If you’re considering buying a property in Florida to rent out to short-term vacationers, you’re not alone. Vacation rentals are a growing sector of real estate, with many investors drawn to the Sunshine State’s warm climate, beaches, theme parks, and year-round tourism. However, before investing in vacation rentals, it’s crucial to understand that this type of property comes with unique challenges and opportunities.
In this guide, we’ll cover three essential things you need to know before investing in vacation rentals in Florida, along with some insider tips to help you maximize your returns and avoid common pitfalls.
3 Things You Need To Know Before Investing In Vacation Rentals In FL
#1. Vacation Rental Tenants Are Different from Long-Term Renters
One of the first things you’ll notice when managing a vacation rental is that your guests are not like traditional long-term tenants.
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Higher Expectations: Vacationers are spending their hard-earned money on a getaway, so they often expect hotel-quality cleanliness, amenities, and comfort. That means the property should be fully furnished with stylish décor, comfortable beds, quality linens, and a fully stocked kitchen. Even small touches, like beach chairs, coffee makers, or board games, can make a huge difference.
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Short Stays, Frequent Turnovers: Unlike long-term renters who sign yearly leases, vacation rental guests might stay anywhere from two nights to a few weeks. This means you’ll have to prepare for frequent turnovers, cleaning, and maintenance.
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Willingness to Pay a Premium: The good news? Many travelers are willing to pay top dollar for a well-located, beautifully maintained property — especially during peak seasons.
Tip: Consider hiring a professional property management company to handle cleaning, guest communication, and emergencies. This can help maintain a consistent guest experience and positive reviews, which are vital for repeat bookings.
#2. Location Matters More Than Ever
When it comes to vacation rentals, location isn’t just important — it’s everything. Before investing in vacation rentals in Florida, research areas that have strong tourism demand.
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Proximity to Attractions: Properties near beaches, theme parks, national parks, or downtown areas tend to see higher occupancy rates. In Florida, hotspots like Destin, Panama City Beach, Orlando, and the Florida Keys are consistently popular.
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Walkability and Convenience: Travelers love being close to restaurants, entertainment, and transportation. The more “effortless” the vacation feels, the better your reviews will be.
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Local Regulations: Some cities and counties in Florida have strict short-term rental laws. Always check local ordinances to ensure your property is in a vacation-rental-friendly zone. Websites like Florida Vacation Rental Law offer resources to help you navigate these rules.
#3. Be Prepared for Seasonal Ups and Downs
Unlike traditional rentals with steady monthly income, vacation rentals can have significant fluctuations in occupancy and revenue.
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Peak vs. Off-Peak Seasons: Florida’s peak seasons often align with holidays, school breaks, and winter months when northern tourists flock south. Off-peak months may require creative marketing strategies or offering discounted rates to attract bookings.
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Carrying Costs During Slow Periods: Even if your property isn’t occupied, you’ll still have to cover mortgage payments, utilities, insurance, and maintenance. Budgeting for these slower months is essential.
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Diversifying Guest Sources: Don’t rely on just one booking platform like Airbnb or VRBO. Listing your property on multiple platforms can help fill gaps during slower times.
Bonus Considerations Before Investing in Vacation Rentals
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Insurance Needs: Short-term rental insurance is different from standard homeowner’s insurance. Make sure you have coverage for guest-related damages and liability.
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Taxes and Deductions: You may qualify for deductions on mortgage interest, property taxes, maintenance, and depreciation. The IRS provides guidelines on deducting rental expenses.
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Marketing Your Property: Great photos, compelling descriptions, and positive guest reviews can make or break your occupancy rates.
Summary
Owning a vacation rental property can be a lucrative type of investment if you are aware of these 3 things you need to know before investing in vacation rentals in FL.