Buying a vacation home might be one of the easiest ways to start a real estate investing business. In addition to providing you with a free lodging for your holidays, it gives you the opportunity to rent out for the rest of the year.
Moreover, you can benefit from tax deductions. And when it comes to vacation homes, Florida is definitely a dream place for one. But where should you aim to purchase your vacation home in the Sunshine State? Well, let’s look at the best places to buy a vacation home in Florida?
Related: The Future of Vacation Rental Investment Properties
What Does “Best Places to Buy a Vacation Home in Florida” Mean?
To begin with, we should clarify what we mean when we say “best places to buy a vacation home in Florida”. There are so many possible criteria depending on our purpose and preferences.
In this case, we look at a vacation home as a rental property, for the time of the year when the owner is not using this. This should automatically make you think about Airbnb as this rental strategy would allow you to still use your income property during your vacations.
Finally, it is the usual practice to look at rental income when it comes to vacation homes. So, the best places to buy a vacation home in Florida would be those cities which offer the highest Airbnb rental income.
Is Airbnb Legal in Florida?
Then comes the question about the legality of Airbnb in the Sunshine State. As someone who is considering purchasing a vacation home in Florida, you will be glad to know that Airbnb might soon be fully legal throughout Florida.
In January this year, Senator Greg Steube introduced legislation, which would preempt any local regulations on short-term rental passed after 2011 and essentially prohibit local governments from imposing future restrictions on Airbnb rentals.
This legislation aims to counteract recent attempts to crack down on Airbnb activities throughout Florida, including a new fine of $20,000 to anyone renting out a space for less than 6 months, introduced in March 2016. But things are looking good for potential Airbnb income property owners in Florida after the newly designed rules proposed by Senator Greg Steube.
What Are the Best Places to Buy a Vacation Home in Florida?
So, let’s take a look at the cities which offer the highest Airbnb rental income throughout the Sunshine State as these are the best places to buy a vacation home in Florida. Following is a list of the most profitable locations for owning a vacation home in Florida, based on the expected rental income from Airbnb.
The expected rental income along with the other important real estate investing figures have been computed by Mashvisor’s investment property calculator. This rental property calculator saves real estate investors a lot of time and money by replacing the need for conducting complicated real estate market analysis to get real estate comps.
1. St. Augustine
- Median Property Price: $340,000
- Airbnb Rental Income: $2,760
- Traditional Rental Income: $1,890
- Airbnb CoC Return: 6.2%
- Traditional CoC Return: 3.3%
- Airbnb Cap Rate: 9.7%
- Traditional Cap Rate: 6.6%
- Airbnb Occupancy Rate: 51.5%
According to data from Mashvisor’s investment property calculator, St. Augustine is #1 among the best places to buy a vacation home in Florida. It offers a really high Airbnb rental income, with the additional benefit of being quite affordable.
No surprise that the forecast profitability as measured by both cash on cash (CoC) return and capitalization (cap) rate. St. Augustine is a small city (with population of about 14,000) on the coast of northeastern Florida, which makes it a great location for spending your holidays as well as for owning a rental property.
2. Destin
- Median Property Price: $695,000
- Airbnb Rental Income: $2,720
- Traditional Rental Income: $1,610
- Airbnb CoC Return: 2.3%
- Traditional CoC Return: 0.5%
- Airbnb Cap Rate: 4.7%
- Traditional Cap Rate: 2.8%
- Airbnb Occupancy Rate: 58.4%
The second among the best places to buy a vacation home in Florida is Destin, with rental income from Airbnb just a few dollars below St. Augustine. However, this location is significantly more expensive. But it has a very important advantage for all those loving nature and sports – it is very famous for the fishing opportunities that it offers.
3. Panama City
- Median Property Price: $177,000
- Airbnb Rental Income: $2,650
- Traditional Rental Income: $970
- Airbnb CoC Return: 13.0%
- Traditional CoC Return: 2.8%
- Airbnb Cap Rate: 17.2%
- Traditional Cap Rate: 6.4%
- Airbnb Occupancy Rate: 54.6%
Panama City ranks as #3 in our best places to buy a vacation home in Florida. While it is one of the cheapest cities in the Sunshine State, it offers great rental income from Airbnb. The profitability from Airbnb here is excellent, with double digits for both CoC return and cap rate.
Related: 10 Most Profitable Airbnb Locations for Cash on Cash Return
4. Cutler Bay
- Median Property Price: $270,000
- Airbnb Rental Income: $2,630
- Traditional Rental Income: $1,910
- Airbnb CoC Return: 8.2%
- Traditional CoC Return: 5.7%
- Airbnb Cap Rate: 12.3%
- Traditional Cap Rate: 9.6%
- Airbnb Occupancy Rate: 47.4%
The #4 among the best places to buy a vacation home in Florida is Cutler Bay, which is both affordable and profitable, a simply great combination for real estate investing.
5. Tampa
- Median Property Price: $294,000
- Airbnb Rental Income: $2,430
- Traditional Rental Income: $1,840
- Airbnb CoC Return: 7.6%
- Traditional CoC Return: 4.5%
- Airbnb Cap Rate: 11.5%
- Traditional Cap Rate: 8.3%
- Airbnb Occupancy Rate: 40.4%
Tampa is yet another city you should consider when you look at the best places to buy a vacation home in Florida. In addition to offering wonderful beach options, it is also a business center and an important place for cultural events.
Related: Tampa: Hot Weather, Hot Real Estate
6. Miami Beach
- Median Property Price: $502,000
- Airbnb Rental Income: $2,370
- Traditional Rental Income: $2,140
- Airbnb CoC Return: 2.4%
- Traditional CoC Return: 2.3%
- Airbnb Cap Rate: 5.5%
- Traditional Cap Rate: 5.5%
- Airbnb Occupancy Rate: 56.8%
When talking about the best places to buy a vacation home in Florida, it is simply impossible to skip Miami Beach. This is a famous resort city on a barrier island connected to mainland Miami through a system of bridges. Actually both Airbnb and traditional renting are very profitable here, which gives you the option to move to a full-time landlord in the future by renting your income property out for long-term rentals.
7. Madeira Beach
- Median Property Price: $450,000
- Airbnb Rental Income: $2,220
- Traditional Rental Income: $1,820
- Airbnb CoC Return: 3.9%
- Traditional CoC Return: 2.1%
- Airbnb Cap Rate: 7.0%
- Traditional Cap Rate: 5.1%
- Airbnb Occupancy Rate: 53.5%
The last in our ranking of the best places to buy a vacation home in Florida is Madeira Beach, which also offers an Airbnb rental income of above $2,000.
If you plan to buy an Airbnb property in any of these top locations in Florida, you should first learn how to become an Airbnb host.
Conclusion
Overall the State of Florida offers amazing opportunities for those seeking to buy a vacation home, as measured by the Airbnb rental income. Actually it is hard to say which the best places to buy a vacation home in Florida are as many cities yield rental income of above $2,000.
While we ranked the top 7 locations for purchasing a second home in Florida, don’t underestimate other places such as Winter Park, Miami, Clearwater, and West Palm Beach. Once you’ve settled on buying a property in Florida, check out Mashvisor for important figures on the city as well as the neighborhood level for hundreds of actual properties.