Real Estate

Florida is king for short-term rental investors: study

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Enviable weather, ocean views and a long list of historic tourist attractions make Florida a treasure trove for short-term rental investors.

A smart real estate The market analysis was published on Tuesday. Strong property values, strong population growth, and year-round tourist demand have made Tampa, Orlando, Jacksonville and Miami the top cities for short-term rentals on Airbnb and other platforms.

“For 2024, Tampa, Florida took the crown as the nation’s best short-term rental market, followed closely by Orlando and Jacksonville,” the report said. “All three enjoy strong demand and an above-average number of properties suitable for Airbnbs.”

Tampa, Orlando, Jacksonville and Miami have above-average total active inventory and inventory suitable for short-term rentals. Tampa, for example, has more than three times the active inventory of the 50 largest U.S. metros, and a share of short-term foreclosure listings that is 160 percent higher than the average.

“Tampa’s affordable real estate value may be tied to how many properties are on the market — 16,020, according to Zillow. That’s more than 3 times the city median (5,297),” the report read. “About 2.06 percent of them are suitable for Airbnbs, which ranks seventh among the cities studied and 160 percent higher than the average.”

Each city also had high occupancy rates and solid annual incomes.

Orlando had the highest occupancy rate among Florida cities (46 percent) thanks to its many theme parks, including Walt Disney World, Universal Orlando, SeaWorld Orlando and Legoland Florida. Meanwhile, Miami ($62,957) led Tampa ($52,705), Orlando ($42,338) and Jacksonville ($56,878) in average annual Airbnb revenue.

“The greater Miami area is the most populous area in Florida, offering a combination of warm weather and metropolitan living for recent transplants from other major cities,” the report said of Miami’s median annual income. “These newcomers to the area have helped increase home prices by 66.1 percent over the past five years, second only to Tampa.”

“Add in the steady flow of tourists as well as domestic and international business travelers, and investors have all the makings of a strong short-term rental market,” he added.

While Florida had a big presence on the list, it’s not the only place where short-term rental investors can find their golden goose. Boston; Buffalo, New York; Columbus, Ohio; Chicago; Providence, Rhode Island; Kansas City, Missouri; San Diego; Hartford, Connecticut; Nashville, Tennessee; Phoenix; And Cleveland made the top 15 thanks to high occupancy rates, median annual income and property value growth.

At the other end of the spectrum, San Jose, California; Birmingham, Alabama; San Antonio, Texas; Houston; Sacramento, California; Raleigh, North Carolina; Riverside, California; San Francisco; Oklahoma City; And Pittsburgh was ranked among the worst markets for short-term rental investors.

“Not every city is suitable for Airbnb investors, whether due to high costs, low demand, lack of suitable housing, or strict local laws and regulations,” the report said. “Those familiar with California’s skyrocketing real estate prices won’t be surprised to see the Golden State in four of the bottom 10 spots.”

“Worse still, there are relatively few properties, even for investors who can afford them,” the report continued. “San Jose has 1,296 listed properties, according to Zillow, which is second-most among the cities in our study and 76 percent less than the median city.”

“Of the property listings reviewed, San Jose (0.41 percent) has about half the city average (0.79 percent) that are suitable for Airbnbs.”

Beyond market performance indicators, Clever said investors should keep an eye on overall consumer sentiment toward Airbnb and other short-term rental sites.

76 percent of travelers in the Clever survey said they have a positive view of short-term rentals; However, high rental costs and associated fees have forced a growing majority of travelers to choose hotels when traveling solo (58 percent), traveling to a new country (48 percent) or visiting destinations Traveling to places they are unfamiliar with (47 percent).

Respondents said that greater listing accuracy, better safety and security protocols and faster host response will make them more willing to resume choosing short-term rentals over hotels, i.e. Airbnb, VRBO and other platforms. There is still room for success when customer service is prioritized. .

“Overall, only 57 percent of respondents say they look at Airbnb listings before booking travel,” the report said. “This is true even when they say they are 2 times more likely to report a bad experience in a hotel (54 percent) than a short-term rental (25 percent).”

“Some may see this as a sign of continued difficulty overcoming old habits of travelers who only consider hotels,” he added. “However, it’s also evidence of how much untapped demand for short-term rentals could potentially be out there, ready to be turned into cash for hard-working investors.”

Email Marian McPherson.

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