Best place for Air BnB investment in Florida?

[Michael Furey]

Hi, I’m new to all of this and want to get into the air BnB world and looking to buy a condo or house in FL.  What is the best city in Florida (assuming on a beach) where I can not only charge a good amount, but more importantly will have consistent year round rentals?  Looking for a 2 or 3 bedroom place and can fix it up if need be. 

[John Underwood]

Destin, Panama City Beach, Ft Lauderdale etc. Lots of great places to pick from. Go for a house over a condo if you can.

[Luke Carl]

Wherever the wife likes to go on vacation 

[Michael Furey]

Quote from @John Underwood:

Destin, Panama City Beach, Ft Lauderdale etc. Lots of great places to pick from. Go for a house over a condo if you can.

2 questions…first, what are your thoughts on areas in the northern part or panhandle where it might not be beach weather year round?  I was thinking further south so it can be booked year round. 
second, any reason why a house over a condo?  We were thinking a condo would be better since there might not be as much maintenance. 

[Jonathan Greene]

Florida is ripe with a million potential spots for Airbnb, but you should focus on the ones that have always had STR even before Airbnb because then you know they are sticking with it. I agree with @John Underwood on Destin if you can find something. Crystal River has gotten hot lately. I think Lakeland is sneaky pick as well.

[Matt "Roar" Gardner]

Just to reiterate the great advice so far, it depends...lol 

If you want consistency, a downtown STR in a bigger metro will probably provide that for you; however, you'll have to battle the regulations of a city which seem to be always changing.

As an agent and investor in the Destin and Tampa markets, I like how they are regional, drivable destinations.  I accept that the returns will be seasonal, but even seasonal destinations can produce fantastic returns! 

I wish you the best of luck!

[Kristina Kuba]

I would recommend the panhandle for vacation seasonal STRs. Tampa for consistent metro STRs.

[Nathan Gesner]

Do a lot of research. I was looking at the Florida market a couple months back and it's over-priced. Houses prices were astronomical and based on short-term rental income of the last two years, which I believe is an anomaly. I looked along the Emerald Coast, Tampa, and several other areas and even the best performers weren't doing that great. Just as an example, I could have bought a $1 million property in Destin and it would earn less than I do with my local short-term rental that I bought for $170,000 a few years ago. If the market turns, a lot of people will be stuck with losers.

[Jeff Roth]

I would want to be in a location that had existing short term rental management companies with proven track records--preferably more than one company to choose from. Agree, the further south you go in Florida the more likely you are to have year round bookings. I would also want the long term tenant market rent to be close to covering holding costs if something should change in the short term rental market. Also agree a house is better than a condo as you don't want to go into business with the HOA who can change the rules on you for short term rentals.

[J-Ryan Stewart]

Quote from @Nathan Gesner:

Do a lot of research. I was looking at the Florida market a couple months back and it's over-priced. Houses prices were astronomical and based on short-term rental income of the last two years, which I believe is an anomaly. I looked along the Emerald Coast, Tampa, and several other areas and even the best performers weren't doing that great. Just as an example, I could have bought a $1 million property in Destin and it would earn less than I do with my local short-term rental that I bought for $170,000 a few years ago. If the market turns, a lot of people will be stuck with losers.

There's a lot of truth to this, but it applies directly to buying *new properties or entering a new market. It just means that if you're looking to get into STR, inflated home prices make your operating expenses too high for STR to be viable.

I think there are two ways you can approach it:
- You can identify properties you already own that would be more profitable converted to STR (given updates & furnishing costs)
- You can connect with other investors/homeowners and apply whatever management solution you're already using for your own STR to *their property. If you're already running your own places as STR it would just take an extra layer of admin to your current model to start "taking clients" and leveraging their properties. 


These strategies would insulate you from these current market limitations and shift some liability to someone else since you're only providing a service. 

[Ryan Moyer]

Beaches have tough margins right now, though they have much more appreciation potential.

A house doing $150k in the Panhandle will likely cost $1.5M and have heavy seasonality where any major issue during the high season could really wreck your year (if your June or July gets wiped out due to some major capex or something like that it will knock like 30% off of your annual revenue in one fell swoop).

A house outside Orlando doing $150k costs $850k + $75k in theming and rents out pretty consistently year round with only a little seasonality to worry about.

The flipside is that near-beach land in the heart of the panhandle is a scarce and limited resource, while the area outside Orlando has plenty of empty space for new developments, so if you're looking for long term appreciation over 30 years there's probably a lot more meat still left on the bone for the beach properties.  But you're paying 40% more for the same revenue right now.

[Shawn McCormick]

@Michael Furey Lots of good advice and information here for you to digest. Still lots of questions to be answered and considerations..

where do you want to spend time at, choose a location that suits your vacation needs too..

taxes and insurance will be huge factors in beach cities...

regulations are just plain hard to keep up with if you aren't local...

condo fees will be likely way too high in beach areas and kill your ROI...

good, consistant, experienced PMs/hosts in some areas

travel to and from your location..from airport, from beaches, toll roads, etc will they have to have connecting flights, then rent a car and drive another hour?

how well known is the area you are looking to go for the huge International vacationers that come to Florida

Orlando gets my vote on all of these questions, it was built for STR and has dozens of communities that are designated for STR usage. Our inventory is getting much better and you will have better luck finding a motivated seller.

Hope this helps. Best of luck!

[Jason Regan]

I have an Airbnb in Kissimme that's about 15 minutes from Disney that is doing well for me. I bought here as I know there may be dips in visitation( Like now), but the demand will always be there. Also there is a convention center nearby. Randomly what I am seeing now is that I am getting a lot of weekend guests just looking to use the amenities around the HOA.

[J-Ryan Stewart]

Quote from @Jonathan Greene:

Florida is ripe with a million potential spots for Airbnb, but you should focus on the ones that have always had STR even before Airbnb because then you know they are sticking with it. I agree with @John Underwood on Destin if you can find something. Crystal River has gotten hot lately. I think Lakeland is sneaky pick as well.

 I'm in the Tampa Bay area. It's a small market but healthy. If you come here I recommend targeting 3BR and up. The market saturation of 2BR homes is extreme. As a matter of fact look at the available homes in whatever area you look at & see what gaps you could fill.

As far as Lakeland, it's pretty limited. Rates are low & inventory isn't impressive. Dev'ing a luxury accommodations market could work but I wouldn't just pop up apartments or small listings. Inflated home prices & rents give STR pretty thin margins in that area, at least for now. Probably not great to get your feet wet. Other locations mentioned like Destin are seen more as vacation destinations. Tampa has a lot more business travel so seasonality is more even.

Hope that helps! 

[Alex Papai]

Look where others aren't... This can apply on a macro or micro level.

For example: Why not look at really old or ugly buildings... that you can spruce up and make habitable? 

That seasonality that people are mentioning... means competition comes down 5 rooms at the motel 8 for 500/night...Or $400/night for the same amount of beds at your place that you purchased for $350k...

As a general rule of thumb i use 20% of market price as my revenue target... and a 20%-40% margin (cash on cash) with today's 20% down 7% investment loans. (Largely Depending on if you're self managing or paying up to 25% of gross)

I operate out of New Orleans and focus on the market from here to Panama City Beach - would love to chat and maybe pass a deal on =]

- Alex

(504)515-2005

[Erin Dreher]

We have a house in Pensacola - we aren't doing Air BnB yet but plan to. We chose that area because its closer to people that drive in from surrounding states. I am sure there is a market down southern Florida. To be honest what part of Florida that has beaches is bad! Everyone escapes and takes the vacation to the Florida beaches. Something else that enticed us was that have made quite a few resources there. Talk with some realtors down there and see if you meet one that really is connected. 

I know a few.. happy to share some folks that are well connected with contractors. property managers, cleaners etc. 

[Kyle Momany]

I'd recommend the Pensacola area or even the Forgotten Coast ( Port St. Joe, Mexico Beach). As mentioned above, finding the area's that aren't talked about as much could be great right now. If you're wanting to be in a more established STR area, Destin & Panama City Beach are great as well. Airdna released data a few weeks ago that Panama City Beach was one of the highest nightly rate increases across the US! Our 5 bedroom on the east end has reflected that.

Let me know if you've got any questions, best of luck!

[Cameron Johansson]

Perdido key to destin fl is a great area to look in 

[John Oden]

Quote from @Michael Furey:

Quote from @John Underwood:

Destin, Panama City Beach, Ft Lauderdale etc. Lots of great places to pick from. Go for a house over a condo if you can.

2 questions…first, what are your thoughts on areas in the northern part or panhandle where it might not be beach weather year round?  I was thinking further south so it can be booked year round. 
second, any reason why a house over a condo?  We were thinking a condo would be better since there might not be as much maintenance. 

A multifamily (condo) property is a negative in my opinion, because too many other people's problems can be come your problem: 1) potential noisy and disruptive guests above, below and side to side. Your guests can create noise problems up, down, left, right. Parking can be an issue - how to get the guests through the gate and into the proper parking spot. Guests above create a water leak situation that rains down on your guests. Your unit creates a water leak situation for the owner below. 

Regarding maintenance, the only benefit to a condo is the roof, and possibly (but most likely not) windows. You are still responsible for all mechanical systems within your unit - plumbing, electrical, HVAC, so no condo benefit there.

Condos are in many cases are on the beach, which in my opinion attracts the party crowd. We only do single-family homes. Our homes are located in desirable areas near the beach, but not on the beach. We use pricing and high-quality properties to screen our guests before they ever book. It has worked out exceptionally well for us. Many folks do well with condos - just offering an alternative opinion.

All the best,
John