best place to buy a beach house

Best Places to Buy a Beach House for Vacation Rental in 2025

Beach vacation rentals are hugely popular, especially during warmer weather. If you’re keen to start a vacation rental business, the thought of buying a beach house and owning your own stretch of sand may have crossed your mind.

Some property investors may buy a beach house close to the ocean shores to enjoy with family and friends during the summer and only rent out the property during the winter months. This strategy allows them to earn rental income at a time when the oceanfront house would otherwise stand empty. Others may do the opposite and turn this investment into their primary source of income.

Whether you think of your new beach rental as your main or secondary source of income, you need to be well informed to make the most of your investment. Keep reading to find out where the best places to buy a beach house are in 2025.

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Why now is a good time to buy a beach house

The renewed desire to travel has heightened the attractiveness of beaches and open spaces, so beach vacations are more in demand than ever. Meanwhile, the vacation rental market is expected to grow to a market volume of $125.58 billion by 2029. Therefore, it’s the perfect time to invest in beach property to earn money as a side hustle or even to turn your property investment into a full-time job.

Remember that renting a beach vacation home every year for a few weeks during peak season may earn you nearly as much or even more than the annual mortgage on a holiday home. Moreover, your rental income during the off season could also help pay off your mortgage.

However, not all beach houses are made equal, and knowing what type of beach house best suits your needs as a vacation rental owner is essential. Our list of the best places to buy beach property in the U.S. will help you make the best beach real estate investment.

What to consider when buying a beach house

In this article, we’ll answer some questions you may have about how to buy a beach house and look at what you can do to make your home attractive to potential guests.

We’ll consider some of the best beach towns to buy a vacation home to inspire you. Of course, other factors, such as your budget and where you live, are also important when choosing the best place to buy a beachfront home.

Define your goals

Why do you want to own a beach house? Do you want to own a spot of heaven near white sand beaches to use during the summer and rent out during the off-peak months? Or, are you thinking of investing in a vacation property to rent out throughout the year?

If the house is for your personal use, you need to love it. However, if it’s purely an investment strategy, your personal preferences for the home are arguably less important.

Additionally, if you only intend to rent out your beach house occasionally or out of season, your financial goals will be different from those of a vacation rental owner with the sole intention of getting a good return on their investment.

In this case, you’ll have to be strategic when it comes to setting your prices during the spring and summer. Without preparation and a good business plan, it may be challenging to cover the winter months when demand is lower.

On the other hand, the income during the peak season may be more than enough to tide you over the leaner periods.

Plus, it’s important to consider who your target audience is. For example, more remote workers and families are looking for attractive home-away-from-home options throughout the year. If you’re catering to digital nomads, be sure to have a nice workspace for them. Alternatively, consider kid-friendly amenities like cribs if you’re trying to attract families.

Do your research before you buy a house close to the beach

As with any large investment, it is essential to do your research before rushing in. Identify the best place to buy your beach house. Read our list of the best beach towns to invest in below, but remember that location isn’t the only factor when it comes to making this investment.

Find a real estate agent who specializes in vacation rentals in the area

You want to look for someone who is an expert in this area and whom you can trust completely. A specialist will be able to advise you on the type of property potential guests are usually seeking and the best beach towns in the area to buy a vacation home that guests will love.

Draw up a business plan

The best investment decisions come from doing the groundwork involved in creating a strategic vacation rental business plan—long before you even hand over the deposit or receive the keys. Creating a viable business plan will help you identify risks before you invest, which will in turn help you determine the chances your business has of achieving success.

beachfront investment property

Should I buy a beach house or condo?

Beachfront condos tend to be more affordable than comparable houses in the same location. Keeping the house in good condition is also usually cheaper and easier, particularly if you are a property manager who lives far away from your investment property.

However, it’s also true that single-family houses usually grow in value faster than condos. According to the National Association of Realtors, the median sales price of a condo is steadily increasing at a rate of 1.4% per year, while the median sales price of single-family homes is increasing 1.7% in the same timeframe.

More recently, in April 2025, U.S. prices for new homes were up 3.6% from 2024, selling for a median price of $518,400. Of course, a condo’s location, condition, and amenities also impact its long-term value and the return on investment from any potential rental income.

How much does a beach house cost?

The average beach house purchase price can be considerably more than a similar house in an inland location, particularly in some of the most popular beach towns.

Remember that mortgage down payments and interest rates for vacation homes, particularly in sought-after towns, tend to be higher, too.

For example, the median sales price of a single-family home in Palm Beach County, Florida, is $625,000 in 2025. The median price of condominiums in the area is $310,000.

Additional property management costs

Managing a vacation rental entails a lot of work, including marketing the property, managing rental agreements, and ensuring the property is in a good state of repair.

If you are a part-time vacation rental owner, you may need to employ a property manager, which adds to the cost. Advertising your property to potential guests is another possible expense.

A more cost-effective option for short-term rental owners is to use vacation rental software, such as Lodgify, to help manage and grow your business.

Also, remember that the furniture and fixtures of beach houses often have to be replaced more often than in inland homes due to corrosion caused by the salty air.

where to buy a beach house

How to buy a beach house for rental income

Consider the CAP rate

As the vacation rental owner, what’s even more critical than palm trees or beautiful sunrises is the capitalization rate (cap rate). The cap rate is the rate of return on your real estate investment.

The CAP rate is calculated by dividing the net operating income of a rental property by the current market value of the property. Although it’s not the only indicator of vacation rental success, it is an important marker for which locations you should invest in.

Find out more about the CAP rate formula and what constitutes a good vacation rental cap rate in our previous post.

The general rule of thumb is that a higher CAP rate equals a better investment, but it could also be riskier. The advice is to hover between 5-10%. In a very established short-term rental market, a lower CAP rate could still be profitable, though.

Watch out for hidden costs in beach house real estate

When you consider how much it is to buy a beach house, don’t only look at average beach house costs. Consider hidden costs such as higher insurance rates, mainly because of the risk of flooding.

For example, insurance on oceanfront investment property could become very expensive on the East Coast because of the risk of hurricane damage.

Understanding the beach house rental tax rates

Many beach towns have high taxes because of the higher value of these homes.

In the United States, you won’t need to pay taxes on your income if you rent out your property for no more than 14 days per year, and if you use the rental property personally for more than 14 days.

Therefore, if you rent your property for more than 14 days per year, all standard tax laws apply, according to your location. Read more about tax implications for short-term rentals in our previous post.

How to finance a beach house

Financing your vacation rental home requires a mortgage. To find out more about mortgage rates and the different types of loans you could apply for as a vacation rental owner, read our post for tips on how to finance your vacation rental home.

average beach house cost

Where is the best place to buy an oceanfront property?

Which are the best beach towns for buying a vacation home? This will depend on different factors. If you are looking for the best place to buy a beach condo or house primarily for your own use, you will want to look for a location you love and a home that works best for you and your family from a practical point of view.

If, however, you are looking at the best beach towns to buy a vacation home from a pure investment point of view, you will need to look at lists of beach towns with the highest cap rates.

Bear in mind that managing a property from afar is more complex and expensive, so unless you plan to be near the property, you need to factor in the cost of a property manager for your vacation rental.

When considering the best location, take into account:

  • The guest experiences during all four seasons
  • Proximity to an airport
  • Access to public transport
  • Distance from tourist attractions

Don’t forget to familiarize yourself with the local vacation rental laws. Some states require a license.

Best place to buy a beach house in California

Malibu has one of the highest Airbnb rental incomes on a list provided by reAlpha. However, median home values sit at $3 million and insurance prices can be hefty due to the risk of wildfires. Other recommended places to buy a beach house in California include:

  • Newport Beach
  • Santa Monica
  • Laguna Beach
  • La Jolla
  • Santa Cruz
  • Encinitas
  • Solana Beach

Best places to buy a beach house in Florida

Known for its expansive estates and world-famous golf courses, Naples is a top choice for where to buy a beach house in Florida. The median home price sits at a respectable $850,000. Other great options include:

  • Destin
  • Indian Rocks Beach
  • Fort Walton Beach
  • Daytona Beach
  • Ormond Beach
  • Vero Beach
  • Satellite Beach
  • Pensacola Beach
  • Miami

Best place to buy a beach house in Texas

In Texas, the town with the most short-term rental income potential is South Padre Island. Hosts can expect to make anywhere between $50,000 and $90,000, with median home prices ranging from $500,000 to $1.5 million. Other cities in Texas with high earning potential include:

  • Galveston
  • Port Aransas
  • Corpus Christi
  • Rockport
  • Mustang Island

best place to buy oceanfront property

How to make your beachfront rental property attractive to guests

Put yourself in the guest’s position and imagine the amenities and qualities you’d be looking for in a beach house during your holiday. Also, read our post about the best Airbnb interior design trends for inspiration about the types of environments guests love. Which personal touches do you need to add to your property to make your guests feel at home?

Perhaps a nice outside setting for sipping cocktails while watching the sunset, a hammock to relax with a book, or a personalized local guide with the best nearby beaches and attractions for families.

How to make money with your beach house

The amount of money you can earn with your beach rental depends on many factors, as explained above. These include location, the number of listing sites you use, the condition of your property, and whether you have invested in vacation rental property management software to help you grow your business.

The software allows you to manage your business, grow your direct bookings through your own website, as well as manage bookings on other sites such as Airbnb and Vrbo, with everything synced through a channel manager.

Whether you are thinking of purchasing a vacation home to rent out during the winter months or investing in a full-time vacation rental by the sea, there has rarely been a better time to own your own piece of paradise.

If you’re entering the market or expanding your business, why not try Lodgify’s vacation rental software with a 7-day free trial? Our property management software has everything you need to increase your occupancy and income.

Don’t see the form to download our business plan template? Click here.

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