How Long It Will Take To Pay Off a Luxury Rental Property in 10 Overlooked Destinations

The luxury real estate market as a whole has been slowing down. According to a recent Zillow report, new listings and pending sales of luxury properties were both down this spring as buyers and sellers cope with economic uncertainty.

However, investing in a luxury home as a rental property can still be worth it if you choose the location wisely. A new study from Otherworld looked beyond the typical luxury vacation destinations to find overlooked markets where high-end homes still offer strong returns and long-term value. The study compared vacation cities across several factors, including median price of luxury properties, available homes for sale, annual rent and occupancy rate.

Here’s a look at the top 10 locations to invest in a luxury property for a high ROI, ranked by shortest to longest time it would take to pay back the initial investment.

• Median price of luxury properties: $638,500
• Annual rent: $54,000
• Rental occupancy rate: 47%
• Rental payback time for luxury homes: 12 years

• Median price of luxury properties: $1,140,030
• Annual rent: $80,148
• Rental occupancy rate: 78%
• Rental payback time for luxury homes: 14 years

Also See: The Cheapest Place To Buy a Home in Every State

• Median price of luxury properties: $1,869,916
• Annual rent: $115,608
• Rental occupancy rate: 52%
• Rental payback time for luxury homes: 16 years

• Median price of luxury properties: $2,300,775
• Annual rent: $136,236
• Rental occupancy rate: 71%
• Rental payback time for luxury homes: 17 years

• Median price of luxury properties: $1,102,707
• Annual rent: $64,620
• Rental occupancy rate: 73%
• Rental payback time for luxury homes: 17 years

• Median price of luxury properties: $1,685,163
• Annual rent: $96,252
• Rental occupancy rate: 72%
• Rental payback time for luxury homes: 18 years

• Median price of luxury properties: $996,075
• Annual rent: $54,384
• Rental occupancy rate: 71%
• Rental payback time for luxury homes: 18 years

• Median price of luxury properties: $1,369,478
• Annual rent: $73,824
• Rental occupancy rate: 56%
• Rental payback time for luxury homes: 19 years

• Median price of luxury properties: $1,467,449
• Annual rent: $74,544
• Rental occupancy rate: 70%
• Rental payback time for luxury homes: 20 years

• Median price of luxury properties: $1,425,134
• Annual rent: $72,252
• Rental occupancy rate: 52%
• Rental payback time for luxury homes: 20 years

Editor’s note: Data was sourced from Otherworld and is accurate as of May 20, 2025.