Key West is named one of best U.S. cities for vacation homes
If you’re in the market for a vacation home — we are not, but you may be — a new report says Key West is one of the best places to buy one.
Vacasa, a management platform for vacation rentals, just released 2020’s Top 25 Best Places to Buy a Vacation Home report, and Key West comes in at No. 19, dropping from last year’s ranking of No. 8.
To determine the rankings, Vacasa analyzed home-sales data from the last year for U.S. vacation destinations and overlaid it with performance data for thousands of U.S. vacationrental properties. Vacasa then calculated the average cap rate — the rate of return expected on an investment property — using averages of property taxes, utilities, homeowners-association fees, insurance and property-management fees.
Key West, which Vacasa praised for its beaches, history, bars and music, has a median home price of $653,343, according to the report, with an annual gross rental revenue of $66,015 and a cap rate of 5.8%.
Two other Florida cities made the top 25: Kissimmee was No. 14 with a median home price of $250,210, an annual gross rental revenue of $33,969 and a cap rate of 6.1%. Panama City Beach came in at No. 25, with a median home price of $290,157, annual gross rental revenue of $32,765 and a cap rate of 5%.
The No. 1 market for vacation homes is Big Sky, Montana, with a median home price of $541,842 and a cap rate of 9.2%.
Vacasa also reports that it expects all markets to rebound whenever the COVID-19 pandemic ends.