Florida has always been a real estate hotspot, but is investing in short term rentals for sale Florida still a good thing to do in 2023?
Table of Contents
- Reasons Why Florida Short Term Rentals for Sale Are Still a Lucrative Investment in 2023
- 4 Tips on How to Find Profitable Short Term Rentals for Sale in Florida
- Top 10 Cities in Florida for Short Term Rentals
As a real estate market, the Sunshine State is a solid contender as one of the best in the 2022 US housing market, and in the past several years as well, for that matter. It is a great place for young jobseekers to find good employment opportunities. It’s very conducive to raising a family and is also one of the preferred places for retirement among the older population.
Florida boasts a thriving tourism industry, giving it a steady influx of visitors by the millions annually. It is why a lot of folks look at the state as an excellent location for real estate investing.
However, given that we’re still not out of the pandemic and the current global economic climate, are short term rentals for sale in Florida still good investment options? In this article, we will take a closer look at what the Sunshine State can offer real estate investors in 2023 so they can gauge whether investing in Florida real estate is still wise.
We will also take a look at what certain Florida markets can offer vacation rental property investors with the help of Mashvisor and its reliable database.
If you’re considering buying an investment property in Florida for Airbnb rentals, please continue reading.
Related: How to Buy Your First Airbnb Property
Reasons Why Florida Short Term Rentals for Sale Are Still a Lucrative Investment in 2023
Investing in short term rentals is one of the best investment strategies any real estate investor will ever make. In the right location, you can potentially earn up to three times as much as a landlord with a traditional rental property.
Florida, in particular, is very appealing to investors as a vacation rental investment location, given its bustling tourism industry. However, just like any investment opportunity, before you go looking for properties for sale in sunny Florida, you first need to know if it’s the right strategy for you.
Things to Consider With Short Term Rental Investing in 2023
The pandemic temporarily disrupted people’s travel plans, significantly affecting the global tourism industry. However, COVID-19’s adverse effects on the economy, in general, were somehow short-lived as creative and innovative people adapted accordingly to the times. Businesses pivoted, including short-term rental platforms like Airbnb, to stay afloat.
Today, more economies are reopening and gaining enough momentum to put them right back on their pre-pandemic tracks. Travel and hospitality businesses are experiencing steady growth and are near their pre-COVID performance. Some businesses are even performing way better now compared to three years ago.
However, just because we’re back to normal (or close to it), it doesn’t necessarily mean that you should assume things will be the way they were. It is especially true when it comes to investing in short term rental properties. Airbnb and other similar platforms may be doing exceptionally well now, considering we’re still in a pandemic.
If you’re thinking about starting your own Airbnb business, you might want to consider the following first:
2023’s Travel Conditions
According to US Travel, the forecast for international travel in 2023 is estimated to reach around 65 million visitors to the US. It means that people are ready to travel. Even if you factor in inflation, folks are ready to spend at least $200 a day for travel in 2023.
So far, we’ve already seen a huge boost in travel activity since the pandemic spread in 2020. People are raring to go out and see the world after being holed up at home for nearly two years. Remote work arrangements are also a factor in the increase in travel stats. Employees who work remotely are able to get their work done virtually anywhere.
Overall Status of a Neighborhood
When you look for income properties for sale to use as vacation rental units, you need to consider the neighborhood’s overall performance.
5 Benefits of Investing in Short Term Rentals for Sale Florida
Let’s say you’re still wondering whether investing in short term rentals in Florida is a good idea. Here are a few compelling reasons why you should:
1. Florida Remains One of the Country’s Hottest Markets
As it is, Florida has been one of the top-performing states in the real estate market for several years now. It remains a favorite among real estate investors for several reasons:
- Pleasant weather all year long
- Picturesque outdoor spaces
- Affordable housing
- Lower taxes
2022 housing market forecasts predicted the Sunshine State to be a red hot market this year. Even with inflation and rising housing prices, it’s still pretty hot and experts and analysts expect it to stay that way in 2023.
2. Investing in Short Term Rentals Give You a Greater Earning Potential
When it comes to rental properties, you have two options to choose from: traditional or long term rentals and vacation or short term rentals. Depending on your location, one might be more financially rewarding than the other. In this case, Florida offers pretty good rental rates for both rental strategies.
On a state level, the average traditional rental income in Florida is $2,556 on a 2.70% cash on cash return. On the other hand, it gives vacation rental owners a slightly lower cash on cash return of 2.35% but a slightly higher short term rental income of $2,961. Both sets of stats were taken from Mashvisor’s September 2022 location report.
The rental income and cash on cash return for September are lower compared to August 2022’s numbers. Mashvisor’s August 2022 report shows that traditional rentals make $2,685 with a cash on cash return of 2.28%. Vacation rental income, on the other hand, was higher at $3,195 on a 2.16% cash on cash return.
The slight decrease in September can be attributed to the overall market cooling down. Regardless, investing in short term rentals in Florida is always a good thing thanks to its strong tourism industry.
3. Short Term Rental Properties Give You Greater Flexibility
One other great benefit of investing in vacation rental properties is that it gives you the flexibility that a traditional rental can’t. You determine when your property can be rented in a month. You can get your property listed on Airbnb (and other similar short term rental platforms) according to your personal calendar.
If you want to maximize your rental income, you can choose to rent it out full-time. On the other hand, you also have the option to use your property to host guests or crash in on your vacation if you’re an out-of-town investor.
4. People Are Excited to Travel After the Pandemic
After two years of sheltering in place, people are now clamoring for some solid vacation time. When economies reopened, folks started making travel plans and revisited pre-pandemic planned trips. Even workers who normally couldn’t go on trips now choose to travel, with remote work arrangements already set in place.
Nowadays, people are booking longer stays in Airbnb rentals. Find out more about longer stays on Airbnb here.
5. It Gives You a Good Level of Protection Against Inflation
Lastly, investing in short term rentals gives you a hedge against inflation and recession. The same goes for real estate investing, in general.
Since real estate has a very low to zero correlation with the stock market, investing in the former doesn’t give you the same level of volatility. Generally, real estate properties appreciate over time. It alone already gives you a win. You can buy real estate for sale now and hold on to it. You can then decide to sell it when it has already appreciated enough for you to get your ROI and earn a profit.
If you choose to go with a rental strategy, you can offset inflation by raising your rates accordingly yet reasonably. It will allow you to take care of the property and provide for your needs simultaneously.
Related: Florida Housing Market Predictions: What Will Happen in 2023?
4 Tips on How to Find Profitable Short Term Rentals for Sale in Florida
If you’re determined to get into the short term rental market, here are some practical tips to improve your search for the right investment property:
Tip #1: Due Diligence Should Never Be Taken for Granted
Since real estate investing is technically a numbers game, you should do all you can to ensure your chances of success stay high. One of the best ways to do it is to perform extensive due diligence. Sadly, a lot of investors tend to overlook this step and base their decisions on hype.
If you want your investment to give you a good ROI and enable you to take some money to the bank, you need to do your homework. The internet is chock full of great websites you can use for your market research and analysis. One such website is Mashvisor.
Mashvisor is a real estate platform that helps real estate investors like you find the most promising properties in the most profitable neighborhoods. It gives users access to a massive database that contains all the necessary information and data you will need to create an in-depth investment property analysis.
To start looking for and analyzing short term rentals for sale in Florida or in another city and neighborhood of choice, click here.
Tip #2: Get the Right Real Estate Investing Tool
Real estate investing is made a lot more efficient if you have the right tools with you. A lot of investors rely on Excel spreadsheets for their rental property analysis. Others still use a ledger or accounting notebook. We recommend going digital with Mashvisor.
As a real estate investing tool, Mashvisor comes with several handy features that make finding and analyzing real estate a lot easier and more accurate. You can easily sift through prospective properties using its real estate heatmap. As far as calculations go, its investment property calculator is considered one of the best in the market today.
Other real estate websites offer some of Mashvisor’s tools but not all. Mashvisor is your one-stop shop for all your real estate investing needs.
To learn more about how Mashvisor can help you find profitable investment properties, schedule a demo.
Tip #3: Build a Network of Reputable Florida Real Estate Professionals
Since Florida is one of the country’s hottest markets, you can bet that there are tons of real estate professionals you can connect with. You simply need to go out and meet them.
Attend events and open houses. Contact real estate agents and brokers online and set appointments. Reach out to other investors who own Florida real estate to seek advice. It doesn’t always need to be a formal setting. You can invite them to parties or have coffee with them. The important thing is to go out there and meet people to grow your network.
Tip #4: Always Be on the Lookout for Good Deals
Lastly, keep your eyes open for golden opportunities, whether it’s a possible investment opportunity or a networking opportunity. Actively look for potential investment properties or mortgage deals. Pay attention to the names of professionals and firms whose services you might need eventually. It pays to be vigilant in real estate investing, especially in Florida.
Related: How to Find Profitable Rental Investment Properties for Sale
Top 10 Cities in Florida for Short Term Rentals
Success in real estate investing boils down to your location. Not all of them are created equally. Each neighborhood comes with its own advantages and disadvantages. As an investor, you need to be aware of what a specific market can provide in terms of investment returns.
We took a look at Mashvisor’s September 2022 data for Florida and came up with this list of cities best for Airbnb investing. Each location was selected based on the following criteria:
- At least a hundred active listings
- A median property price of less than $1,000,000
- An average rental income of at least $2,000
- Cash on cash return of 2.00% and above
- Airbnb occupancy rate that doesn’t go below 50%
Based on the above criteria, we ranked the following locations from the highest cash on cash return to the lowest. Here are the best cities to look for short term rentals for sale in Florida today:
- Median Property Price: $584,713
- Average Price per Square Foot: $352
- Days on Market: 63
- Monthly Short Term Rental Income: $5,023
- Short Term Rental Cash on Cash Return: 7.65%
- Short Term Rental Cap Rate: 7.80%
- Short Term Rental Daily Rate: $166
- Short Term Rental Occupancy Rate: 51%
- Walk Score: 82
- Median Property Price: $433,342
- Average Price per Square Foot: $249
- Days on Market: 44
- Monthly Short Term Rental Income: $3,893
- Short Term Rental Cash on Cash Return: 5.79%
- Short Term Rental Cap Rate: 5.91%
- Short Term Rental Daily Rate: $172
- Short Term Rental Occupancy Rate: 58%
- Walk Score: 74
3. Palm Bay
- Median Property Price: $350,647
- Average Price per Square Foot: $210
- Days on Market: 75
- Monthly Short Term Rental Income: $3,057
- Short Term Rental Cash on Cash Return: 5.41%
- Short Term Rental Cap Rate: 5.54%
- Short Term Rental Daily Rate: $137
- Short Term Rental Occupancy Rate: 56%
- Walk Score: 45
- Median Property Price: $388,530
- Average Price per Square Foot: $211
- Days on Market: 58
- Monthly Short Term Rental Income: $3,308
- Short Term Rental Cash on Cash Return: 5.34%
- Short Term Rental Cap Rate: 5.47%
- Short Term Rental Daily Rate: $124
- Short Term Rental Occupancy Rate: 62%
- Walk Score: 36
- Median Property Price: $321,395
- Average Price per Square Foot: $198
- Days on Market: 49
- Monthly Short Term Rental Income: $2,652
- Short Term Rental Cash on Cash Return: 5.12%
- Short Term Rental Cap Rate: 5.28%
- Short Term Rental Daily Rate: $172
- Short Term Rental Occupancy Rate: 51%
- Walk Score: 34
- Median Property Price: $619,702
- Average Price per Square Foot: $299
- Days on Market: 53
- Monthly Short Term Rental Income: $4,434
- Short Term Rental Cash on Cash Return: 4.88%
- Short Term Rental Cap Rate: 4.97%
- Short Term Rental Daily Rate: $231
- Short Term Rental Occupancy Rate: 54%
- Walk Score: 5
7. University Park
- Median Property Price: $629,251
- Average Price per Square Foot: $365
- Days on Market: 16
- Monthly Short Term Rental Income: $4,827
- Short Term Rental Cash on Cash Return: 4.82%
- Short Term Rental Cap Rate: 4.90%
- Short Term Rental Daily Rate: $159
- Short Term Rental Occupancy Rate: 56%
- Walk Score: 69
- Median Property Price: $356,960
- Average Price per Square Foot: $194
- Days on Market: 62
- Monthly Short Term Rental Income: $2,794
- Short Term Rental Cash on Cash Return: 4.72%
- Short Term Rental Cap Rate: 4.87%
- Short Term Rental Daily Rate: $149
- Short Term Rental Occupancy Rate: 56%
- Walk Score: 62
9. Deer Island
- Median Property Price: $418,158
- Average Price per Square Foot: $215
- Days on Market: 137
- Monthly Short Term Rental Income: $3,209
- Short Term Rental Cash on Cash Return: 4.66%
- Short Term Rental Cap Rate: 4.78%
- Short Term Rental Daily Rate: $146
- Short Term Rental Occupancy Rate: 50%
- Walk Score: 7
10. Fern Park
- Median Property Price: $338,133
- Average Price per Square Foot: $206
- Days on Market: 46
- Monthly Short Term Rental Income: $3,164
- Short Term Rental Cash on Cash Return: 4.64%
- Short Term Rental Cap Rate: 4.76%
- Short Term Rental Daily Rate: $151
- Short Term Rental Occupancy Rate: 59%
- Walk Score: 57
To start looking for and analyzing the best short term rentals for sale Florida and other housing markets, click here.
Wrapping It Up
Is investing in short term rentals for sale Florida still a good thing in 2023? Based on early forecasts from industry experts, its track record, and actual numbers, the answer is yes.
Despite the prevailing inflation and housing market conditions, Florida remains a top destination for short term rental investors to buy a property. The state boasts a thriving tourism industry and a strong economy. Also, it offers affordable housing and low property taxes. Most importantly, Florida takes pride in its pleasant weather all year long.
You can never go wrong with investing in vacation rentals in the Sunshine State. But if you really want to improve your chances of investing success, use Mashvisor as your primary investment tool. It will help you locate the most promising properties and make life easier for you as you do the math on each one of them.
To get access to our real estate investment tools, click here to sign up for a 7-day free trial of Mashvisor today, followed by 15% off for life.