Investors building a portfolio of vacation homes should head towards the Great Smoky Mountains National Park.
That’s because a new study ranks two of the region’s cities among the 25 best markets to buy a vacation rental home.
Vacasa’s study puts Sevierville, Tennessee at the top of the stack, based on home sales data and actual performance data, while the region’s Whittier, NC, is at number 4.
Sevierville’s median home sale price is $239,976 while the cap rate is the only one of the top 25 to make double digits (10.3%).
The top 5 also includes Killington, VT, in second place; Davenport, FL, in third; and Kissimmee, FL, in fifth.
And while beaches (30%) and mountains (11%) remain key markets for vacation rentals, urban areas (31%) are also popular for their browsing, shopping, and dining offerings and are the top choice for investor-buyers.
The report also reveals some key characteristics of today’s vacation homebuyers.
Firstly, they are mostly middle class with 75% of buyers having family combined incomes of less than $150,000 a year. Secondly, many of them are Millennials; more than 25% of those in the market are in their 20s and 30s, keen to profit from the booming vacation rentals market.
The survey reveals that 60% of buyers expect to find information about vacation rental purchases on their agent or broker’s website.
More market update: