Investing in a vacation home is no small decision. It’s a major financial undertaking that requires you to commit to a second mortgage, additional insurance and more taxes. The upside of having an escape on standby is tempting, but whether that cozy getaway is worth the money is another story.
GOBankingRates dug into the best places to buy a vacation home in every state based on median home value and monthly rental income. Eleven of the top 13 places happen to be in either the Midwest or South, and all take a shockingly short time to recoup the investment.
Click through to see the best places to buy a vacation home, and start planning your next unforgettable trip.
11. Pass Christian, Miss.
A sleepy waterfront town on the Mississippi Gulf Coast, Pass Christian is where you come if you want to amble through historic homes and antique stores. The area attracts a number of visitors looking for a slower pace of life, and it’s the kind of city where porch sitting is a well-accepted hobby.
Homes cost $153,100 on average, and they can be paid off in about 10 years and eight months by earning a monthly rental income of $1,192.
Check out more warm weather destinations that won’t break the bank.
10. New Orleans
The home of Mardi Gras, Jazz Fest and a number of other major events, New Orleans touts itself as the “festival capital of the world.” Bourbon Street is hopping virtually any night of the week with revelers, while the French Quarter tempts travelers with delectable Creole cuisine, live music and southern soul.
And for a major U.S. city, homes are cheaper than you’d expect. On average, you can expect to pay around $174,600 for a home in New Orleans, and $1,402 of that can be recouped from monthly rental income. It’ll take you just under 10 and a half years to pay off the investment.
9. South Padre Island, Texas
South Padre Island is the place to beat the Texas heat with its 34 miles of white sand. The barrier island also happens to be one of the most popular spring break destinations in the country.
Median home values are a little steeper at $273,900, but you can make an average of $2,225 in monthly rental income. At that amount, you can still pay off the property in about 10 years and three months.
8. Ely, Minn.
Nestled within the famous Boundary Waters Canoe Area Wilderness, Ely is a haven for adventure lovers. The picturesque resort town offers year-round outdoor pursuits — from canoe trips and mountain biking to dog sledding and ice fishing — making it a highly appealing area for those seeking a fun summer getaway or an affordable winter vacation.
You can buy a home for about $140,200 and make back $1,152 a month in rental income because there’s no shortage of visitors. Monthly mortgages average just $673, so you can pay off the investment in less than 10 years and two months.
7. Oklahoma City
Oklahoma also has a reputation for being a flyover state, but the capital is both modern and inviting. With a whitewater kayak center, downtown streetcars and water taxis along the canals, plenty of family-friendly activities are available.
Median home values cost $132,500. Even better, the average mortgage payment is just $859. With a monthly rental income of $1,089, it will take you under 10 years and two months to pay off the property.
6. Omaha, Neb.
Most people don’t consider Nebraska a traditional vacation spot, but you’d be surprised by how far your dollar goes here.
Omaha has experienced tremendous growth recently with over $2 billion poured into developing the downtown riverfront. A prime place for families, the Henry Doorly Zoo and Aquarium, Omaha Children’s Museum, Durham Museum and Lauritzen Gardens are all major draws.
Homes run for approximately $161,000 on average. If you take in $1,332 in rental income, recouping your investment will likely take you a little over 10 years.
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5. Hot Springs, Ark.
If you like visiting spa towns, Hot Springs, Ark., is for you.
The city is located right next door to Hot Springs National Park, which is known for its 47 thermal springs and is the smallest and oldest park in the National Park System.
A home costs on average $117,100, which can be paid off in less than 10 years thanks to the $986 in rent you can make back each month.
4. Louisville, Ky.
Louisville has several other attractions to offer if you’re unable to snag a ticket to the Kentucky Derby. The gateway to the Bourbon Trail, you can sip and sample your way through famous distilleries or take in the rest of the city’s sports culture at the Louisville Slugger Museum & Factory and the Muhammad Ali Center.
Expect to pay around $119,500 for a home, with an average monthly rental income of $1,031. You can pay off your home in about nine years and eight months with a monthly mortgage that’s less than $900.
If those prices aren’t enough to sway you, consider that Louisville is one of the few major U.S. cities where you can afford to live off less than $50,000.
3. Savannah, Ga.
One of the South’s loveliest cities, Savannah is another great investment location for a rental home. The Tybee Island beach is a tourist hot spot, and the coastal cuisine, charming downtown and numerous historical sites, such as Old Fort Jackson, all add to the southern charm.
You can pay off your vacation home in less than nine years and three months thanks to a median home value of $126,300. The monthly rental income is $1,143.
2. Galena, Ill.
Median home values in Galena are quite a bit higher at $153,600, but you can make a good chunk of that back with a monthly rental income of $1,399. That will easily cover your $915 monthly mortgage. Thanks to the high rental income, your home can be paid off in a little under nine years and two months.
Galena itself is one of America’s must-see tiny towns with nearly 100 quaint 19th-century storefronts. According to Midwest Living magazine, it is home to the “Best Main Street in the Midwest.” Nicknamed the “Helluva Half Mile,” the street is a bustling antique trail and features architectural gems that date back to the Civil War era.
1. Michigan City, Ind.
You can pay off the second property in just seven years and two months, which is virtually unheard of anywhere else.
Located on the shores of Lake Michigan, it’s an easy drive from Chicago. The Indiana Dunes are also a major draw as are the zoo, outlet malls, museums, casinos and lighthouses.
Methodology: GOBankingRates used TripAdvisor to generate a list of top vacation destinations in every U.S. state. These places were cross-listed with available Zillow data on: (1) median home value and (2) median rent. To determine the best place to own a vacation home, we calculated how many years it would take earning the median rent as income to pay off the value of the property by dividing the median home value by annual rental income. West Virginia and Wyoming were not included due to insufficient data.