With the tourism and hospitality sectors now slowly picking up after the pandemic-induced slump, is it wise to invest in Airbnb Clearwater in 2022?
The Florida real estate market is considered among the hottest in the US. Because it is a top tourist destination, it makes perfect sense to invest in a Florida Airbnb. However, not all cities in the same state offer the same opportunities for investors. So, can real estate investors bank on Airbnb Clearwater Beach in 2022?
A Rundown of the Florida Real Estate Market
The Florida real estate market in 2021 was no different from the other housing markets in the US. Home sales reached an all-time high and the demand for houses, whether intended as a primary residence or a Florida investment property, soared to unexpected levels. However, the scarcity in supply pushed property prices up to almost unreachable levels.
People who are in the know believe that demand in 2022 will remain high, but the surge in prices will wane. Mortgage interests are expected to breach the 3.5% mark by the end of 2022, but the figure is still relatively low. How that slight increase in mortgage rate will affect the market is anybody’s guess.
With the 2021 housing market conditions spilling over to the first few months of 2022, at least, we can safely say that it’s still a seller’s market in Florida.
Meanwhile, the following Mashvisor data, as of February 2022, gives us an overview of what it would be like for the Sunshine State housing market.
- Number of Listings for Sale: 28,918
- Median Property Price: $680,781
- Average Price per Square Foot: $400
- Number of Traditional Listings: 93,117
- Monthly Traditional Rental Income: $2,183
- Traditional Cash on Cash Return: 1.88%
- Price to Rent Ratio: 26%
- Number of Airbnb Listings: 44,092
- Monthly Airbnb Rental Income: $3,780
- Airbnb Cash on Cash Return: 3.71%
- Airbnb Daily Rate: $203
- Airbnb Occupancy Rate: 64%
- Days on Market: 90
- Walk Score: 49
Areas of Interest
Florida logged a high price to rent ratio, meaning people who intend to reside in Florida will find it cheaper to rent than buy a property. With the monthly Airbnb rental income that is 73% higher than the monthly traditional rental income, Airbnb rental seems to be an easy choice. The state’s Airbnb occupancy rate, exceeding 60%, further points to Airbnb rental as the more lucrative investment option.
The Clearwater Real Estate Market at a Glance
Mashvisor’s data set for Clearwater Florida is as follows:
- Number of Listings for Sale: 190
- Median Property Price: $656,594
- Average Price per Square Foot: $450
- Number of Traditional Listings: 872
- Monthly Traditional Rental Income: $2,190
- Traditional Cash on Cash Return: 2.40%
- Price to Rent Ratio: 25%
- Number of Airbnb Listings: 940
- Monthly Airbnb Rental Income: $2,867
- Airbnb Cash on Cash Return: 2.51%
- Airbnb Daily Rate: $192
- Airbnb Occupancy Rate: 53%
- Days on Market: 31
- Walk Score: 37
What the Data Means for Airbnb Clearwater FL
The Clearwater real estate market somehow mirrors the state’s overall market profile. The city’s price to rent ratio of 25% indicates that renting is a more affordable option than buying a house.
For investors buying Clearwater investment properties, putting them up as Airbnb rentals would be a better option than traditional rentals. Such an insight is based on the higher monthly rental income for Airbnb than for a traditional rental. Clearwater Airbnb Florida also registered a cash on cash return of 2.51%, about 4.6% higher than the traditional rental cash on cash return of 2.4%. The Airbnb occupancy rate was calculated at 53%, lower than the ideal 60%, but still considered high.
However, Clearwater’s Airbnb monthly rental income of $2,867 is lower than Florida’s $3,780. Similarly, the city’s cash on cash return is 32% lower than Florida’s 3.71%. Clearwater also failed to match Florida’s occupancy rate of 64%.
It means that other cities in Florida, such as Naples or Saint Petersburg, may present better short term rental options than Airbnb Clearwater Florida. But it doesn’t mean the city is not a good place to invest in. Several other factors make Clearwater Florida Airbnb a viable investment option.
Is It Wise to Invest in Airbnb Clearwater?
You’ve seen the Clearwater real estate data. Although the data does not scream at you to invest in one, you need to consider other factors to test if investing in Airbnb Clearwater is a smart move.
Why Invest in Airbnb Clearwater
Savvy investors know well enough not to stop at numbers. They would think about the other factors that would lure people to a neighborhood. Below, we’ve identified several factors a real estate investor should consider when buying a Clearwater investment property.
Clearwater sits along Florida’s breathtaking Gulf Coast, giving Clearwater Beach several miles of sugar-white powdery sand and crystal-clear waters. People who stay here also experience the gentle, refreshing breeze from the Gulf Coast.
The city is highly accessible through air, land, and water. Clearwater is close to two airports: Tampa International Airport, an easy favorite because of the convenience and ease of travel, and St. Petersburg/Clearwater International Airport, which several cities can access.
The Cleveland Street downtown district and the islands of Clearwater Beach are home to boating facilities that allow access to the city. Tourists who want to travel by land can access the Courtney Campbell Causeway/Gulf to Bay Boulevard on Highway 60 to reach Tampa or use the I-75 corridor to connect to other Florida destinations, as well as five other states.
Families on vacation will also find it delightful that Clearwater is only 90 miles away from Orlando, home to Disneyland.
The city is blessed with pleasant weather all year long and days of sunshine regardless of the season. The temperature is comfortable even during the winter, and the summer heat is something beach enthusiasts would gush about.
The cost of living in Clearwater is lower than Florida’s and the national average. Property prices and rents are relatively lower in Clearwater than in other cities in the US. However, utilities are costlier than the national average, mainly because of the use of air conditioning units during its hottest days.
A Bustling Economy
Tourism is the main driver of Clearwater’s economy, and with about five million visitors drawn to it yearly, it’s no wonder that the city boasts a robust economy. Additionally, Clearwater is home to the biggest names in the corporate world, such as Amazon, Walmart, Deloitte, Citi, PwC, and Verizon, to name a few. Since the companies are multi-located, expect employees from the headquarters or other branches to visit the Clearwater offices. And that would be adding to the city’s number of visitors.
Things to Do
Clearwater’s calendar of activities never runs out of fun things to do. Every night, Pier 60 features performers and arts and craft vendors to entertain guests as they wallow in the splendor of the Gulf sunset. In addition to the said activities, visitors can participate in other pursuits, such as biking, hiking, beach sports, water sports, boating, and more.
Although the city is famous for its fresh seafood, tourists may also look forward to various dining options. They can relax and delight in comfort food or dress for a classy and expensive fine dining experience.
The factors cited above show why Clearwater beach rentals are potentially lucrative investments. Should you decide to convert your Airbnb Clearwater property into a traditional rental property, there will still be a demand for it, especially because there is no personal income tax in Florida. Property taxes in Clearwater are also lower. You may even decide to keep the property as your primary or secondary residence and still enjoy the many benefits of living in Clearwater.
What Are the Challenges of an Airbnb Clearwater Investment?
Investing in Airbnb Clearwater offers a lot of benefits for the interested. But let’s not forget that there are always two sides to a coin. So, what could discourage you from investing in Clearwater?
Prone to Pests
The city’s warm weather and humidity may subject your rental property to critters and pest infestation. The pest damage to your property would mean additional expenses to prevent infestation and repair the damage. Failure to address the issue may subject you to a negative review from guests.
Lack of Public Transportation
Clearwater may be accessible to various types of transportation, but it lacks public transportation. The city’s walkability score is also low at 37. It can deter renters who intend to move from place to place during their short stay in the city. They can rely on Lyft, Uber, or other rideshare services, which can be expensive.
As an investor who needs to go to the rental property, especially in-between guests, you need a car to get there and do your stuff.
Airbnb Clearwater Regulations
Airbnb is legal in Florida, but some restrictions might affect your return on investment. Here are some of the laws that govern Airbnb Florida. Check your state and county governments for a complete list of short term rental regulations.
- The city does not permit residential property owners to rent their property for a period of fewer than 31 days or a calendar month. Advertisements for short term rental properties are only allowed for monthly rentals.
- All vacation rentals located in Florida must obtain a license from the Florida Department of Business and Professional Regular (DBPR). However, the regulation does not apply to short term rentals where the host stays in the home. So, if you are renting out a room only and sharing common spaces like the kitchen, you don’t need to acquire a license. A vacation rental license must be displayed where it can be easily seen.
- The Airbnb hosts need to maintain housekeeping and hygiene standards.
- Airbnb collects standard short term rental taxes from guests and remits them to the state. However, you will be responsible for collecting and paying other taxes that your county or city may require. You are entitled to a Homestead Exemption if your vacation rental is your primary residence.
So, is it wise to invest in Airbnb Clearwater? We can’t say for sure. What we’ve covered is just a scratch on the surface. Next step: Find the best location and property for Airbnb Clearwater.
5 Best Places to Invest in Airbnb Clearwater
If you are unsure where to invest or how to invest in real estate, we’ve got you covered. We’ve identified for you the top 5 best places for Airbnb Clearwater.
The list below is arranged from highest to lowest Airbnb cash on cash return, the primary criterion for building the list. We also considered the median property price, the number of Airbnb listings, and the occupancy rate.
1. Keystone Manor
- Median Property Price: $442,773
- Average Price per Square Foot: $267
- Number of Airbnb Listings: 153
- Monthly Airbnb Rental Income: $3,695
- Airbnb Cash on Cash Return: 5.75%
- Airbnb Daily Rate: $145
- Airbnb Occupancy Rate: 49%
- Days on Market: 29
- Walk Score: 75
2. Sunshine Tower Apartment HOA
- Median Property Price: $297,580
- Average Price per Square Foot: $290
- Number of Airbnb Listings: 206
- Monthly Airbnb Rental Income: $2,542
- Airbnb Cash on Cash Return: 4.25%
- Airbnb Daily Rate: $123
- Airbnb Occupancy Rate: 46%
- Days on Market: 27
- Walk Score: 64
3. Brentwood Estates
- Median Property Price: $324,200
- Average Price per Square Foot: $279
- Number of Airbnb Listings: 135
- Monthly Airbnb Rental Income: $2,008
- Airbnb Cash on Cash Return: 3.60%
- Airbnb Daily Rate: $147
- Airbnb Occupancy Rate: 57%
- Days on Market: 35
- Walk Score: 46
4. Sunset Lakes Estate HOA
- Median Property Price: $329,000
- Average Price per Square Foot: $286
- Number of Airbnb Listings: 128
- Monthly Airbnb Rental Income: $2,225
- Airbnb Cash on Cash Return: 2.91%
- Airbnb Daily Rate: $144
- Airbnb Occupancy Rate: 53%
- Days on Market: 56
- Walk Score: 41
5. Old Clearwater Bay Neighborhood Association
- Median Property Price: $457,225
- Average Price per Square Foot: $331
- Number of Airbnb Listings: 118
- Monthly Airbnb Rental Income: $2,056
- Airbnb Cash on Cash Return: 2.41%
- Airbnb Daily Rate: $156
- Airbnb Occupancy Rate: 56%
- Days on Market: 71
- Walk Score: 37
Find Your Airbnb Clearwater Property Using Mashvisor Tools
Suppose you decide to go ahead and invest in Airbnb Clearwater. You need to decide which of the available short term rentals to purchase. To do it, you will need Mashvisor’s real investment tools to crunch numbers for you. Here are some of the tools you will need. But first, sign up for Mashvisor to avail yourself of your free trial.
Let’s say you’d like to look into a neighborhood in Clearwater that is not included in our list. You may do your own location search by typing in “Clearwater FL” or the name or zip code of a specific neighborhood you’ve set your sights on. You will be redirected to the neighborhood map. From there, you can set a filter based on your goal to activate the Airbnb heatmap. You can choose from among the following filters:
- Listing Price
- Airbnb Cash on Cash Return
- Airbnb Monthly Rental Income
- Airbnb Occupancy Rate
Once you’ve chosen a filter, a color-coded map will be displayed. The green areas indicate the high-performing locations based on your selected criterion, and the red ones are the low-performing areas. Be careful, though. If you choose Listing Price as your filter, you should be looking at the red-shaded areas; otherwise, you will be selecting from properties with high listing prices.
Related: What Is a Good Cash on Cash Return?
Mashvisor’s property finder tool provides you with a list of properties in your chosen location that match your preferences. You just need to customize your search by setting filters, such as your budget, your preferred rental strategy (in this case, Airbnb), the type of property (single family, condo, etc.), and the number of bedrooms and bathrooms.
Rental Property Calculator
The rental property calculator provides valuable market insights relevant to the shortlisted properties. It analyzes a property’s profit potential and guides you on the best option for financing your investment property.
Mashvisor will display the best options for your Airbnb investment property using its algorithm. It will also display important metrics such as:
- Listing Price
- Rental Income
- Cash Flow
- Cap Rate
- Cash on Cash Return
- Occupancy Rate
We’ve shortlisted the best Airbnb Clearwater properties for you. All you need to do is select the property and get ready to purchase it.
Making Airbnb Clearwater Work For You
You’ve done your research on Clearwater, selected a neighborhood and a property for your Airbnb investment, and bought the property. Let’s also say that you’ve acquired the license to operate as an Airbnb. Now, the hard work begins. How do you ensure your short term rental property attracts guests so that it does not remain vacant for a long time?
1. Work on your Airbnb listing.
You’d like people to know that your property operates as a short term rental, so you need to get it listed on relevant platforms. What should your listing contain?
Accurate Property Description
Your description must be complete and accurate. Use vivid words to describe it to help potential guests imagine what it looks like. However, do not exaggerate to avoid raising false expectations. Think of all the possible profiles of your guests. What would they be interested in if they had a toddler with them? What if the guest is a person with disability. What would they look for? Include such information in your listing. If the space you rent is on the second floor and the only access is through stairs, mention that in the listing. People would appreciate your honesty.
Mention what areas of interest are near your property. Highlight what makes your Airbnb different from the other short term rentals in your area.
Spruce up your place before taking photos of your rental property. Take at least one photo of each area. Use natural lighting or add to it if you think the place is dark. Get people you trust to check out the photos before posting them and re-shoot if you need to. If you need to solicit the help of someone who can take photos better than you do, by all means, get that help.
2. Be prompt in answering inquiries.
When your property appears on the online platforms, be prepared to answer calls, emails, or whatever channel you included in your listing. Answer inquiries promptly. The quicker you reply, the better your chances of winning guests. Sound enthusiastic about your property when you reply to them. Be friendly even if the potential client is not. Do not forget to thank the person for inquiring.
3. Give your guest a warm welcome.
Be sure to get all booking details correctly. Let’s assume the person who inquired decided to book a month-long stay with your property. Ask their purpose for their visit, and note important details such as birthdays or anniversaries. Buy them a cake or something to celebrate the occasion, or you can prepare some snacks to welcome them on their arrival.
4. Keep communication lines open.
If you are not staying in the same house, let your guests know how to reach you if they need anything from you. Again, be quick to respond if they get in touch with you. Take your cue from your guests when it comes to communicating with them. Some guests may be chatty; then spend some time talking with them. Otherwise, limit your communication with them to a reasonable level.
5. Take your guests’ reviews seriously and improve your Airbnb rental as needed.
It’s always nice to get positive reviews, but don’t be discouraged if you receive negative reviews. The unfavorable reviews represent opportunities for you to learn and improve how you run your Airbnb investment.
Depending on how successful you are and your investment goals, you may find yourself buying another property for Airbnb Clearwater.
Clearwater, Florida is a well-loved vacation spot because of its awesome beaches and the abundance of fun activities that it offers. However, despite the city’s healthy real estate market, data shows that the Airbnb Clearwater market may not be as lucrative as other Florida cities.
The above data invites you to weigh the pros and cons of investing in Airbnb Clearwater. It also prompts you to search for the right neighborhood and the best property to achieve your desired return on investment. Mashvisor’s tools can help you do it.
However, Mashvisor can only go as far as calculating important metrics. We will point you to locations and properties that will give you an attractive income, but the success of your rental still lies in your hands.
Airbnb Clearwater: Should you invest in 2022? Yes, but that will also depend on how much time and effort you are willing to put into it.
If you are interested in investing in Airbnb Clearwater, schedule a free demo with us to get started.