in your favorite vacation destination. You can learn about local real estate markets from experienced real estate agents who have a proven track record of helping home buyers land their dream homes.
Best of all, buyers in most states can receive up to 0.5% cash back after closing — just for finding a great agent through Clever.
🙌 The Easiest Way to Get Cash Back After Closing!
Did you know 41 states and Washington D.C. allow cash rebates for home buyers? Our friends at Clever can match you with trusted local real estate agents and help you get cash back.
You can spend your money any way you'd like — no questions asked!
Methodology
To rank the best places to buy a vacation home in 2022, we used publicly available data from:
- Zillow: Typical home values in each city
- SmartAsset: Property taxes
- AirDNA: Short-term rental occupancy rates and average monthly income
We also considered qualitative elements, such as nearby amenities and attractions, that can help draw tourists to vacation rentals seasonally or year-round.
Recommended Reading
FAQs
Where should I buy a vacation home?
The best place to buy a vacation home is St. Augustine, Florida, followed by Joshua Tree, California, and Sevierville, Tennessee. All three offer home prices under $500,000, steady short-term rental occupancy rates, and relatively low property taxes. Learn how we ranked the 8 best vacation home spots.
What are the best places to have a second home?
The best places to buy a second home have home prices under $500,000 and relatively low property taxes that are less than the national average of 1.07%. Based on these criteria, the best place to buy a second home is St. Augustine, Florida, followed by Joshua Tree, California, and Sevierville, Tennessee. Learn how we ranked the 8 best places to buy a second home.