Investor BlogsThe Best Places to Buy a Vacation Home in Florida in 2018 by Daniela Andreevska March 31, 2018February 16, 2019 by Daniela Andreevska March 31, 2018February 16, 2019There are many ways to start a career in real estate investing, and buying a vacation home might be the easiest one of them. Buying a second home provides you not only with a homey experience in your favorite location during your annual vacation but also with the opportunity to rent it out for the rest of the year to start making money in real estate investing. Not to mention the tax deduction benefits which you can enjoy from owning a vacation home.When talking about vacations, Florida is definitely a top location in the US housing market. However, the Sunshine State is so vast and so diverse that it is not enough to just say that you should buy a second home in Florida. You as a real estate investor also have to know which the best places to buy a vacation home in Florida are. Just keep reading and you will figure out soon which the best places to buy a vacation home in Florida are.To learn more about the Florida real estate market trends for summer 2018 provided by 16 industry experts, read this article by Fit Small Business.How Do We Define the “Best Places to Buy a Vacation Home in Florida”?To be clear from the start, we first have to define what we mean when we say the “best places to buy a vacation home in Florida”. Since we are talking about renting out a second home or a vacation home, we should be thinking about Airbnb as the optimal rental strategy. An Airbnb rental will allow us to use our investment property as a location for our own vacation each and every year while also allowing us to rent it out for the time of the year when we are not there. A traditional rental simply cannot do the job.Before deciding to invest in an Airbnb rental property, read our blog “Four Things to Consider Before Purchasing an Airbnb Investment Property”.Second, since we are talking about the “best places to buy a vacation home in Florida” to use as an Airbnb rental, we should look at the Airbnb return on investment – or profitability – which various locations across the Sunshine State offer. There are many real estate metrics which measure the profitability of rental properties including rental income, capitalization rate (or cap rate, for short), cash on cash return (or CoC return, for short), etc. Here, when searching for the best places to buy a vacation home in Florida, we will focus on the Airbnb cap rate as the most popular metric of profitability in real estate investing.What Is Cap Rate?Quickly, before we start exploring the best places to buy a vacation home in Florida, let’s go over what is cap rate. Cap rate (or capitalization rate) is the net operating income (NOI) of an investment property over the current market value of the rental property. Every real estate expert and even some novices will point out the one big disadvantage of the cap rate as a measure of profitability in real estate investments. The cap rate does not take into account the method of financing (all in cash or mortgage) when calculating the return on investment. Realistically speaking, very few real estate investors manage to buy rental properties all in cash, so the method of financing is an important factor when it comes to return on investment. However, it is also very specific to each and every real estate investor’s case what proportion of the investment property will be paid in cash and what through a mortgage. Thus, using the cap rate simplifies things. Using the cap rate is a straightforward way to decide which place is better than the rest.Since we are talking about cap rate, we have to ask another important question before we move to the best places to buy a vacation home in Florida: What is a good cap rate for investment properties? Well, most real estate experts would tell you that anything above 8-12% is a good cap rate. However, we have to be realistic. The world of real estate investing has become so competitive that anything above 5-6% in terms of a cap rate is excellent.What Data Do We Use?In our ranking of the best places to buy a vacation home in Florida based on Airbnb cap rate, we use data computed by Mashvisor’s investment property calculator. Mashvisor’s rental property calculator uses traditional and predictive analytics to provide accurate and reliable estimates of the expected rental income, rental expenses, cap rate, cash on cash return, and occupancy rate for both Airbnb rentals and traditional rentals. Thus, this real estate investing tool eliminates the need to conduct complicated and tiresome real estate market analysis and investment property analysis.What Are the Best Places to Buy a Vacation Home in Florida in 2018?To answer this question, let’s take a look at the most profitable locations for buying and onwing a second home across the Sunshine State, those which offer the highest Airbnb cap rate according to Mashvisor’s rental property calculator:To start your free 14-day trial with Mashvisor to find the best investment properties in Florida, click here.1. Lake WorthMedian Property Price: $83,000Airbnb Rental Income: $1,560Airbnb Cap Rate: 10.6%Airbnb Cash on Cash Return: 10.6%Airbnb Occupancy Rate: 51.6%Traditional Rental Income: $950Traditional Cap Rate: 2.3%Traditional Cash on Cash Return: 2.3%Lake Worth is #1 among the best places to buy a vacation home in Florida, according to data from Mashvisor’s investment property calculator. The expected Airbnb cap rate is excellent, mostly as a result of the highly affordable property prices. Lake Worth is a city in Palm Beach County in Florida, which lies on the Lake Worth Lagoon. Lake Worth is home to a vibrant Florida community, which makes it an ideal place for spending your vacation and thus a top location for owning an Airbnb rental property.2. Briny BreezesMedian Property Price: $152,000Airbnb Rental Income: $1,880Airbnb Cap Rate: 8.2%Airbnb Cash on Cash Return: 8.2%Airbnb Occupancy Rate: 37.5%Traditional Rental Income: $1,300Traditional Cap Rate: 3.9%Traditional Cash on Cash Return: 3.9%Briny Breezes is the second among the best places to buy a vacation home in Florida. This small coastal community is comprised of less than 500 mobile homes but still offers excellent Airbnb cap rate, a result of affordable median property price and high Airbnb rental income. If you are looking for a non-typical location to buy a rental property, Briny Breezes might just as well be the right place for you.3. Weeki WacheeMedian Property Price: $250,000Airbnb Rental Income: $2,760Airbnb Cap Rate: 8.1%Airbnb Cash on Cash Return: 8.1%Airbnb Occupancy Rate: 59.5%Traditional Rental Income: $1,410Traditional Cap Rate: 3.1%Traditional Cash on Cash Return: 3.1%#3 in our ranking of the best places to buy a vacation home in Florida according to data from Mashvisor’s rental property calculator is Weeki Wachee. Before you decide to buy an investment property there to spend your vacations and to rent out on Airbnb, you should know that in 2016 this location has a population of 13! Still, it’s an excellent place if you wonder where to invest in real estate in 2018 for high Airbnb cap rate in the Sunshine State.4. Port RicheyMedian Property Price: $130,000Airbnb Rental Income: $1,720Airbnb Cap Rate: 7.9%Airbnb Cash on Cash Return: 7.9%Airbnb Occupancy Rate: 54.3%Traditional Rental Income: $840Traditional Cap Rate: 2.2%Traditional Cash on Cash Return: 2.2%If, on the other hand, you are looking for a location which is a bit bigger for your next real estate investment, you could consider Port Richey, the fourth among the best places to buy a vacation home in Florida in 2018 for Airbnb cap rate. The benefits of investing in real estate in Port Richey also include affordable property prices, which makes it an ideal location for beginner real estate investors who don’t have much cash to buy an investment property yet.If you are wondering what were the top locations to invest in an Airbnb rental property in Florida around the same time last year, read our blog “The 7 Best Places to Buy a Vacation Home in Florida”.5. HolidayMedian Property Price: $132,000Airbnb Rental Income: $1,610Airbnb Cap Rate: 7.9%Airbnb Cash on Cash Return: 7.9%Airbnb Occupancy Rate: 42.7%Traditional Rental Income: $940Traditional Cap Rate: 2.8%Traditional Cash on Cash Return: 2.8%Another location you could consider for buying a rental property is Holiday. After all, Holiday just sounds as the right place to have a second home and an Airbnb rental property. No wonder it is among the best places to buy a vacation home in Florida. Once again, it is very affordable in terms of property prices, while the Airnbb rental income is high enough to result in an excellent Airbnb cap rate.6. BrandonMedian Property Price: $230,000Airbnb Rental Income: $2,840Airbnb Cap Rate: 7.5%Airbnb Cash on Cash Return: 7.5%Airbnb Occupancy Rate: 60.7%Traditional Rental Income: $1,410Traditional Cap Rate: 2.4%Traditional Cash on Cash Return: 2.4%If you are looking for a bigger location to invest in real estate in the Sunshine State in 2018, Brandon might be the right place for you. It is #6 among the best places to buy a vacation home in Florida according to data from Mashvisor’s rental property calculator, in terms of Airbnb cap rate. While the median property price is a bit higher in Brandon than in the previous locations in our ranking, so is the Airbnb rental income as well.7. KissimmeeMedian Property Price: $240,000Airbnb Rental Income: $2,850Airbnb Cap Rate: 7.4%Airbnb Cash on Cash Return: 7.4%Airbnb Occupancy Rate: 70.8%Traditional Rental Income: $1,380Traditional Cap Rate: 1.4%Traditional Cash on Cash Return: 1.4%What makes Kissimmee one of the best places to buy a vacation home in Florida to rent out as an Airbnb rental is its proximity to amusement parks. Both you and your Airbnb hosts would like to have some fun during your vacation in the Sunshine State. Thus, it is worth paying a bit more when buying an investment property in Kissimmee as the Airbnb rental income will compensate for this. Moreover, Kissimmee offers the highest Airbnb occupancy rate of all locations in our ranking.8. St. AugustineMedian Property Price: $420,000Airbnb Rental Income: $3,300Airbnb Cap Rate: 7.3%Airbnb Cash on Cash Return: 7.3%Airbnb Occupancy Rate: 59.5%Traditional Rental Income: $1,550Traditional Cap Rate: 1.9%Traditional Cash on Cash Return: 1.9%St. Augustine could just as well be the oldest city in the US. It offers beautiful Spanish colonial architecture as well as sandy and tranquil Atlantic Ocean beaches. That’s the perfect combination for the ideal vacation, right? No wonder St. Augustine is one of the best places to buy a vacation home in Florida.9. Panama CityMedian Property Price: $225,000Airbnb Rental Income: $2,290Airbnb Cap Rate: 7.2%Airbnb Cash on Cash Return: 7.2%Airbnb Occupancy Rate: 45.8%Traditional Rental Income: $1,020Traditional Cap Rate: 1.8%Traditional Cash on Cash Return: 1.8%When you think about vacation in the Sunshine State, you think about long white-sand beaches, seafood, marina, amusement parks, and dolphins. Well, Panama City has it all, and that’s why it is last – but not least – on our list of the best places to buy a vacation home in Florida to rent out on Airbnb.Once you’ve settled on which city to invest in real estate in Florida in 2018, read our blog “How to Find the Best Investment Property Using a Heatmap”.Is Airbnb Legal in Florida?Since we are talking about Airbnb rentals here, we have to address the issue of whether Airbnb is legal in Florida. Generally speaking, Airbnb rentals are legal in Florida though various restrictions apply in some locations. Moreover, 2018 promises to see further adjustments in the laws and regulations governing short-term rentals in Florida, so interested real estate investors have to keep up with news in this regard.Florida is definitely a top choice for spending your vacation as well as for investing in real estate, which makes it such a great location for buying a vacation home. It’s hard to decide on just a few of the best places to buy a vacation home in Florida because there are many excellent locations for buying an investment property to rent out on Airbnb. If you are thinking of investing in real estate in Florida in 2018, you don’t have to limit yourself to the 9 places above; you could also consider Daytona Beach, Tamarac, Largo, Miami, and others.To start exploring the best neighborhoods in your city of choice to buy a vacation home in Florida, click here. Start Your Investment Property Search! START FREE TRIAL Daytona Beach FLKissimmee FLLake Worth FLMiami FLPanama City FLSt. Augustine FL 0FacebookTwitterGoogle +PinterestLinkedin Daniela AndreevskaDaniela is Marketing Director at Mashvisor. She has been writing about real estate investing for a number of years. Previously, she worked in economic policy research and fundraising. Daniela holds a Master degree in Middle East and Mediterranean Studies from King’s College London. Previous Post Mashvisor’s Rental Property Calculator: A Guide for Beginner Real Estate Investors Next Post Baltimore Real Estate Market 2018: Why and Where to Invest Related Posts Income Properties – The Best Types to Own During Summer 2018 5 Best Cities for Real Estate Appreciation in 2020 Investing in Arlington Real Estate 11 Ways to Find a Residential Real Estate Agent for Buying Investment Property The Advantages and Disadvantages of Real Estate Investing as a Full-Time Job How to Calculate the Cap Rate for an Investment Property Should You Buy Investment Property or Invest with Property Investment Companies? 10 Best Neighborhoods in the Nashville Real Estate Market 2019 What Are the Best Types of Real Estate Investments for Novice Investors? How to Get Multiple Offers on a House Real Estate Comparative Market Analysis for Rental Properties Investing in Renovated Properties for Sale: Is It a Good Idea?