Soft, sandy beaches and palm trees, picturesque
views of the mountains, and breath-taking sunsets to cap off yet another
relaxing day. International buyers getting onto the U.S. property ladder to
secure their dreamy vacation home know what they like.
Foreign homebuyers inject billions into the
U.S. housing market, to the tune of nearly $78 billion last year alone. And 29
percent of these international buyers are scooping up U.S. property as a
vacation home with another savvy 14 percent suggesting their purchase is doing
double duty as a vacation pad and as a rental property when they’re out of the
country, according to a 2019 National Association of Realtors report.
The majority of international homebuyers
hail from Canada, China, India, Mexico and the U.S. but this varied mix tends
to concentrate their purchases in a dozen or so key states.
So where are the best places across the
U.S. to set up shop for some sun and fun? Here’s our rundown on the top 10 best
states in the US to buy a vacation home.
Across the board, Florida is the most
popular hotspot for international homebuyers investing in a vacation property. It
must be the mass appeal of beautiful beaches, consistently warm weather and
tourist hubs like Disney World and Universal Studies.
The NAR estimates that one in five foreign
homebuyers purchased their property in the sunshine state, and this whopping 20
per cent is largely made up by Canadians aptly nicknamed “snowbirds” as they
flock to the southern sun during the cold winters. A staggering 42 percent of
Canadians buying U.S. property chose Florida as their second home – the
southernmost state was also at the top of the list for homebuyers from India
(14 percent), and the U.K. (35 percent).
A 2019 Vacasa report listed the top 25
locations for buying a vacation home based on “cap rates” – or the ratio of
home cost to the income a property can produce by being rented out. Turns out,
it’s not just the warm weather and proximity to pristine beaches that makes
Florida such a draw. It’s a lucrative location with the state snagging seven of
the 25 listings in a mix of high-price-high-rent beachfront locations to
lower-price-lower rent inland areas.
Davenport, FL, ranked third overall with
home sale prices at $255,390 and a cap rate of 8.4 percent. (The top 25 places
have a cap rate between 4.5 and 9.3 percent. Vacasa notes that the best places
to buy are not necessarily where the property is cheapest – in some locations
median home sales are pricy but the rental income is also high.)
Kissimmee, Key West, Panama City Beach,
Marathon and Cocoa Beach, and Destin rounded out the list of popular vacation
property destinations in Florida.
Scientists at SetSchedule crunched real
market data to zero in on the best places to invest in a second home in the
U.S. and – once again – Florida took top spot. In this instance, Orlando came
first place overall while West Palm Beach and Panama City came second and third
It’s worth pointing out that Miami is
absent from all of these lists – while it’s seeing a huge surge in its luxury
real estate market, the city is better known for its nightlife and clubbing
scene instead of as an all-around relaxing getaway.
Romanticized in iconic movies, TV shows and
even in song, it’s obvious why international homebuyers descend upon California
to fulfil their vacation home dreams. They’re dreaming of the endless beaches,
the stunning drive along the Pacific Coast Highway, the surfers, and don’t
forget the fish tacos, wine country, and Hollywood sign!
The NAR says California is the second major
destination for international homebuyers, accounting for 12 percent of all
foreign purchases in the U.S. Buyers from China are all about the West Coast –
34 percent of them purchased property in California, followed by 20 percent of
U.K. buyers and 10 percent of buyers from both India and Mexico.
Fort Bragg ranked ninth on Vacasa’s list
with median home prices of about $509,500 and a cap rate of 5.9 percent. It’s
located in the northern part of California – about a 3.5-hour drive from San
Francisco – along the Mendocino Coast, hugging the Pacific Ocean and Jackson
While city life in Fort Bragg was the only
California mention on Vacasa’s list, the west coast state dominated
SetSchedule’s rankings. The gorgeous Napa Valley came in fifth with Palm
Springs, Westlake Village, Laguna Beach and Valencia rounding out the top 10 spots.
Dubbed the Lone Star State, famous for its
incredible food scene (think of the world-renowned BBQ!), hub for live music,
and all-around great weather, it’s no surprise that Texas is the third most
popular state for international buyers shopping for a vacation home.
Texas is the most preferred destination of
homebuyers from Mexico, making up 28 percent of this group’s U.S. real estate
purchases, followed by 13 per cent of buyers from India, according to the NAR.
The U.K, China, and Canada each had three percent of all of their property
purchases made in this southern state.
There are the obvious choices like the
well-rounded and bustling melting pots of Houston, Austin, Dallas and San
Antonio, but international homebuyers curious about Texas shouldn’t rule out
other options too.
Think of Surfside Beach, a lesser-known
town along the Gulf of Mexico and just a drive down the coast from Galveston.
It hands vacationers access to beautiful beaches, a laidback vibe and an
authentic Texan experience away from tourist traps and boardwalk shops.
In further number-crunching, Texan cities
like Waco, Arlington, Round Rock and Corpus Christi also came to the top. This
is based on the steep Airbnb nightly rates they command and a lengthy list of
activities for visitors from museums to amusement parks and historical sites to
stunning beaches and the great outdoors.
Known for its hot desert climate, and unique
geography from lush forests to rugged mountain ranges and countless canyons,
Arizona ranked fourth on the NAR report, raking in five percent of all foreign
buyers. It makes up 20 percent of Canadian homebuyers’ purchases, followed by
six per cent of homebuyers from Mexico.
Scottsdale ranked 17th on
Vacasa’s list – it’s located just outside of Phoenix, sits on the doorstep of
Pinnacle Peak, a prime hiking spot, and has a great downtown area for city life
too. The median home price is about $513,301 with a cap rate of five percent.
Arizona is a playground for those who love
the outdoors, home to national parks, monuments, forest treks and, of course,
the Grand Canyon.
New Jersey and New York
New Jersey accounted for four percent of
all buyers, while New York made up three percent of all international sales.
They both attract buyers from around the world.
Vacation rentals with a proximity to New
York City have their obvious appeal – whether you’re kicking up your feet or
you’re thinking of renting out your space, everyone would love to be within a
stone’s throw of Manhattan.
But it’s worth thinking beyond the Big
Apple too. New Jersey, for example, is home to many picturesque seaside towns
dotted along the Jersey Shore from Atlantic City to Cape May, Seaside Heights
and Spring Lake.
Three percent of all real estate sales made
to international homebuyers were in Illinois and from a varied group of buyers
too – Illinois made up seven percent of all purchases made from homebuyers from
India, along with five percent from China.
Chicago placed seventh on SetSchedule’s
list and for good reason: the researchers behind the report say that while most
cities offer a draw for vacation clientele, Chicago is also a main business hub
in the middle of the country so it fits the bill for both business and
pleasure. This versatility makes it a worthy vacation property investment.
North Carolina made up another three
percent of all international sales, according to the NAR, while it’s western
city Whittier ranked fourth on the Vacasa list overall. The median home price
there is a modest $178,000 with a massive 7.9 percent cap rate.
Whittier is located on the Tuckaseegee
River, so it’s on the doorstep of the Smoky Mountains National Park. It’s
likely international homebuyers closing in on North Carolina like their sports
with white water rafting, great golf courses, and hiking along waterfalls all
The NAR report notes that three percent of
all international homebuyers purchased real estate in Georgia, too, while Blue
Ridge ranked 11th on Vacasa’s list. But don’t forget Savannah with
its quaint cobblestone streets, white sand beaches and trolley rides, to the
busy, buzzing city of Atlanta, steeped in history and culture.
International homebuyers eyeing Hawaii to
set up their vacation spot are good thinkers – while it’s quite isolated from
the rest of the country making it harder for mainlanders to visit, it is
paradise on earth.
Kahului-Wailuku-Lahaina, on the Big Island,
ranked fourth on SetSchedule’s list of top second home locations while two
destinations in Maui – Kihei and Waikoloa – appear on Vacasa’s rankings in 16th
and 23rd respectively, with about a five percent cap rate.
Tourists are constantly flocking to Hawaii
and because it has perfect weather year-round, tourism is steady throughout the
year. So if you can’t vacation 365 days of the year in your island abode,
chances are high you can rent it out making it a worthy investment.
Carmen Chai is an award-winning Canadian journalist who has lived and reported from major cities such as Vancouver, Toronto, London and Paris. For NewHomeSource, Carmen covers a variety of topics, including insurance, mortgages, and more.