The heart of winter has arrived and for many that means it’s time to hit the slopes.
Vacation rental management service Vacasa crunched the numbers on the best places to buy real estate and cash in on the winter vacation crowd for the year, based on median home costs and capitalization rates.
Cap rates are a measure of annual income after expenses as a percentage of the cost of buying a property. The cap rates listed divide net income by historical costs of buying vacation rentals in each market.
The list shows that ski resort towns are undoubtedly the best place to buy winter vacation rentals so long as climate change doesn’t entirely destroy the ski industry.
Killington, Vermont topped the list with a cap rate of around 8.31 percent. It also has the lowest median home cost of any other market in Vacasa’s top 10 list. Vermont was the only state with three towns on the list, but was also the only state on the East Coast. The two other towns — Ludlow and Warren — have 4.83 percent and 4.57 percent cap rates, respectively. They were also the second and third cheapest buy-ins on the list.
Big Sky, Montana made the second spot on the list with a 6.1 percent cap rate, but also had the highest entry cost of any market. The median home price in the small ski resort community of a few thousand people is $585,000, but it’s also home to the biggest single ski resort in the country, the eponymous Big Sky Resort.
Breckenridge and Dillon in Colorado, with cap rates of 5.56 percent and 4.92 percent, came in behind Killington and Big Sky. Good returns can also be expected in Rhododendron, Oregon and Leavenworth, Washington, although the former edges out the latter with a slightly higher cap rate.
A pair of California towns rounded out the list. Cap rates figured out to 4.25 percent in Shaver Lake, where a typical home will cost just under $460,000. The median home is just under $300,000 in Big Bear City, but estimated cap rates are slightly lower at 4.11 percent. [Vacasa] — Dennis Lynch