Top 12 U.S. Lake House Purchase Hotspots

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.

Consequently, it’s no wonder lakefront properties are an increasingly popular real estate investment. However, 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 analyzed 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, explained. “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.”

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 destination boasts a bustling cultural scene with year-round activities, events, markets, and festivals, only adding to its appeal for 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, Missouri

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. 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. Furthermore, 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, 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 yield, 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 generate close to $80,000 in annual income for investors, lakefront homes in that area are rare and priced high. 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 still sounds like a lot, you’re looking at more than $33,000 of yearly income. Virginia’s low property taxes, combined with the region’s appeal to vacationers, make investing in the Smith Mountain Lake area a wise decision.

Granbury, Texas

Dallas residents escape to Granbury for its historic character and outdoor activities, especially on the water, thanks to Lake Granbury and the 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, those hoping to maximize their earnings should consider investing in homes with direct water access, though they may have to pay more than the median listing price, which is $394,776 for the area.

Pocono Lake, Pennsylvania

New Yorkers cherish the serenity and beauty of the Pocono Lake area, along with the year-round outdoor activities it offers, such as skiing, hiking, and fishing. Therefore, investors can count on a steady stream of urban renters seeking a place to escape the hustle and bustle of the big city, as the area is about a two-hour drive from Manhattan.

Compared to similar lake destinations, Pocono Lake is also quite affordable in terms of listing price — $273,682. However, Evolve experts recommend hiring an experienced real estate agent familiar with local HOA rules and regulations.

Norris Lake, Tennessee

Tucked away in the foothills of the Cumberland Mountains, Norris Lake boasts 800 miles of shoreline, two rivers, and several creeks, making it a paradise for nature enthusiasts and water sports lovers. It caters to both adrenaline seekers and those who prefer a more laid-back lifestyle of boating, as there are 20 marinas on the lake.

Due to its proximity to Knoxville, the region is a popular destination for vacation homes. If you house hunt in places like LaFollette or New Tazewell, you may find a home for under $500,000. Moreover, 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 countless recreational opportunities. The lake buzzes with boats during the summer, while golf courses are packed with players. The off-season attracts 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%. Therefore, experts recommend searching for properties 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 winter, skiers and snowboarders flock to Gunstock Mountain Resort to enjoy its 49 trails and 227 skiable acres.

Although waterfront mansions here come with multimillion-dollar price tags and an array of luxe amenities, modest homes aligned with Gilford’s median listing value of $518,389 can still be found. 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 serves as a four-season destination situated 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.

While home prices are not on the lower end — the median listing value here is about $500,000 — waterfront properties are hard to find. Yet, if you invest in a residence with at least three bedrooms, a pool, and a shaded patio, your chances of having it rented for extended periods 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 more.

As you may imagine, it’s not cheap to own property in a place as dreamy and popular as Big Bear Lake. However, this is a region that attracts vacationers from Phoenix and Las Vegas throughout the year, making the median listing price of $643,468 a worthwhile investment.