Music City is one of the top places in the US to buy a vacation home, according to Vacasa’s annual rankings.
The Portland-based company’s 2023 report ranks the top 25 cities to purchase a vacation rental property based on capitalization (cap) rate — or rate of return on your investment. This year, Nashville claimed the No. 11 spot, and here’s why:
Cap rate: 5.11%
Annual gross rental revenue: $39,086
Median home price: $432,100
Vacasa said Nashville’s climb from No. 19 in 2022 to No. 11 this year can be attributed to being a hot spot for music, culture, and business. The city’s ever-growing restaurant scene gets a shout out, too.
Crunching the numbers
Vacasa determined the top vacation rental markets by:
- Analyzing home sales and vacation rental performance data from the last 12 months
- Using actual performance data for the market to determine average gross rental income
- Looking at averages for property taxes, utilities, HOA fees, insurance, and property management fees to calculate the average cap rate
Nashville, Gatlinburg (No. 18), and Killington, Vermont (No. 17) are the only non-waterfront cities on the list. The top three places to buy a vacation home right now are Lake Anna, Virginia; Okaloosa Island, Florida; and Sandbridge, Virginia.
What’s on the market?
Here are three homes for sale, all under the median home price.
2502 Neldia Ct., Nashville | $384,999 | 2 bed, 1 bath | 848 sqft | Renovated East Nashville home with fenced in backyard.
803 Hillview Heights #206, Nashville | $425,000 | 1 bed, 1 bath | 418 sqft | This non-owner occupied short-term rental property in the Melrose area comes fully furnished.
208 22nd St., Old Hickory | $399,900 | 4 bed, 1 bath | 2,193 sqft | 1930s cozy cottage within walking distance from Blue Turtle Lake Marina.
