No doubt about it – Florida’s short-term rental markets are flourishing. From Naples to Miami, here’s our list of the most profitable rental opportunities in 2023. Keep reading to find out who takes the number one spot!
Why Should You Invest in Florida’s Airbnb Markets?
The sunshine state welcomes approximately 808 new residents per day. For the first time since 1957, the state has the fastest-growing population in the United States. Florida incurred a 36 percent increase in rental prices from the first month of 2020 to the last month of 2022, with rent in metropolises like Miami, Tampa, and Fort Myers drastically increasing since 2020. In fact, rental prices have exponentially grown to the point that they’ve surpassed the prices predicted by historical trends. According to the Waller, Weeks, and Johnson Rental Index, a rental market is considered “overvalued” when it exceeds projections. Of the 25 most overvalued rental markets nationwide, costs range from 7.06 percent to 18.05 percent higher than predictions. Florida is home to nine: Cape Coral (ranked #1), Miami (#2), North Port (#3), Tampa (#7), Orlando (#12), Deltona (#14), Palm Bay (#16), Jacksonville (#18), and Lakeland (#21).
1. KEY WEST
The southernmost city in the continental United States, Key West, is home to a wide range of cultural influences. Visitors can take in the colorful architecture, visit the iconic home of author Ernest Hemingway, watch the beautiful sunset from Mallory Square, or walk along Duval Street’s crowded strip, jam-packed with restaurants and unique shops. This island is a secluded paradise for tourists, making it one of the best places for a short-term rental.
- Average Daily Rate: $565
- Occupancy Rate: 73%
- Median Monthly revenue: $8,326
- Avg. Annual Revenue: $140.1K
2. CLEARWATER BEACH
From beachfront views, scenic canals, white sand, and pristine waters, it’s no secret why Clearwater is the perfect paradise for travelers. The city’s known for its family-friendly atmosphere, offering plenty of activities, including golf courses and boat tours, to shopping destinations like Clearwater Mall. It even has a bustling nightlife with restaurants and music venues on every corner. Currently, Airbnb makes up 40% of the market share for listings. Occupancy rates fluctuate by season. In March, occupancy rates spiked to 94%, while in September, they decreased to 63%. Despite seasonal changes in tourism, a short- term rental in sunny Clearwater, FL, investors can expect a steady stream of cash year-round.
- Average Daily Rate: $265
- Occupancy Rate: 77%
- Median Monthly Revenue: $4,320
- Avg. Annual Revenue: $67.4K
3. VERO BEACH
A small city with gorgeous, white sandy beaches facing the Atlantic Ocean, Vero Beach lures thousands of visitors yearly with its laid-back vibe and exciting attractions. Although the cost of living is below the national average at 3%, the median property price continues to rise and is now in the $700,000 range.
- Median Property Price: $727,992
- Average Price per Square Foot: $294
- Monthly Traditional Rental Income: $2,618
- Traditional Cash on Cash Return: 4.26%
- Traditional Cap Rate: 4.37%
Naples, FL, is a city that has become increasingly popular for short-term rental investing. Its perfect combination of affordability, predictable income, high-end shopping, and luxury golf courses makes it a popular destination spot for tourists and business travelers year-round. With an attractive cash-on-cash return, Naples is a prime location for a lucrative investment property.
- Airbnb Rental Income: $3,749
- Airbnb Cash on Cash Return: 2.52%
- Airbnb Daily Rate: $287
- Airbnb Occupancy Rate: 52%
5. PANAMA CITY, FL
Located right on the Gulf of Mexico, the city’s picturesque sights, warm tropical climate, and vibrant culture make it a stand-out destination for anyone looking to invest in Airbnb short-term rentals. Panama City also boasts some of the best real estate values in Florida. And with its low cost of living, it’s quickly becoming an attractive option for investors looking to make a good return on investment in a short time.
- Airbnb Rental Income: $2,919
- Airbnb Cash on Cash Return: 4.84%
- Airbnb Daily Rate: $209
- Airbnb Occupancy Rate: 48%
The fast-paced city known for its energetic nightlife ranks number 6 on Mashfinders’ list of top 10 US markets with the highest number of active Airbnb rental properties. Miami has over 4,004 listings, with an average daily rate of $275, with investors expecting an Airbnb cash-on-cash return of 1.75%.
- Average Daily Rate (ADR) is $311 (March)
- Average Occupancy Rate is 86% (February)
- Average Monthly Revenue is $6,000 (March)
Looking to transform your Florida short-term rental into a tourist’s paradise?
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Vincent, Julia. “Florida Airbnb Demand by City in 2022: 10 Top Locations.” Investment Property Tips | Mashvisor Real Estate Blog, 23 Feb. 2022, https://www.mashvisor.com/blog/florida-airbnb-demand-by-city/.