Best Places to Buy a Vacation Home: A Global Shortlist

Where a second home earns its keep — the four tests we apply before shortlisting any market, a global shortlist by region, and India’s strongest markets in detail.

Most "best places to buy a vacation home" lists are really lists of nice places to go on holiday. The two are not the same thing. A market can be beautiful, well-connected and still a poor place to own — because the rental season is eight weeks long, because foreigners cannot hold the freehold, or because the only buyers on the way out are the same handful of people who bought on the way in.

This is the shortlist we would actually work from, and the tests behind it.

The four tests

1. How deep is the rental demand, and how long is the season? A market with a twelve-week peak and nothing either side needs roughly three times the nightly rate to match a market that lets year-round. Goa, Dubai and the Algarve all run long seasons. Alpine and most hill-station markets do not. Ask for occupancy by month, not an annual average — the average hides the shape.

2. Can you own it outright, and what happens at the border? Freehold for non-residents is the exception, not the rule. Thailand caps foreign ownership of a condominium building at 49% and bars foreigners from land. Indonesia works through leasehold and Hak Pakai rather than freehold. India restricts agricultural and plantation land to residents, and NRIs and OCIs buy under FEMA rules that are workable but specific. Europe is mostly open, with Golden Visa routes narrowing. Establish this before you fall in love with a plot.

3. What is the true cost of getting there? A property four flights away is a property you will visit twice a year and rent through a manager you rarely meet. The strongest second-home markets are almost always a short hop from a large, wealthy feeder city — which is exactly why Alibaug works for Mumbai and the Algarve works for London.

4. Who buys it from you? The exit is the test most buyers skip. A market where the resale audience is only foreign buyers is a market that stops dead when the currency moves or the visa rules change. The resilient ones have a domestic buyer underneath the international one.

The global shortlist

Southern Europe — the long-season default. Portugal and Greece still carry the best combination of rental depth, open ownership and genuine year-round liveability, with Italy close behind for buyers who care more about use than yield. Portugal is the one we cover in most depth — start with the Portugal guide — and Greece and Italy have guides of their own in the Europe edition. Malta and Cyprus are the smaller, more regulated alternatives.

The UAE — the yield case. Dubai remains the outlier on gross rental yield among developed markets, with no property tax and full freehold in designated zones. The trade is supply: new stock arrives constantly, so the specific building matters more than the city. See the UAE edition.

South East Asia — high returns, structural caveats. Bali and Thailand both produce strong nightly rates and both require you to be genuinely comfortable with leasehold or a company structure. Worth it for many buyers; a poor fit for anyone who needs a clean freehold title. The South East Asia edition covers both.

The Caribbean — use, plus a passport. Several markets pair a holiday home with a citizenship-by-investment route, which changes the arithmetic entirely if the second passport has independent value to you. Otherwise the seasons are short and the carrying costs high. See the Caribbean edition.

India — the deepest domestic demand of any market on this list. Covered below.

The comparison tool puts the ownership rules for these markets side by side.

India in depth

India is the market where the fourth test — who buys it from you — is answered most convincingly, because the domestic buyer pool is enormous and growing. These are the locations worth the shortlist.

Goa. Still the strongest single vacation-home market in the country, and the only one with a genuinely international rental audience alongside the domestic one. The season runs roughly October to March at premium rates with a workable monsoon shoulder, and the restaurant, healthcare and flight infrastructure is now good enough to live in full time rather than merely visit. North Goa carries the higher yields and the higher prices; South Goa is quieter, cheaper and slower to resell. Title diligence matters more here than anywhere else in India — see the Goa destination brief for the FEMA position and the villages that still have stock.

Alibaug. The Mumbai weekend market, and the clearest illustration of test three: proximity to a wealthy feeder city beats almost every other variable. The ferry and the coastal road have compressed the journey to the point where a Friday evening departure is realistic, which is what sustains the weekend rental rates. Plotted villa developments dominate.

Lonavala and Khandala. The same logic serving both Mumbai and Pune off the expressway. Short season, reliable weekend demand, and a resale market that is almost entirely domestic — which is a strength, not a weakness.

Coorg and the Western Ghats. Estate and plantation country, with the important caveat that agricultural and plantation land carries ownership restrictions that catch out buyers who assume a villa plot and an estate are the same purchase. Boutique homestay conversions are where the returns are.

Himachal — Shimla, Kasauli, Manali. Accessible from Delhi and the NCR, good weather, genuine scarcity of legal buildable land. Himachal restricts land purchase by non-agriculturists, which is the single most important thing to establish before proceeding.

Nainital and Uttarakhand. The Delhi equivalent of Lonavala. Rental income potential is thinner than the Goa or Alibaug markets, and the state has tightened land rules for outside buyers in recent years.

Kerala. Best understood as a retirement or eventual-relocation market rather than a rental one — strongest for buyers with existing family ties to the state. The coastline is covered in more detail in our guide to the top locations to buy a beach home in India.

The metro edge — Gurgaon, Noida, Bandra, Powai. These are not really vacation homes; they are city apartments with resort amenities and a year-round rental market. They behave like a different asset class, and they are priced accordingly.

Where to start

If you are early, the India edition covers current pricing across these markets and the buyer's path sets out the sequence. And whichever market you land on, what happens after completion — management, letting and the tax position — is where most of the return is actually won or lost.