The Best Place to Buy a Vacation Home in Every Southern State
Properties in These Southern Cities can Yield High Returns on Investment
Alabama: Gulf Shores
Known for its sugar-white sand and crystal-clear Gulf waters, Alabama’s liveliest beach town understandably attracts a loyal following of repeat visitors (many of whom make the trek to paradise multiple times a year). From a homeowner’s standpoint, this translates to a pretty reliable annual rental income—to the tune of $16,700, on average.
Arkansas: Hot Springs
While it’s the city’s namesake natural wonders that initially attracted visitors here, Hot Springs has built a reputation as a charming little getaway all on its own. Today, visitors come not just for the mountain escape’s healing thermal waters and natural beauty, but also for the food, shops, culture, and family-friendly attractions. Couple the destination’s popularity with surprisingly affordable home prices, and second homeowners can expect a rental property to yield more than 10 percent of the home’s purchase price annually—one of the highest percentages in the country.
Delaware: Rehoboth Beach
In a town that encompasses just one-square-mile, homeowners in Rehoboth Beach can certainly count themselves as members of an exclusive club. But if you can swing the initial investment toward a home purchase, the storybook beach town certainly won’t disappoint in terms of income and overall charm.
In a state that perpetually attracts couples, snowbirds, Spring Breakers, families, solo travelers, young, old, and everyone in between for vacations, where do you choose to set down roots for a second home? Have faith in Disney World. Of all the tourist towns in the Sunshine State, Kissimmee—with its affordable home prices and proximity to Mickey Mouse—yields the highest return on investment.
Always fantasized about owning a historic cottage in Georgia’s most charming waterfront town? Good news: Your dream could also be a smart financial decision. According to the report, Savannah boasts the third-highest rental return in the country, with reasonably priced real estate available (compared with other popular tourist destinations) and an average annual rental income of $13,700.
Anyone who owns a rental home near an annual mega-event like the Kentucky Derby can expect to seriously bank at least once a year. But, outside of Churchill Downs, Louisville is an attraction in its own right for those seeking both history and bourbon-filled fun, making year-round returns on a rental property a real possibility. Here, second homeowners can expect to recoup more than 10 percent of their home purchase price annually.
Louisiana: New Orleans
As one of the most preeminent cities in the South, New Orleans attracts tourists from all over the globe thanks to a roster of world-class festivals, restaurants, and storied jazz clubs. For investors, that year-round draw makes second homeownership here a no-brainer. According to the report, rental properties in The Big Easy can bring home an average annual income of $16,800.
Maryland: Ocean City
The charming sliver of a resort town that makes up Ocean City is packed with family-friendly fun, including an amusement park, boardwalk serving up classic beach treats, and 10 miles of pristine beaches—AKA all the makings of the perfect summer vacation. Every season, Ocean City attracts hordes of tourists looking for a comfy place to stay, which translates to a reliable source of income for anyone lucky enough to own a home here.
Mississippi: Pass Christian
For residents of Pass Christian, time moves by at a pleasantly slow pace. It’s that laid-back way of life that lures visitors to the quaint fishing town, where to-dos consist of nothing but leisurely strolls along the beach, antiques shopping, and settling down for some fresh Gulf coast seafood come happy hour. Those who want to join the club can get in for a reasonable price and expect to earn a good chunk of that back—roughly 9 percent—annually.
Missouri: Osage Beach
There isn’t a Southerner around who doesn’t know the joys of lake house life (and the spectacular sunsets that come along with it). In Missouri, Lake of the Ozarks is perhaps the most popular place to point your GPS come summer, with 1,100 miles of shoreline and plenty of activity both on and off the water. Osage Beach offers variety in terms of real estate pricing, and thanks to its popularity and resort-quality amenities, can bring in an average annual rental income of $14,100 for second homeowners.
North Carolina: Wrightsville Beach
If money isn’t a factor in your second home search—meaning: you have a hefty chunk of cash saved up for down payment—skip North Carolina’s well-trafficked Outer Banks and head down toward Wrightsville Beach instead. The tiny resort town just east of Wilmington comes with a steep home price (just shy of $1 million) but those who can afford that can count on bringing in, on average, nearly $50,000 in rental income per year.
Oklahoma: Oklahoma City
As the largest city in Oklahoma, this urban destination attracts all kinds of renters, from the business travelers to the vacationers looking to explore the area’s museums, shops, performing arts venues and more. Couple that with low housing prices, and real estate investors can expect to pay off the full cost of their second homes in about 10 years, according to the report.
South Carolina: Hilton Head
Beaches, golf courses, luxury resorts, dreamy wedding venues … in terms of tourist draws, one of South Carolina’s most beloved island destinations has it all. For aspiring vacation homeowners looking to capitalize on both personal leisure and income potential, Hilton Head is a good option: Prices here can range from the $300ks to well over $1 million, so there’s a good deal of variety for both investors and vacationers.
Whether you come for the live music, the food scene, the lively country bars, or the urban vibe, Nashville offers everything you’d want from a quintessential Southern city. And as the area’s growth continues to boom, now might be the perfect time to invest. According to the report, second homeowners in Music City can expect to earn an average annual income of nearly $20k from a rental property.
Texas: South Padre Island
Everything is bigger in Texas—and on South Padre Island, that includes rental property incomes. Blame it on the barrier island resort town’s miles of idyllic beaches, its family-friendly attractions, and its world-class birding and nature center, all of which attract healthy crowds to the Gulf coast town each year. With steady traffic, second homeowners can expect their vacation pads to pay for themselves in 11 years.
Virginia: Virginia Beach
Virginia may be for lovers, but the state’s namesake beach town is certainly for smart real estate investors. With draws that include a beach, boardwalk, museums, and a smattering of craft breweries, the city is a natural magnet for fun seekers from Virginia and beyond. And according to the report, capitalizing on that traffic with a rental property could add an extra $19,000 to your income.
West Virginia: Charles Town
Offering a quaint downtown steeped in history with a side of outdoor adventure, tiny Charles Town is beloved for its small town charm and natural beauty. With a footprint that spans less than six square miles, real estate isn’t exactly plentiful, but if you can find a gem within the town limits, you can expect to earn back an average of 8 percent of your home cost annually.