Taking on an investment opportunity can be risky – especially if you take a closer look at the situation on some real estate markets at the moment.
Trends are changing rapidly, and investors are finding it hard to keep up with the predictions that are being thrown their way. What may have been a clean strike for investing last year in 2022 could be considered a financial mistake.
That being the case, we’ll be focusing on investment in Airbnb Pensacola and answering the following question:
Is Pensacola worth your time and money, or not?
The decision before you is not an easy one. So, take this chance to go through the basics of Pensacola and hopefully resolve the issue of whether it’s something you’d consider investing in 2022.
Florida Airbnb Rules & Regulations
When it comes to any real estate investing, potential investors must not overlook the traditional part of Airbnb – that is, the legal side of it. After all, there comes the point when you simply have to get down to the rules and regulations of a particular market.
In this case, we’re referring to Airbnb Pensacola, FL.
You should know that vacation rentals, including Airbnb income property, must be licensed by the Florida Department of Business and Professional Regulation.
However, it’s not enough to have a paper that gives you permission to list your Airbnb. Any units that fall into this category must be approved on the basis of hygiene and maintenance, too.
What Are The Short-Term Requirements?
As far as Airbnb Pensacola goes, once you’ve obtained a license, your Airbnb must maintain a certain standard in order for you to be in business.
As you might’ve guessed yourself, since you have invested in accommodation, you have to make it look presentable. Maintaining your investment property includes regular cleaning, an inspection of the place from time to time, checking utilities regularly, and so on.
That might not sound too demanding at first glance. However, hosts could easily end up in a situation where they are at risk of losing their license due to non-compliance with some basic rules, and above all – dissatisfied guests.
Paying Taxes In Pensacola
Whether it’s a hotel, a motel, or a short-term rental, it implies the same thing – making money based on accommodation. So, hosts provide their guests with “a bed” in exchange for cash – or, in other words, they’re getting a return on investment out of it.
Someone, unfortunately, has to apply the “bed tax” to this.
That said, property owners who have been renting their place to an individual or a family for six consecutive months (or more) will not have to pay taxes. Renters who had people staying less than 185 days on their property, on the other hand, will be taxed.
We get it. Florida is more of a vacation place – and so you’re interested in the tax rate.
The current tax on the Florida housing market is about 6%.
So, every time your guest(s) make a booking that is shorter than the period we mentioned, expect to pay your obligation to the state of Florida, which is, again, not that bad compared to some other states in the US.
Our advice, especially for Airbnb Pensacola, is to sit down and have a talk with a tax expert who can give you some clear guidelines when it comes to tourism development and property management.
Of course, there will always be individuals who will try to evade the obligation of paying taxes. Even though that might slide for a couple of months – providing that the property doesn’t attract as much attention – it’s only a matter of time before the authorities catch up.
And once they do, your career as an investor and a host won’t have a future.
You are essentially risking a fantastic opportunity of making money in real estate in such a favorable, vacation-oriented location. Our advice is to respect the law!
Pensacola Real Estate Market: Current Situation
Planning your short-term rental strategy won’t make much – if any – sense if you don’t look at the numbers first.
The situation in the Florida real estate market changes with the seasons, so it can be pretty helpful to have a fresh insight into the current statistics.
Let’s take a look at the current situation with Airbnb Pensacola:
- Airbnb Rental Income: $4,653,01
- For Sale Listings: 359
- Airbnb Listings: 1,012
- Airbnb Daily Rate: $213
- Occupancy Rate: 64.58%
- Traditional Rental Income: $1,836
- Airbnb CoC Return: 4.39%
- Median Price For Property: $732,580
- Property Price Per Square Foot: $343,93
- Days On The Market: 116
Neighborhoods To Consider
Airbnb Pensacola is still a broad term for someone who is unsure of the location where they would like to realize their plans for investing.
Luckily, we’ve taken the time to single out some of the best neighborhoods where you could expect significant Airbnb rental income.
If you’re in doubt, here are some choices for you to consider:
First on the list is Downtown Pensacola, with its remarkable European history. It’s perhaps one of the top locations in Pensacola Airbnb-wise. Popular tourist attractions and places of interest include Historic Pensacola Village and Plaza Ferdinand.
Baymarc is more of a tourist than a living option. This part of Pensacola is well-known for its frequent festivals and organized baseball tournaments that young people seem to enjoy.
For someone looking to invest in a quieter area of Pensacola, Cervello might be the perfect location.
This area is known for its well-lit streets, friendly community, and overall family-oriented atmosphere.
Like Cervello, Goulding is a second choice for those looking to invest in generally safe areas with a focus on community events. That is a very tempting opportunity for newly established families or employees.
Sunny Ridge is somewhere between a tourist destination and a peaceful family area. It is a relatively quiet destination known for its walkability, low noise levels, and community events.
The Kensington area is vibrant, and it’s famous for its beautifully maintained parks, shopping centers, schools, and libraries. With all its attractions, it could be suitable for all age groups.
As far as choosing the exact neighbor for Airbnb Pensacola goes, that is entirely up to you – and your personal plans.
Overall, Airbnb demand is high in Pensacola. Still, all potential investors should first work out their plan before taking out a loan.
Don’t leave anything to question.
Take this opportunity to check out Mashvisor’s Rental Property Calculator.
Our Airbnb calculator is designed to provide potential investors with a better insight into the current state of the market and help them assess the profitability of the desired location.
Leave it to Mashvisor to handle all the numbers and statistics for you – and expect a positive cash flow in return.
Mistakes To Avoid
Investing in real estate is not something you can do with your eyes closed.
At times, this business can become complicated – and investors are often the ones to suffer the consequences.
Nonetheless, we can all agree that some mistakes can be predicted and prevented.
That’s why we’re going to mention a couple of common ones that most investors make when investing in Airbnb Pensacola. So, pay close attention!
No Cash Up-Front
People say that “money makes the world go round” – and, well, it is essential if you want to make a successful Airbnb Pensacola investment, especially in Florida, where you have to be in sync with the money available.
You must check your credit score, get your budget in order, compare loan options, and, most importantly, consider any collateral.
Many investors choose to invest their personal savings without giving it any thought. It won’t do you any good; it’ll only lead to even more significant problems and drag you into debt.
When it comes to investing in Airbnb, the best start would be turning to multiple lenders and researching their terms and conditions.
Expecting Success Overnight
We’re completely honest with you when we say that investing in real estate is no lemonade stand. This business takes sacrifice, patience, and willingness.
It often happens that investing in Airbnb is presented as an overnight success – and that all potential investors can expect a high return on investment as soon as they flip the house or list their Airbnb.
Before you get carried away, no, that’s not the case at all. On the contrary, Airbnb needs to be taken seriously. You need to work on your strategy first – and be familiar with profitability estimates.
It is essential not to give up as soon as you encounter an obstacle for the first time.
Investing Without Research
Trust your intuition, but also trust software tools that handle numbers, statics, and locations for your Airbnb business.
You must be open to different possibilities, but at the same time, you have to take this seriously. If you rely only on other people’s recommendations, unverified reports, and your “estimates” – you’re not going to come out on top with your income.
You need concrete numbers – and Mashvisor has already offered a tool that could help you save hours of scrolling through data manually.
Up to 70% of investors decide to start their career by flipping houses for profit – and there is nothing wrong with that.
It’s all great until one or two good opportunities deceive the investor that there’s no room for failure and that there’s no way that they’re going to lose money in the process.
Unfortunately, greed is often one of the main reasons why the short-term rental strategy has failed.
Let’s assume that the expected profit for a rehab project is $20,000. You shouldn’t expect to make more than $10,000. Why? Because it’s a considerable risk for the rehabber to embark on such a project in the first place.
Why Invest In Pensacola?
All things considered, yes, Airbnb Pensacola presents a good opportunity for investors, and here are a couple of reasons why that is the case.
Property or home appreciation refers to an increase in the value of that property over some time. That means that the investor who purchased a property in a particular location has the opportunity to earn more money by selling it, flipping it, or renting it on a monthly basis.
Home appreciation is location-dependent, though, and naturally, not all locations are equally favorable in terms of appreciation.
The Pensacola real estate market is convenient because Florida has always been a popular tourist destination. It’s expected that different kinds of real estate in that area would grow in appreciation over time.
If we’re talking actual numbers, home appreciation in Florida has grown by almost 40% over the last decade.
Favorable Economic Situation
Florida’s one of the states with the most favorable economic situation in the US.
That can be primarily attributed to its tourist attraction. Florida attracts about 2 million tourists a year – and that opens up opportunities for long-term growth.
Even if the residents are not engaged in tourism, the money is still being invested in popular sectors such as healthcare and manufacturing.
All in all, you’d be investing in an economically stable state.
Although we are talking about Florida, real estate is actually affordable if you navigate the right neighborhood.
In the case of Airbnb Pensacola, you’ll be able to find properties that will allow you a high return on investment – as long as you’re looking in the right places and using the right tools.
To some, this seems like a gamble, but it’s not – it’s all about having an established strategy.
Airbnb Pensacola Investing: Final Thoughts
We’ve covered the extensive topic of investing in the Pensacola real estate market and the advantages and disadvantages that come with the opportunity.
Let’s just quickly go over the most crucial facts once again.
Generally speaking, investing in Pensacola, Florida, does present an opportunity for future investors to make long-term profits, especially with Airbnb. When you look at the numbers, the occupancy rate is almost 65%.
Before finalizing your decision, do extensive research and avoid potential mistakes, such as expecting overnight success and investing blindly.
Mashvisor is here to help you make the right calls – and pinpoint the perfect location for your future investment.
So, if you’re ready to expand your real estate portfolio in 2022 and take on new investment opportunities, reach out to us – we’d like to hear from you!