Melissa Donnahoe, broker / owner

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By Melissa Donnahoe

Five Reasons to invest in vacation rental property in South Florida

The beach is a great place to invest in vacation rental property

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Royal Empire Realty specializes in investment properties, and our clients often want to invest in vacation rental properties, in particular. 

Why? Because an investment in a vacation rental is all about location. You want to invest in a popular vacation destination, where people are booking trips no matter the season. You want your income-producing investment to be steady and withstand declines in tourism elsewhere. 

South Florida is that perfect place. Here are my top five reasons to invest in vacation rental property.

1. South Florida real estate is only increasing in value

An investment in the South Florida housing market of any kind is a worthwhile venture right now. The demand for housing has been outpacing supply for years. South Florida is still growing, but experts don’t anticipate supply catching up with demand for a while. That means that property values are only going to increase for the time being.

With proper maintenance and care, your vacation rental property will become more valuable over the next several years. Royal Empire Realty can help you find the perfect location within your goals and budget to help you capitalize on today’s thriving vacation rental market.

2. Vacation rentals can bring in higher income than traditional rent

Vacation properties are short-term rental situations. That means the home doesn’t have to be rented out 100% to make back the money you’re pouring into it. It also means you have greater opportunity for higher income. 

For example: A three-bedroom home in Fort Lauderdale might rent out to a local family for $2,500 a month. However, a three-bedroom vacation home in the same neighborhood can easily go for $400 a night. 

In our example, the threshold for breaking even on your investment  involves finding vacationers to stay at your rental an average of seven nights per month. If you book out a couple long weekends or a week-long stay per month, you’re already making more in rent than you would with a year-long lease. 

Investors in longer-term rental properties lose money when they’re transitioning in between renters. For short-term vacation rentals, that transition isn’t as detrimental to the bottom line.

3. People vacation in South Florida all year long

Unlike other vacation hotspots, South Florida remains a popular vacation destination all year round. We aren’t reliant on a particular season or specific event to draw tourists into the area. 

Our off-season is during the summer months, when the temperatures get hotter than ideal. However, even those months aren’t as much of a slump as an off-season elsewhere. Families with school-age children still take summers to travel to the beach or visit their grandparents. 

Further, South Florida is growing in prominence in ways that aren’t reliant on the waves and sun alone. Events like Miami’s Ultra Music Festival, the Pompano Beach Seafood Festival, Fort Lauderdale’s Tortuga Music Festival and the International Film Festival mean that area draws tourists of all types. And events are prolific in South Florida, giving vacationioners endless excuses to book vacations at any month of the year.

4. You don’t have to buy a property right on the beach

While beachfront properties can be immensely profitable, a view of the ocean isn’t required to capitalize on the vacation hotspot. Savvy vacationers know that there are great places to rent within walking or biking distance of the beach. 

Even inland cities provide great opportunities to invest in vacation rental properties. Places like Coral Springs are in high demand but not as readily available on vacation rental search sites. 

5. You’ll have a new vacation spot of your own

Short-term rentals means that you can choose when the property isn’t available because you need it for your own vacation. When you use your own vacation home in your private getaway,  you can afford a longer vacation. You won’t pay extra for the optimal vacation times. Plus, you’re saving money overall every time you don’t book a stay with someone else.

Pick a location where you already vacation or where you would like to frequently visit. Royal Empire Realty can suggest some great locations that have the number of bedrooms and space you’d need, a private pool and a level of luxury you will be proud to offer your personal guests.

Things to consider: 

  1. Not all cities allow short-term rentals. Short-term rental properties can be tricky if you’re not well versed in the ordinances of the local area. First, make sure you know which city your selected property is in, as city boundaries in South Florida can be tricky. Then, research how local policy could affect your short-term rentals plans for the property.

  1. Not all locations in South Florida offer the same income-producing benefits. It takes a local expert or a lot of research to know which neighborhoods will give you the best value for your investment. Make sure you have a good idea where tourists want to stay and what type of tourist you’d like to cater to.

  1. Property maintenance from a distance can be tricky. Unless you have trusted contacts nearby, be prepared to budget for a property manager or property management company. You’ll need someone you can rely on to arrange for cleaning between guests, handle minor repairs and maintenance and let you know when the property needs closer attention.

  1. Keeping a property rented out requires an investment of time and often money. Make sure you have a plan in place for how you will advertise the property and how much that will cost. Along with online rental sites, consider advertising your property on your own website. This may save you money in the long run, especially if you have more than one rental property.

If you’re ready to invest in vacation rental property, Royal Empire Realty is ready to help you grow your Empire! We take the time to listen to your personal goals and will help you find exactly the property you need to meet those goals. Call us today and start cashing in on your vacation rental investment.

Headshot of Melissa Donnahoe

Melissa Donnahoe is the Broker/Owner of Royal Empire Realty, powered by SELLSTATE. She was born and raised in Florida and is extremely familiar with the area and the ever-changing real estate market. She has worked in both Residential and Commercial Real Estate and has been involved in hundreds of transactions.

She is not just a Realtor, but an investor as well. She works with other investors to show them how to leverage their time and money through her knowledge, experience and amazing team of professionals.

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