With the real estate market re-stabilizing, both top and up-and-coming rental home destinations are showing strong capitalization rates, which means that vacation rental home buyers have more markets to choose from, and more destinations to consider.
As vacation rental home buyers hunt for their perfect vacation home destination, Vacasa ranked the top 25 markets based on capitalization rate to find the best places to invest in vacation real estate.
Phoenix ranked among the top 10 markets at No. 7, while Tucson ranked No. 13. Both cities have capitalization rates over 7% and median home sale prices close to $400,000.
Let’s take a closer look at what makes both cities some of the best places to buy a vacation home.
Phoenix, Arizona
- Capitalization rate: 7.8%
- Median home sale price: $470,000
- Annual gross rental revenue: $58,363
With year-round sunshine as well as a thriving tech scene and surrounding desert landscape, Phoenix is a hotspot for vacation homes. The city itself has lots to offer, from championship golf courses and luxury shopping malls to an exciting nightlife, while Camelback mountain and Papago Park provide hiking trails and desert adventures for outdoor adventure seekers. Locals and visitors alike enjoy Phoenix’s endless attractions, which also include family-friendly options like the Phoenix Zoo.
Tucson, Arizona
- Capitalization rate: 7.1%
- Median home sale price: $340,000
- Annual gross rental revenue: $42,749
Home to the University of Arizona and some of the best nature trails and sites, Tucson offers plenty of fun activities for adults and children. Saguaro Park, Seven Falls and The Loop, a 130-mile paved trail surrounding the city, boast the beauty of the Sonoran Desert, while museums, farmers markets and food festivals preserve and honor Tucson’s native culture.
Click here to view the complete list of the top 25 markets for buying a vacation rental home.
