Best States to Buy a Vacation Rental in 2025
- Nate Jones, CPCU, ARM, CLCS, AU
- Oct 9
- 3 min read
Investing in a vacation rental property in 2025 is more than just buying a second home—it’s a strategic move toward financial growth, lifestyle flexibility, and long-term wealth. With remote work, travel demand, and short-term rental platforms booming, savvy investors are asking: Where should I buy my next vacation rental?
Whether you're eyeing a cozy cabin, a beachside condo, or a lakefront retreat, choosing the right location is key. Below are the best states to buy a vacation rental in 2025, based on rental demand, affordability, regulations, and ROI potential.
Top States for Vacation Rental Investment in 2025
1. Florida
Florida continues to dominate the vacation rental market. Cities like Orlando, Panama City, and the Gulf Coast offer year-round tourism, favorable short-term rental laws, and high occupancy rates. With attractions like Disney World and white-sand beaches, Florida properties are ideal for families and international travelers.
2. Tennessee
The Smoky Mountains region, including Gatlinburg and Pigeon Forge, is a hotspot for cabin rentals. These areas offer strong rental income, affordable property prices, and consistent demand from nature-loving tourists.
3. Texas
From College Station to San Antonio and the Texas Hill Country, the Lone Star State is emerging as a top vacation rental market. Texas offers low property taxes, landlord-friendly laws, and growing tourism appeal.
4. Washington
Grays Harbor, WA is gaining traction for eco-tourism and digital detox retreats. With high cap rates (7.5–9%) and low saturation, beachfront and cabin rentals here are ideal for investors seeking nature-focused travelers.
5. North Carolina
From the Outer Banks to the Blue Ridge Mountains, North Carolina offers diverse vacation experiences. It’s a favorite among East Coast travelers and boasts affordable homes with strong seasonal demand.
Why 2025 Is a Smart Time to Invest
Inventory is rising, giving buyers more options and bargaining power.
Interest rates remain volatile, but recent cuts have made financing more accessible.
Remote work and “workations” are fueling demand for flexible, comfortable vacation homes.
Gen Z and millennial travelers prefer vacation rentals over hotels, boosting occupancy.
How Wexford Insurance Supports Vacation Rental Owners
Owning a vacation rental comes with risks—from property damage to liability claims. That’s where Wexford Insurance steps in. We specialize in rental property insurance for:
Long-term rentals
Cabins, condos, duplexes, lake houses, and more
Our tailored policies protect your investment and give you peace of mind. Whether you're buying your first vacation home or expanding your portfolio, Wexford Insurance is your go-to source for comprehensive rental property coverage.
Final Thoughts
Choosing the right state for your vacation rental investment in 2025 can make all the difference in your returns and long-term success. From beach towns to mountain retreats, each location offers unique advantages. But no matter where you invest, protecting your property is essential.
With Wexford Insurance, you get expert coverage tailored to your rental type—so you can focus on growing your income and enjoying the journey. Contact now!
FAQs
Q: What amenities boost vacation rental ROI?
A: Hot tubs, pools, water views, and proximity to attractions are top features that increase bookings and nightly rates.
Q: Are vacation rentals still profitable in 2025?
A: Yes. While competition is rising, demand remains strong. Strategic location and professional management are key.
Q: What insurance do I need for a vacation rental?
A: You’ll need landlord insurance or short-term rental insurance that covers property damage, liability, and loss of income.
