Lakes are quintessential all-American vacation destinations. Regardless of which side of the lake versus ocean debate you fall on, you can’t argue with the fact that the former provides a year-round reprieve from our busy lives, along with an endless supply of water sports, idyllic views, and cool breezes. And with approximately 480,000 lakes dotting the continental U.S., chances are there’s a natural or man-made option a quick drive from your home.
So, no wonder lakefront properties are an increasingly popular real estate investment. But as demand has risen, so have prices. That’s why vacation rental company Evolve put together a list of the best places to buy a lake house in 2023.
The company looked at three main factors when evaluating the data: median home value, estimated yearly expenses, and vacation rental performance metrics for lake house destinations across the U.S.
“When determining the best places to buy a lake house, we look at destinations that have advantages for both potential investors and future guests,” Louis Olds, director of real estate at Evolve, told Travel + Leisure. “For investors, we present the Evolve Difference as a way to help lake house owners maximize income and exceed the projected revenue of the market. For guests, we showcase desirable locations that have the right atmosphere for relaxation, natural beauty, and many ways to have fun.”
Keep reading to find 12 of the best places to buy a lake house in the U.S.
Saranac Lake, New York
This historic mountain town in the Adirondacks tops Evolve’s ranking, thanks to its affordable median home prices ($250,190) and great rental potential ($25,294). Located in upstate New York — with proximity to not one but several lakes, including Lake Placid — the charming destinations has a bustling cultural scene with year-round activities, events, markets, and festivals, only adding to its appeal with renters. In the winter, the town becomes a major ski destination. Visitors can enjoy 15 acres of skiable terrain that’s also perfect for snow tubing and snowshoeing.
Branson is a magnet for vacationers of all ages, with many family-friendly activities in the area, including theme parks, live entertainment, and hundreds of miles of scenic shoreline, courtesy of Table Rock Lake. With a relatively low median home value — just over $232,000 — the destination is an excellent option for first-time investors seeking an affordable property with good rental potential — almost $20,000 a year, according to Evolve.
Brainerd Lakes, Minnesota
The Brainerd Lakes area sits in the heart of Minnesota and is home to some of the state’s most scenic lakes (when your nickname is the “Land of 10,000 Lakes,” that says something about the region). Water sports and fishing are favorite pastimes here, but with seven championship golf courses, so is golfing.
The abundance of recreational activities available in the dozens of small towns here is excellent news for potential investors. Evolve experts note the average cap rate for lake houses in the region is around 5%, with median rental revenue slightly over $27,000. According to the company, lakefront cabins and homes with decks, fire pits, and grills perform better than any other rental property type.
Traverse City, Michigan
Known as the Cherry Capital of the World, Traverse City, located on the banks of Lake Michigan, also sits close to vineyards, wineries, and, most importantly, several smaller lakes, where investors can find prime real estate at much lower prices. Families flock to the towns around Silver Lake and Island Lake to profit from their calm waters and tranquil surroundings. Evolve estimates that a home in the area will bring in, on average, $33,500 a year, with an initial investment of about $425,000, which is the median listing home price.
Smith Mountain Lake, Virginia
While Virginia is home to Lake Anna, which can make investors close to $80,000 in annual income, lakefront homes in the area have unicorn status, and if they do come along, they feature a hefty price tag. Instead, consider Smith Mountain Lake, which boasts a 500-mile shoreline (more than double that of Lake Anna), with waterfront houses in the $500,000 to $1 million range. While that likely still sounds like a lot, you’re looking at more than $33,000 of yearly income. Add to that Virginia’s low property taxes and the region’s natural draw with vacationers, and investing in the Smith Mountain Lake area makes plenty of sense.
Dallas residents love escaping to Granbury for its historic character and outdoor activities, many of them on the water, thanks to Lake Granbury and Brazos River.
Rest assured that a house here is a sound investment. According to Evolve data, properties are booked for more than six months out of the year, so owners can expect to add $28,305 to their yearly income. Of course, if you’re hoping to make more, invest in a house with direct water access, but also be prepared to pay more than the median listing price, which is $394,776 for the area.
Pocono Lake, Pennsylvania
New Yorkers love the serenity and sheer beauty of the Pocono Lake area and all the year-round outdoor activities it offers (skiing, hiking, and fishing, to name a few). So, if you have your eyes on the region, you can count on a steady stream of urban renters seeking a place to escape the hustle and bustle of the big city (the area is about a two-hour drive from Manhattan).
Compared to similar lake destinations, Pocono Lake is also pretty affordable in terms of listing price — $273,682. But Evolve experts recommend hiring an experienced real estate agent familiar with the HOA rules and regulations in this area.
Norris Lake, Tennessee
Tucked away in the foothills of the Cumberland Mountains, Norris Lake has 800 miles of shoreline, two rivers, and several creeks, plus it’s pure heaven for nature and water sports enthusiasts, catering to both adrenaline seekers (waterskiing, anyone?) and those wanting the more quiet, laid-back lifestyle of boating (there are 20 marinas on the lake).
Due to its relative proximity to Knoxville, the region is a popular vacation home destination (it’s the second-largest market for a lake property in the state), but if you house hunt in places such as LaFollette or New Tazewell, you may find a home for under $500,000. And with a cap rate of 4.4%, investors are looking at about $27,000 in potential income.
Lake of the Ozarks, Missouri
Notoriously scenic, the northern part of the Ozarks is home to epic fall foliage, beautiful small towns, and an endless list of recreational opportunities. The lake buzzes with boats during the summer, while golf courses are packed with players. The off-season brings travelers seeking tranquility, stunning lakefront views, and fewer crowds.
Evolve’s data shows that median home values here are a little less than $345,000, with a cap rate of 4.3%. The company’s experts recommend searching for a property in Gravois Mills, Osage Beach, and Lake Ozark to maximize your rental income.
Gilford, New Hampshire
Located on the southern shore of Lake Winnipesaukee, Gilford is the quintessential New England lake town, offering picture-perfect vistas, hiking and biking trails, boating, and a vibrant music scene at Bank of New Hampshire Pavilion, a 9,000-seat concert venue. In the winter, skiers and snowboarders flock to Gunstock Mountain Resort to enjoy its 49 trails and 227 skiable acres.
While waterfront mansions here come with multimillion-dollar price tags and an array of luxe amenities, you can also find more modest homes that are in line with Gilford’s median listing home value of $518,389. You can expect to earn about $30,000 in rental income, which means a cap rate of 4%.
Lake Havasu City, Arizona
Drawing visitors from three states (California, Arizona, and Nevada), Lake Havasu City is a four-season destination set against the dramatic backdrop of the Mojave Desert. The lake offers renters a cooling respite from the hot Arizona sun, along with a wealth of water activities and sandy beaches.
And while home prices are not necessarily on the lower end — the median listing value here is about $500,000 — and waterfront properties are hard to find, if you invest in a residence with at least three bedrooms, a pool, and a shaded patio, your chances of having it rented for long periods of time will significantly increase.
Big Bear Lake, California
Dubbed the “jewel of the San Bernardino National Forest,” Big Bear Lake is a four-season lake destination that treats visitors to gorgeous views, rugged nature, excellent ski facilities, hiking trails, historic sites, and much more.
As you may imagine, it’s not cheap to own property in a place so dreamy and popular as Big Bear Lake, but your investment (the median listing price is $643,468) will pay off, as this is a region that draws vacationers from Phoenix and Las Vegas throughout the year.