Are you looking for a new Airbnb income property to add to your real estate portfolio? If you’re stuck for suitable locations, let’s explain why an Airbnb St Augustine Beach property might be the right direction to head.
The US real estate market has been relatively buoyant over the last couple of years. A significant characteristic of the market almost everywhere has to be the high home prices. Admittedly, they were already on the rise previous to 2020, but prices have gone through the roof ever since the pandemic hit.
Across the entire United States, the median property price rose to over $350,000. This figure is twice what it was one decade previously. In the past twelve months, the cost of an average home rose by almost 20% nationwide. In more than 125 metropolitan areas, the increase was even higher.
We’ve been reliably informed by The Washington Post that this phenomenon is not a bubble, so don’t panic. But the situation is making it increasingly difficult for real estate investors to find great deals.
Such a massive increase in prices and properties in short supply make it vitally important for anyone looking to invest in the Florida housing market to be very careful when real estate investing. With a short-term rental strategy, making sure that the unit you buy will bring a solid return on investment is critical.
In this post, we’ll examine the profit potential of an Airbnb in St Augustine Beach, FL. we\ll explore the following:
- Why you should invest in Airbnb St Augustine Beach this year
- The legalities relating to Airbnb properties in St Augustine Beach, FL
- How to choose the best Airbnb property in St Augustine Beach, FL
If you want to invest in the Florida real estate market and might like to add St Augustine Beach to your portfolio, let’s show you why you should take the next step.
Why Invest in Airbnb St Augustine Beach
There are several factors you should keep in mind when you decide whether a city is worth investing in for short-term rentals like Airbnb:
- Location and reasons to visit
- Historical performance of existing Airbnbs in the area
- Florida real estate market
What is it About St Augustine Beach, FL That People Love?
St Augustine Beach, Florida, is a great place to live, but it’s also a fantastic vacation getaway. It’s just a hop, skip, and jump from any airport. St Augustine is also a perfect family vacation, couples retreat, or girls trip. Let’s share a few reasons why it should be included on anyone’s bucket list:
- It’s rich in US history and is the nation’s oldest city, founded in 1565.
- Disney World is only two hours away, and the coastal weather is terrific.
- You can drink from the Fountain of Youth, a natural spring that’s told to restore the youth of anyone who drinks from it.
- You’ll find examples of fine Spanish Colonial architecture all over the city.
- Travel up and down the A1A, and you’ll be able to stop at one beautiful beach after another.
- Visitors can eat at a different restaurant every night of their vacation and not get bored.
- It’s world-famous for golf, with the PGA headquarters only a 30-minute drive from St Augustine.
- The nightlife is fantastic, with plenty of live music and cool happenings, particularly at the St Augustine Amphitheater that’s right on the beach.
How Airbnb St Augustine Beach Performed in 2021
Here’s a quick list of St Augustine Beach, FL housing and Airbnb data as of January 2022.
- Airbnb Rental Income: $1,806.23
- Airbnb Cash on Cash Return: 2.05
- Airbnb Daily Rate: $224
- Airbnb Occupancy Rate: 49.36
- Median Property Price: $553,963
- Average Price per Square Foot: $433.05
- Days on Market: 70
- Walk Score: 42
The last few months have not been particularly kind for the average Airbnb in St Augustine Beach. The COVID-19 Omicron variant has disrupted travel patterns. However, when you look at stats from 2021, short-term rentals have actually had an excellent year.
- In December 2021, the average monthly Airbnb rental income was as high as $4,271.
- In March and May 2021, the monthly occupancy rate of an Airbnb income property was as high as 80%.
Expectations are that Airbnbs will recover to last year’s recorded figures once the Omicron surge is over and people are traveling again. US borders are also reopening, which means international visitors will want to book vacation homes.
With an Airbnb at St Augustine Beach, they get to enjoy the comforts of home while also enjoying hotel-like facilities. In addition, they can keep interactions with other people to a minimum.
2021 Trends and 2022 Forecast for the Florida Real Estate Market
Anyone investing in real estate will be interested in some trends for forecasts for Florida as these can affect the St Augustine Beach real estate market.
- As of January 2022, the median property price in Florida is $472,557.
- Over the past year, Florida median property prices have increased by almost 24% and nearly 69% over the last five years.
- Florida Realtors report that the median price of single-family homes sold in December was 21% higher than the previous year.
- Single-family homes in Florida spend an average of 77 days on the market before being sold.
- At the end of 2021, active listings for single-family homes were down by almost 34% compared to twelve months ago. As a result, inventory was at a very low one month’s supply.
High property prices in Florida are forcing many people to rethink and even put off their plan of owning a home. Instead, they are more likely to rent an Airbnb home for a month or longer so they can enjoy the local area without making a financial commitment.
For St Augustine Airbnb hosts, this means they should consider accepting longer bookings, at least for the foreseeable future.
The Legalities of an Airbnb in St Augustine Beach
The City Commission adopted rules for short-term rentals in 2019. These regulations deal specifically with short-term vacation rentals. The basic requirements per zoning district are listed below:
- RS-1 & RS-2 Zoning: May be rented for periods of one week or longer with approved registration. Nightly rentals are not allowed in RS-1 and RS-2 zoning.
- HP-1 Zoning: May be rented on a monthly or greater period with approved registration.
- All Other Zoning Districts: May be rented on a monthly or greater period with approved registration.
You can find a property’s zoning district online.
The registration process includes registration fees, annual registration renewal fees, late fees, and inspection fees. The city also made it known that short-term rental property owners must adhere to zoning, parking, and inspection requirements.
The fee structure is based on the number of bedrooms a rental property has, with a base rate of $294.48 plus $73.81 per rental bedroom. In addition, there is a late renewal fee of $100 and a re-inspection fee of $50.
- Studio Rental- $294.48
- One Bedroom- ($294.48 + $73.81) = $368.29
- Two Bedrooms- ($294.48 + $147.62) = $442.10
- Three Bedrooms- ($294.48 + $221.43) = $515.92
- Four Bedrooms- ($294.48 + $295.24) = $589.73
- Five Bedrooms- ($294.48 + 369.05) = $663.54
Property owners must also have a Life Safety Inspection done, performed at the time of registration, and then annually, by the St Augustine Fire Department. Inspectors will be looking for smoke detectors, exit signs, emergency lighting with battery back-ups, and a variety of other safety measures.
One further requirement is that short-term rental operators must provide at least one parking spot per bedroom on site.
Is a Vacation Rental License Essential?
Florida requires any vacation rental owner to apply for a license if they:
- Rent out an entire unit more than three times in a calendar year for periods of less than 30 days or one month at a time.
- Advertise their vacation rental property anywhere, whether it’s online, in print, or any other method.
- Regularly rent out their entire unit exclusively to the public, as opposed to only letting family and friends use it.
Hosts who rent out just a room or a part of their property need not apply for a license as these are not considered by the state to be public lodging.
Choosing the Best Airbnb Investment in St Augustine Beach
1. Decide on the best property type
The location very much dictates the property type you choose. For example, commercial districts will have more business travelers, so apartments or condos on Airbnb are likely to get more bookings.
How many bedrooms and bathrooms also helps determine the type of guests you’ll attract. Family’s or friends traveling together would prefer a rental home with two or more bedrooms. Solo travelers and couples might be more likely to book one-bedroom Airbnbs or studio units.
If you’re not sure what property type is best in St Augustine Beach, FL, you can use Mashvisor’s Neighborhood Analytics feature to find out more. This tool collects data from short-term rental platforms like Airbnb to determine the property type, number of bedrooms, and platform that works best for the area.
2. Set your budget
If you have to pay a high price for a property, you’ll find it more challenging to earn a high return on investment and have a positive cash flow. Setting a budget is therefore vital, and it has to be one that you’re comfortable with and won’t put you at risk of defaulting on your mortgage.
When setting your budget, you should consider more than just the selling price, for example:
- Closing costs
- Repairs and remodeling
- Furnishing
- Business registration
- Other initial costs such as hiring a property management
Make use of the Mashvisor Investment Property Calculator to help you determine the cash flow and profits that income properties can generate. This Airbnb calculator uses the most up-to-date data and trends for its analysis and allows investors to input data to generate highly accurate estimates.
3. Start searching
You can use various sources when looking for an investment property. For example, various online listings, local newspapers, and your local investment network. In addition, Mashvisor has tools such as The Property Finder and Property Marketplace that are very useful when you’re looking for Airbnb St Augustine Beach investment properties.
4. Conduct a thorough analysis
When you’ve found a bunch of houses that meet your requirements and are within your budget, it’s time to narrow down your search even further. The best way to do this is to perform a comparative market analysis. It will help you estimate a house’s fair market value for sale and estimate your returns.
You must first estimate the daily rate or possible Airbnb rental income and the occupancy rate or Airbnb demand to calculate your returns. You can then use these figures to calculate your monthly rental income and multiply it by 12 to get a figure for the year. Next, list one-time and monthly costs related to your Airbnb St Augustine Beach operation and subtract them from your annual rental income.
Once you’ve done this calculation, it will help you determine the cash flow for the first year.
Final Thoughts
You’re likely considering real estate investing because you want to generate passive income. However, don’t forget that the initial stages will always require lots of time and effort. When making your calculations, you also have to be very careful, as one tiny miscalculation could lead to significant losses.
If you want to avoid this risk, consider using a real estate investment tool that helps you search for properties and provides an accurate analysis based on data gathered from reliable sources. One excellent example is the tools from Mashvusor mentioned above.
Mashvisor has created a platform that serves the needs of both beginners and experienced real estate investors. It will very quickly become your go-to resource for finding lucrative investment properties and perhaps an Airbnb St Augustine Beach opportunity.