If you’re looking for new investment opportunities, here’s a list of the five best places to buy vacation rental property in Florida in 2023.
Table of Contents
- What Will Travel in Florida Look Like in 2023?
- Are Florida Vacation Rentals Profitable?
- How to Prepare Your Vacation Rental?
- The Top 10 Cities in Florida to Buy Vacation Rental Property for Investment in 2023
Deciding to buy a real estate property and seeking out new investment opportunities can be a huge turning point for you as an investor. However, your desire alone will not make any real impact on things.
You’ll need certain knowledge, tools, and experience—and, some would argue, a little bit of luck—to succeed in this venture.
If you’ve done your research, you’ve probably noticed that the demand for rental property in the market is currently hot. The number of renters is growing rapidly, with 2,654 new renters entering the real estate market daily. On a related note, about 544 people become landlords each day.
Since the numbers speak for themselves, today, we’ve decided to help you find the best places to buy vacation rental property in Florida in 2023.
A long-term plan is important in the vacation rental business. And we’re here to assist you in the process. Mashvisor’s goal is to guide investors through their investment plans and help them achieve the best possible outcomes.
So, if you’re currently looking to buy vacation rental property in Florida, keep reading to find out the most lucrative locations for investing in vacation rental properties.
What Will Travel in Florida Look Like in 2023?
Looking at a market forecast quite far into the future might seem like a waste of your precious time—and even an unreliable venture for investors—but that’s far from the truth.
Creating a long-term plan and doing year-long forecasts is necessary, and it helps investors locate the best places to buy vacation rental property in Florida.
As long as you’re looking for data and market insights in verified places and sticking to highly reliable sources and forecasts, they will be of great help to your investment portfolio.
Today’s emphasis is on Florida’s housing market—and the question of the hour seems to be “Where to buy an investment property?” So, the wise step would be to take a couple of minutes and look at the state’s tourism industry.
It is time to see if Florida’s real estate market will be in an enviable position for the remainder of 2022—and, more importantly, upon entering 2023.
Is the Florida Tourism Industry Blooming or Failing in 2022/2023?
We are glad to report that Florida’s tourism is in the best possible shape at the moment. The tourism industry is apparently making a light-speed comeback since the pandemic took over in 2020.
Investors who are currently considering the Florida market should not bother themselves too much with whether but where to buy their next investment property.
Before going over the locations we’ve singled out for you, here’s some first-hand information:
Between January and March of 2022, Florida welcomed 36 million tourists—reinforcing the idea that there’s a huge shift in the local tourism industry and the state’s economic situation. It is the first sign that can potentially refute the economists’ predictions that the Florida market will not fully recover until 2024.
It seems that Florida’s rental market may be able to get back on its feet by early to mid-2023, and we’re here to track the progress and point investors to the most lucrative locations.
At the current state of things, it’s safe to conclude that Florida’s visitors continue to break records and reclaim the Sunshine State as the best spot for investors to buy real estate property.
Here are some facts that can serve as a backbone for what we’ve said so far:
- In the first quarter of 2022, Florida welcomed over 1.3 million overseas tourists.
- For the first time in 2022, the demand for hotels and accommodation in Florida exceeded pre-pandemic levels.
- Some 39% of Florida’s visitors came by plane, significantly boosting air travel in recent years.
Related: 2022 Real Estate Market Forecast: Top 10 Predictions
Why Is Florida’s Rental Market Attractive to Investors?
If you’re still unsure if you should pursue your investment dream of buying real estate in Florida, here are some follow-up arguments that may encourage you:
We’ve already made a compelling argument that Florida’s real estate market is currently at its peak. In fact, it’s among the top five profitable markets in the US. It means that well-thought-out investment moves may bring investors huge turnovers and provide them with a secure income throughout the year.
In the last five years, Florida home values jumped by a shocking 69% due to high demand—with a 29.4% increase recorded in 2021 alone.
With the high demand for real estate in Florida comes an increase in population. The News World Report ranks Florida among the top ten fastest-growing places in the US between 2021 and 2022. The trend will likely continue into 2023, and more and more investors will be drawn to the Sunshine State, looking to buy any type of real estate that can secure profit.
An increase in population equals a higher demand for purchasing and renting out investment properties—so it’s safe to conclude:
Investing in Florida real estate is a no-brainer.
Another attractive point for investing in Florida’s real estate market is the ethnic diversity, the assortment of lifestyles, and other general reasons why people would go there in the first place.
Florida provides its visitors with a wide variety of choices. It offers a steady job market for individuals who are planning to extend their stay in this sunny place but also a dynamic lifestyle for those looking for a good time.
Are Florida Vacation Rentals Profitable?
Investing in vacation rentals in Florida is undoubtedly a venture that pretty much guarantees generous returns. The state’s real estate market managed to come out from the pandemic crisis that threatened the entire US housing market as a winner.
Considering the booming short-term rental market, investing here is more than a smart move for experienced and beginner investors alike. Even in the middle of 2020, Florida’s rental market managed to maintain an occupancy rate of roughly 50%.
The leading reason for investing in Florida’s rentals is the tropical climate. The state can boast about being able to enjoy warm weather all year long, and the best weather conditions are in cities in the south.
When choosing rentals in Florida, though, aim for locations that guarantee fair weather year-round—especially between May and September.
Although the emphasis is on tourism, many short-term rental owners rent their properties to people traveling for business purposes. Florida is home to many large corporations, and many Americans come here on business-related trips.
If you are a beginner investor and want to invest in Airbnb, here’s a guide to help you get started.
How to Prepare Your Vacation Rental?
Since we’ve established that the short-term rental business in Florida can be very lucrative, it is time to look at some pointers that are crucial for success if you decide to go on such a journey.
One of the key steps is preparing your Florida vacation rental for the season.
To help you grasp the idea of what you should do to make it welcoming, here’s a checklist for keeping your investment property in top shape:
Keep Handouts in English
The statistics suggest that most of the visitors will be native English speakers. However, your rentals may also be booked by someone who’s not a native speaker—meaning you can face a language barrier.
It is why you should keep your handouts—such as the ones that set forward house rules—in plain English. Keep it straightforward, and do not allow misunderstanding to result in major issues such as damage to your property.
Do a Deep Clean
It’s common knowledge that when a guest leaves your investment property, you’re obligated to clean it. It’s something you should take seriously.
Hiring a professional to deep clean your rental will save you the trouble and the time you would’ve spent doing it yourself.
Your guests expect to stay in a clean space, so it is considered an absolute MUST before your property is booked again.
Repaint/Do Some Touch-ups
The condition of your vacation rental won’t be as great as it was the first time you opened its doors to guests—and understandably so.
It is why regular touch-ups are inevitable in the real estate industry. Of course, they don’t need to be major repairs—especially if your budget doesn’t allow any.
But it would be good to inspect your property and handle minor repairs—such as repainting the rooms where guests spend the most time (living room and bedrooms) and replacing the light bulbs.
Make It a Smart Home
As you earn more money from your vacation rentals, you would be wise to redirect one part of your profit to upgrading the home’s technology. We’re living in a modern era—and people expect rentals to meet certain expectations tech-wise.
One way to do that is to replace old gadgets and appliances. Start with something simple, like buying a bigger flat-screen TV, and then slowly move your way up to the more expensive items, such as ovens, smart ACs, or security systems.
As a vacation rental property owner, it would be wise to upgrade and provide your guests with smart appliances for their convenience and enjoyment.
Replace Old Decorations
Decorative pillows, curtains, and rugs you bought when you first started renting out your property will go out of style at some point—and your guests will feel like they spent their vacation surrounded by outdated aesthetics.
Remember that the little things contribute to the visitor’s experience the most.
The best advice would be to go with all-time classics, universal, and minimalistic decorations that’ll stick for a long time. Don’t get caught up in current trends; they change too often—and you’ll drain your budget with the constant changes.
The key is to keep it simple.
Related: Tips on Furnishing a Rental Property
Read Your Reviews
And lastly, don’t forget to visit the website where you advertise your investment property and scroll through your reviews. Read the positive ones, of course—but stay a little longer on the not-so-good ones.
Reviews are, hands down, the best feedback you can get in the vacation rental business. Take into account every comment left by your guests—and, if needed, try to work on improving certain aspects of your property in due time.
The Top 5 Cities in Florida to Buy Vacation Rental Property for Investment in 2023
If you’re considering the Sunshine State as the place to start a vacation rental business, we would just like to note that you can’t go wrong with Florida. And that’s why we’ve compiled a list of the top five best places to buy vacation rental property in Florida below.
The cities are arranged from the highest to the lowest cash on cash return, based on Mashvisor’s latest monthly property data.
1. Fern Park
- Median Property Price: $267,130
- Average Price per Square Foot: $180
- Days on Market: 51
- Monthly Vacation Rental Income: $2,875
- Vacation Rental Cash on Cash Return: 5.18%
- Vacation Rental Daily Rate: $154
- Vacation Rental Occupancy Rate: 62%
- Walk Score: 57
For those who want to go on vacation but still feel “at home,” Fern Park—a small suburban community in Florida—is the perfect place for such a vacation. You can never go wrong with it as one of the best places to buy a vacation rental property in the state.
2. Palm Harbor
- Median Property Price: $528,342
- Average Price per Square Foot: $289
- Days on Market: 42
- Monthly Vacation Rental Income: $4,486
- Vacation Rental Cash on Cash Return: 5.09%
- Vacation Rental Daily Rate: $213
- Vacation Rental Occupancy Rate: 60%
- Walk Score: 64
Palm Harbor’s an ethnically-diverse area that welcomes visitors from around the world. Even more so, people who decide to spend their vacation days here will also get to experience the untouched beauty of Clearwater Beach, which is just around 8 miles from Palm Harbor.
3. Spring Hill
- Median Property Price: $376,485
- Average Price per Square Foot: $207
- Days on Market: 48
- Monthly Vacation Rental Income: $3,021
- Vacation Rental Cash on Cash Return: 4.90%
- Vacation Rental Daily Rate: $144
- Vacation Rental Occupancy Rate: 56%
- Walk Score: 36
One of many reasons why Spring Hill is among the top places for investing in Florida’s short-term rentals is the underwater mermaid shows. The spectacular underwater shows take place at Weeki Wachee Springs State Park. They are the perfect attraction for families on summer vacation.
4. Deer Island
- Median Property Price: $478,783
- Average Price per Square Foot: $218
- Days on Market: 142
- Monthly Vacation Rental Income: $3,453
- Vacation Rental Cash on Cash Return: 4.88%
- Vacation Rental Daily Rate: $146
- Vacation Rental Occupancy Rate: 52%
- Walk Score: 7
Deer Island is arguably the best vacation destination for individuals and families who want to enjoy the natural beauty of the five-mile walkway the island features—with fun activities such as fishing, sightseeing, cycling, and picnicking.
5. Crystal River
- Median Property Price: $476,874
- Average Price per Square Foot: $263
- Days on Market: 60
- Monthly Vacation Rental Income: $3,450
- Vacation Rental Cash on Cash Return: 4.34%
- Vacation Rental Daily Rate: $197
- Vacation Rental Occupancy Rate: 54%
- Walk Score: 51
Western Florida’s Crystal River is an attractive destination for fishing enthusiasts. The city is famous for offering a world-class fishing experience. Visitors from all over the world come here to enjoy not only the sport but the crystal-clear blue waters, too.
Related: Is Real Estate Investing Recession Proof?
Final Verdict
We’ve successfully closed the topic on investing in Florida’s vacation rentals. Let’s just go over the main takeaways and do a quick recap of sorts.
In terms of investing in Florida’s real estate market, know that it’s a good idea, given that it’s been able to cope with the considerable—and generally devastating— consequences of COVID-19 back in 2020.
Here’s something to consider:
In the first quarter of 2022, Florida welcomed roughly 1.3 tourists from overseas. Experts predict that the market will experience a complete turnaround in 2024—but the migration and demand for vacation rentals suggest that it could happen even earlier.
Although Florida’s favorable weather conditions are its number one attraction, many people come here for short-term business purposes, as well.
When it’s time to prepare your vacation rental, keep the following things in mind:
Making house rules clear and understandable, doing minor touch-ups, reading reviews, deep cleaning, and upgrading the technology are all essential components of running a successful rental business.
And just to remind you, the best five places to invest in vacation rentals are Palm Harbor, Deer Island, Crystal River, Spring Hill, and Fern Park.
Mashvisor’s here to assist you during your investment journey—and help you develop a solid investment strategy that’s bound to generate profit.
Identifying the best places to buy vacation rental property in Florida 2023 is made easier with Mashvisor’s investment property search feature. It is designed and developed to assist investors in pinpointing the most profitable locations for their future investments.
Let us help you in your search for the best places to invest in Florida in 2023.
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