Top 5 Tips for First-Time Investors Looking For a STR in Florida

Ready to dive into the world of real estate investing with a vacation rental in Florida's stunning Panhandle? From Destin to Panama City Beach, this region offers unparalleled investment opportunities for new investors. But before you sign on the dotted line, here are five crucial tips to keep in mind:

1. Location is Key—But It’s Not Just About the Beach

When most people think of Florida real estate, they imagine beachfront homes with sweeping Gulf views. While oceanfront properties in Destin or Panama City Beach are fantastic investments, don’t overlook the value of homes a little further inland.

Properties just a few blocks from the beach often offer lower purchase prices, but can still attract renters looking for easy access to the shore. Additionally, homes near popular attractions, shopping districts, and dining spots can see higher demand and rental rates. For example, in Panama City Beach, proximity to Pier Park or St. Andrews State Park can make a home more desirable to visitors who want convenience and options beyond the beach.

2. Know Your Market: Short-Term vs. Long-Term Rentals

As a new investor, it’s crucial to decide upfront whether you want to focus on short-term vacation rentals or long-term tenants. While short-term rentals (less than 30 days) in areas like Destin and Panama City Beach often bring in higher revenue during peak seasons, long-term rentals offer more stability and less management work.

Understanding your goals is key. If you're leaning towards short-term, ensure you're familiar with local regulations, as some cities have specific rules regarding minimum stay requirements and registration for vacation rentals. Destin, for instance, has areas where homeowners associations may limit short-term rentals, while Panama City Beach tends to be more lenient. Make sure you’ve done your homework!

3. Factor in Management Costs

Managing a vacation rental isn’t just about posting your property on Airbnb and waiting for the bookings to roll in. You’ll need a team (or a great property management company) to handle cleaning, maintenance, guest communication, and marketing. Many first-time investors underestimate how much time and effort it takes to manage a short-term rental.

Hiring a local property management company in Destin or Panama City Beach can save you time and ensure that your property gets five-star reviews. However, it’s important to factor these management fees into your calculations—property managers typically charge around 15-25% of your rental income. Make sure you crunch the numbers and understand how this will affect your return on investment (ROI). And if you need recommendations I work with some of the best in the business and am happy to refer you!

4. Furnish Smartly for Maximum Returns

The way you furnish your vacation rental can make or break its success. Guests in Destin and Panama City Beach are looking for comfortable, stylish, and functional spaces. You don’t need to splurge on high-end designer pieces, but your home should reflect the laid-back, beachy vibes people expect when visiting the Panhandle. Think coastal-inspired decor, cozy outdoor spaces, and family-friendly amenities like a fully stocked kitchen and entertainment options.

Also, be strategic. Simple touches like beach towels, toys, or a guidebook highlighting local gems can turn a four-star review into a five-star one. The higher your rating, the more bookings (and income) you’ll get.

5. Understand Financing Options

For first-time investors, securing financing for a vacation rental can feel intimidating. In many cases, lenders will view a second property or investment home differently than a primary residence, often requiring a larger down payment and higher interest rates. However, if you plan to rent the home regularly, you may qualify for an investment property loan.

It’s wise to shop around for lenders who understand the unique dynamics of Florida’s vacation rental market. Be prepared to show evidence of projected rental income, especially if you’re buying in a popular market like Destin or Panama City Beach. Many new investors opt for short-term vacation loans, which are designed to help investors purchase properties specifically for Airbnb-style rentals.

Investing in a vacation rental in Florida’s Panhandle can be both profitable and rewarding, especially for new real estate investors. By considering these key factors—location, rental type, management costs, furnishing, and financing—you’ll be well on your way to turning your property into a successful, income-generating asset. With its gorgeous beaches, tourist appeal, and affordability, the Panhandle might just be the perfect place to launch your real estate investment journey.