Buying for Short term rental

Buying in Florida for Short Term Rental

Introduction – Explanation of zoning – Definition short v long term.

In theory the financial advantage or disadvantage of long term rentals against short term rentals is fairly straightforward - between whether or not a property will bring in more income at a lower cost over a year with a long term rental in place than with holidaymakers renting for one or two weeks at a time throughout the year.

However in Florida zoning laws can be the deciding factor as to which option you may chose. These laws determine whether there is a minimum time a property can be rented out for - it may be 4 times a year - 12 times a year - monthly, fortnightly or indeed any time limits or no restrictions.

These zoning restrictions vary between counties, some have few restrictions and thus allow short term rentals others do not allow rentals for less than a month. Additionally just to complicate matters individual developments may have their own rules which can be harsher than the counties - so simply because a county has no restrictions, does not mean short term rentals are allowed.

A word of warning, all too often you will be given incorrect information on this vital area - and worse still the information given will sound very convincing but at best is often only half the story. If you are thinking about spending several hundred thousand dollars to buy a property in Florida its worthwhile having an independent review first to cover all these points Click here for more details. or if you prefer we can give you details of Realtors with a good track record of satisfied clients.

Short-term rentals can be a good choice if you wish to make use of the property yourself during the year and also want some rental income to cover costs. Although you can use a management company to take care of everything including bookings, the best way to generate income is to advertise the property yourself. Money generated this way is free of commission. The other major point with short-term rentals- don’t buy in an area solely because it allows short-term rentals. One day you may wish to sell the property and therefore the desirability of the area for resale is a critical factor.

Short term rental property investment does necessitate an initial outlay to completely furnish and equip the property and you are responsible for all the costs incurred including, taxes, insurances, management, lawn care, pool care, pest control, electricity, water, TV / cable, phone etc.

You need to be aware of the different zoning regulations, which determine rental periods. However you will not always be given the necessary information. On several occasions potential property buyers been given information on developments indicating short term rentals are allowable, which, on checking turned out to be incorrect.

Many British travel brochures advertising villa holidays in Florida carry adverts for properties, which are not, zoned for short term holiday rentals. If there is a complaint from neighbours or intervention by the zoning authorities, severe penalties can be levied.

The days of viewing Florida as synonymous with Orlando are disappearing as visitors, initially attracted by the theme parks experience, move on. The Florida sunshine remains all important but having ‘been there and done Orlando!’ many are seeking a wider range of experiences, activities and cultural opportunities.

Although Orlando was once a good investment location, from the perspective of capital growth, recent figures indicate a high proportion of buyers from Britain bought when the Dollar was low - and intensive marketing that included guaranteed rentals was being promoted. However the days of an Orlando monopoly on popularity has started to dissipate as investors and second home owners increasingly become aware of alternatives – indeed some, taking advantage of their gains, are selling their Orlando property, in response to an endless supply of new build property in Central Florida and reinvesting elsewhere in Florida.

For those investors where capital growth is key, there have been higher gains in other areas of Florida, property on waterfront localities with limited supply and an ever increasing demand particularly from retirees and snowbirds who don’t want be in a large Metropolis or surrounded by theme parks. The serenity and quality of coastal areas like Sarasota, Naples and Boca Raton continue to enjoy excellent investment growth. A word of warning, However simply because an area shot up in value one year may not be an indicator that growth will continue, many a Brit has been persuaded to buy on the basis of out of date figures so again seek impartial advice before starting your property search.Many a glossy brochure and impressive looking spread-sheet contains figures that distort the present property growth position - indeed on certain developments and areas of prices are more likely to fall than rise.

If rental income is key to covering mortgage costs there are several concerns. The sheer number of British buyers over the past couple of years in the Orlando area and rapidly increasing apartment resorts begs the question, where will all the additional renters come from – Americans take short holidays and conference delegates prefer hotels, the market for holidaymakers visiting Orlando is increasingly competitive.

From the perspective of risk management there are several considerations –when you want to sell, the desirability of your property is critical. Certain developments in Kissimmee monopolised by rental properties, have particular problems. Areas surrounded by empty houses in very transient neighbourhoods, apart from being a potential security risk are not easily going to sell to the American homebuyer, if the British become less interested; whereas Gulf and Atlantic resorts retain demand from both American and International buyers.

As there are only a few developments in Sarasota / Bradenton, Naples and other areas of the Gulf Coast which allow short term rentals, the competition to obtain rental income is not so cut throat as in the Orlando area. If you are considering a property for short term rental use beware of the hype which is so prevalent at the moment - we can recommend realistic and experienced Agents throghout Florida including Orlando, Sarasota, Bradenton, Rotonda, Naples etc. In fact the Realtor we recommend in Orlando is a British Chartered Surveyor - we feel strongly a professional approach is far more important than the usual sales spiel.

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Latest news
I have been commissioned to write an in depth article on the truth behind claims on the rental market in Florida, following considerable feedback from Readers relating to concerns by recent buyers to so called guarantee schemes that seem to be heavily featured in adverts in Britain for Florida properties. - the Author can be contacted by clicking here for facts behind the rental market.

Before investing on a property in Florida it may be worth obtaining an impartial,independent perspective on the market and the trends. Click here for more information.