One of the best things about real estate investing is the myriad of strategies and options which one can choose from. Among all real estate investment strategies out there, buying a vacation home emerges as one of the best choices appropriate for both beginners and professionals. Investing in a second home to rent out on a short term basis comes with many benefits, while it requires no previous experience or background in real estate. The key to success – as just with traditional rental properties – is investing in a top location. As the Florida real estate market is among the most profitable locations for vacation home rental investments, we’ve put together a list of the 20 best places for investing in short term rentals there in 2020.
Why Should You Be Buying a Vacation Home at All?
As mentioned above, investing in short term rental properties comes with numerous benefits.
But what are they exactly?
First and foremost, according to nationwide rental market analysis conducted by our real estate investment app – Mashvisor – Airbnb rentals consistently bring a higher return on investment than traditional investment properties. In the vast majority of US markets, the former rental strategy results in better cash on cash return and better cap rate. This is one of the main reasons why many real estate investors have been shifting their approach away from long term rental properties, in favor of short term ones. After all, the ultimate goal of investors is to make as much money from real estate as possible.
Secondly, buying an Airbnb income property is equivalent to both buying an investment property and buying a second home. As vacation homes get listed for rent on a daily basis, investors can always choose to reserve them for their own use during the holidays. In this way, you get to spend your holidays at your own vacation home, while making profit from it for the rest of the year.
Yet another benefit of buying a second home to rent out on Airbnb or another homesharing platform is the tax advantages. Depending on how many days a year you rent out your vacation home for and how many days you use it for your own purposes, you can get tax deductions on your Airbnb rental income. Furthermore, the expenses related to running an Airbnb rental business are tax-deductible. This means that you can push up your cash flow and enhance your return on investment, ending up with both good cash on cash return and good cap rate.
See how our Airbnb profitability calculator can help you find top-performing vacation home rentals in Florida and beyond.
What Are the Benefits of Investing in Airbnb Florida?
While buying a vacation home is an excellent real estate investing strategy for all, some US markets are better suited for this approach than others. The Florida real estate market has emerged as the absolute top location for Airbnb investment properties over the years.
The main reason is the high year-round demand by tourists who are attracted to the warm climate, the unique beaches, and the numerous tourist attractions. The tourism importance of the Sunshine State pushes both the Airbnb occupancy rate and the Airbnb daily rate up in the majority of cities and towns. The result is above-average Airbnb income and rate of return.
In addition, as Mashvisor’s real estate market analysis reveals, the median property price in most Florida locations is significantly below the median home value in many other of the best places for buying a vacation home across the US housing market in 2020. This makes Florida real estate investing an affordable strategy even for beginner investors. Moreover, it contributes to the high Airbnb cash on cash return and Airbnb cap rate as both of these metrics depend on the sale price of a rental property.
Last but not least, Florida is one of the few major US states where short term rentals remain largely legal and unrestricted – though regulated – even for non-owner occupied vacation rentals. One notable exception is the Miami real estate market. This fact has pulled many out-of-state investors to Airbnb Florida income properties.
Related: What You Need to Know About Airbnb Miami Regulations in 2019?
How Do We Define the Best Places to Buy Vacation Homes in a Market?
Now that you know why you should consider buying a vacation home in Florida in 2020, let’s focus on how to find the top markets for this rental strategy in the Sunshine State. The main factor used to determine the best locations for investing in an Airbnb income property should be the return on investment. No matter their preferred strategy and available budget, investors want to choose the option which will provide them with the best rate of return on their initial capital. While there are many profitability metrics in real estate investing, here we focus on the cash on cash return. This is a very comprehensive measure of return on investment for rental properties – whether traditional or Airbnb – as it takes into consideration the method of financing, unlike the cap rate. Realistically speaking, very few investors can afford to buy a rental property fully in cash. That’s why it is important to factor the down payment and the monthly mortgage payments into the calculations of profitability.
What Data Do We Use?
In 2020 smart real estate investors base their decisions on big data and predictive analytics. Being on the forefront of real estate investment analysis, we at Mashvisor obtain all our real estate data from such reliable sources as the MLS and Airbnb.com and update it on a daily basis. Mashvisor’s real estate investment software analyzes all active Airbnb listings over the past 12 months to provide investors with the average Airbnb daily rate, Airbnb occupancy rate, and Airbnb income in any US market, at both the cuty and the neighborhood level. Moreover, we constantly compare our Airbnb data calculations with the performance of actual Airbnb hosts in local housing markets to confirm accuracy.
Related: Where to Find Airbnb Data in 20200 for Real Estate Investing?
What Are the Top Locations in the Florida Real Estate Market for Short Term Rentals?
Now it’s time to have a look at the best places for buying a vacation home in Florida in 2020. These are the 20 locations which provide the highest Airbnb Florida cash on cash return, alongside some of the highest values across the US in general:
1. Perry
- Airbnb Cash on Cash Return: 7.9%
- Airbnb Daily Rate: $196
- Airbnb Occupancy Rate: 53.2%
- Airbnb Rental Income: $3,450
- Median Property Price: $563,900
- Average Price per Square Foot: $293
- Real Estate Listings for Sale: 15
- Airbnb Listings: 5
2. Beverly Hills
- Airbnb Cash on Cash Return: 6.5%
- Airbnb Daily Rate: $129
- Airbnb Occupancy Rate: 50.6%
- Airbnb Rental Income: $2,680
- Median Property Price: $248,700
- Average Price per Square Foot: $119
- Real Estate Listings for Sale: 109
- Airbnb Listings: 8
3. Seffner
- Airbnb Cash on Cash Return: 6.4%
- Airbnb Daily Rate: $174
- Airbnb Occupancy Rate: 63.0%
- Airbnb Rental Income: $3,370
- Median Property Price: $290,100
- Average Price per Square Foot: $144
- Real Estate Listings for Sale: 20
- Airbnb Listings: 5
4. Valrico
- Airbnb Cash on Cash Return: 6.4%
- Airbnb Daily Rate: $139
- Airbnb Occupancy Rate: 68.1%
- Airbnb Rental Income: $3,870
- Median Property Price: $337,700
- Average Price per Square Foot: $137
- Real Estate Listings for Sale: 78
- Airbnb Listings: 11
5. Cutler Bay
- Airbnb Cash on Cash Return: 6.3%
- Airbnb Daily Rate: $109
- Airbnb Occupancy Rate: 64.9%
- Airbnb Rental Income: $3,920
- Median Property Price: $332,000
- Average Price per Square Foot: $173
- Real Estate Listings for Sale: 119
- Airbnb Listings: 33
6. Dunnellon
- Airbnb Cash on Cash Return: 5.9%
- Airbnb Daily Rate: $158
- Airbnb Occupancy Rate: 56.8%
- Airbnb Rental Income: $3,270
- Median Property Price: $343,400
- Average Price per Square Foot: $166
- Real Estate Listings for Sale: 57
- Airbnb Listings: 40
7. Cocoa
- Airbnb Cash on Cash Return: 5.7%
- Airbnb Daily Rate: $126
- Airbnb Occupancy Rate: 68.2%
- Airbnb Rental Income: $3,060
- Median Property Price: $322,100
- Average Price per Square Foot: $167
- Real Estate Listings for Sale: 123
- Airbnb Listings: 43
8. Quincy
- Airbnb Cash on Cash Return: 5.6%
- Airbnb Daily Rate: $174
- Airbnb Occupancy Rate: 37.0%
- Airbnb Rental Income: $2,060
- Median Property Price: $239,100
- Average Price per Square Foot: $112
- Real Estate Listings for Sale: 30
- Airbnb Listings: 6
9. Fort White
- Airbnb Cash on Cash Return: 5.6%
- Airbnb Daily Rate: $121
- Airbnb Occupancy Rate: 49.6%
- Airbnb Rental Income: $2,120
- Median Property Price: $200,600
- Average Price per Square Foot: $130
- Real Estate Listings for Sale: 17
- Airbnb Listings: 26
10. Greenacres
- Airbnb Cash on Cash Return: 5.5%
- Airbnb Daily Rate: $98
- Airbnb Occupancy Rate: 65.5%
- Airbnb Rental Income: $2,660
- Median Property Price: $230,100
- Average Price per Square Foot: $155
- Real Estate Listings for Sale: 91
- Airbnb Listings: 304
11. Maitland
- Airbnb Cash on Cash Return: 5.5%
- Airbnb Daily Rate: $131
- Airbnb Occupancy Rate: 70.9%
- Airbnb Rental Income: $4,300
- Median Property Price: $423,800
- Average Price per Square Foot: $202
- Real Estate Listings for Sale: 18
- Airbnb Listings: 13
12. Port Saint John
- Airbnb Cash on Cash Return: 5.5%
- Airbnb Daily Rate: $183
- Airbnb Occupancy Rate: 60.3%
- Airbnb Rental Income: $3,200
- Median Property Price: $292,200
- Average Price per Square Foot: $160
- Real Estate Listings for Sale: 56
- Airbnb Listings: 10
13. Sunrise
- Airbnb Cash on Cash Return: 5.3%
- Airbnb Daily Rate: $119
- Airbnb Occupancy Rate: 67.2%
- Airbnb Rental Income: $3,110
- Median Property Price: $261,000
- Average Price per Square Foot: $170
- Real Estate Listings for Sale: 220
- Airbnb Listings: 40
14. Weeki Wachee
- Airbnb Cash on Cash Return: 5.3%
- Airbnb Daily Rate: $134
- Airbnb Occupancy Rate: 56.9%
- Airbnb Rental Income: $3,110
- Median Property Price: $339,100
- Average Price per Square Foot: $158
- Real Estate Listings for Sale: 82
- Airbnb Listings: 45
15. Apopka
- Airbnb Cash on Cash Return: 5.3%
- Airbnb Daily Rate: $152
- Airbnb Occupancy Rate: 57.6%
- Airbnb Rental Income: $3,160
- Median Property Price: $320,100
- Average Price per Square Foot: $156
- Real Estate Listings for Sale: 872
- Airbnb Listings: 36
16. Cedar Key
- Airbnb Cash on Cash Return: 5.3%
- Airbnb Daily Rate: $135
- Airbnb Occupancy Rate: 56.0%
- Airbnb Rental Income: $3,070
- Median Property Price: $320,100
- Average Price per Square Foot: $251
- Real Estate Listings for Sale: 46
- Airbnb Listings: 40
17. Lake Wales
- Airbnb Cash on Cash Return: 5.2%
- Airbnb Daily Rate: $104
- Airbnb Occupancy Rate: 48.2%
- Airbnb Rental Income: $2,410
- Median Property Price: $245,300
- Average Price per Square Foot: $130
- Real Estate Listings for Sale: 70
- Airbnb Listings: 30
18. Satellite Beach
- Airbnb Cash on Cash Return: 5.1%
- Airbnb Daily Rate: $194
- Airbnb Occupancy Rate: 57.7%
- Airbnb Rental Income: $3,790
- Median Property Price: $396,400
- Average Price per Square Foot: $222
- Real Estate Listings for Sale: 93
- Airbnb Listings: 80
19. Duck Key
- Airbnb Cash on Cash Return: 5.1%
- Airbnb Daily Rate: $335
- Airbnb Occupancy Rate: 54.7%
- Airbnb Rental Income: $5,650
- Median Property Price: $718,700
- Average Price per Square Foot: $507
- Real Estate Listings for Sale: 41
- Airbnb Listings: 16
20. Apollo Beach
- Airbnb Cash on Cash Return: 5.0%
- Airbnb Daily Rate: $240
- Airbnb Occupancy Rate: 56.1%
- Airbnb Rental Income: $4,100
- Median Property Price: $433,300
- Average Price per Square Foot: $173
- Real Estate Listings for Sale: 89
- Airbnb Listings: 32
Interested in exploring vacation home rental opportunities in other states? Check out the 10 Best Places for Buying a Vacation Home in 2020.
Find out how our Airbnb analytics platform can help you make profitable short term rental investment decisions in 2020.
Florida is not only one of the top tourist destinations to spend your holidays in but also one of the most profitable US markets to invest in Airbnb for sale. Beginner real estate investors might find it hard to decide where to purchase a short term rental property in the Sunshine State because so many cities and towns there enjoy outstanding demand from tourists and other visitors. To help them out, we’ve compiled this list of the 20 best places for buying a vacation home in Florida in 2020, as highlighted by Mashvisor’s Airbnb income calculator. To move forward with making money in real estate this year, sign up for Mashvisor to search through and analyze thousands of Florida investment properties for sale in these markets and many others.
