Vacasa, North America’s leading vacation rental management platform, recently released its fifth annual Top 25 Best Places to Buy a Vacation Home report. And this year, two Arizona cities ranked within the top 25 spots — Phoenix (7) and Tucson (13).
READ ALSO: Arizona No. 2 for largest house price appreciation
Vacasa ranked its top 25 markets to purchase a vacation home based on capitalization (cap) rate, or rate of return on investment. Here is a breakdown of the leading Arizona markets.
Phoenix
Cap Rate: 7.8%
Median home sale price: $470,000
Annual gross rental revenue: $58,000
Tucson
Cap Rate: 7/1%
Median home sale price: $340,000
Annual gross rental revenue: $43,000
Top 20 best places to buy a vacation home in 2022
Other key takeaways from the report
Rising home prices open up new top markets: While vacation rentals in the most popular vacation destinations can still deliver healthy returns for homeowners, climbing median home prices are affecting cap rates in several of our past top markets. The upside? That cap rate compression gives buyers even more options to consider, with over a dozen new markets on the list this year.
Inventory is catching up with demand: After several years of historically high demand—coupled with historically low inventory—the real estate market is stabilizing and inventory is catching up. That’s good news for buyers who have more opportunity to regain some leverage in what is still, predominantly, a seller’s market.
Still trending – beachfront road trips: According to our 2022 Vacation Rental Buyer Report, short-term rental buyers are most interested in beach markets, up 10% over 2021.
A price point for every buyer: The 2022 Vacation Rental Buyer Report also shows that younger buyers are now the majority of vacation home purchasers, and millennials and Gen Z are willing to spend a bit more than the older generations—with budgets often over $400,000.
