Short-Term Potential: The Top 10 Florida Cities for Profitable STRs in 2023

Short-term rentals (STRs), properties rented out for typically fewer than 30 days, have grown in popularity due to the rise of online platforms like Airbnb and VRBO. These platforms have facilitated connections between property owners and potential renters, contributing to the sharing economy. STRs, ranging from furnished apartments to entire homes, offer travelers the comfort, privacy, and convenience of a home-like environment, making them a preferred alternative to traditional hotel accommodations. For property owners, STRs present a profitable way to utilize their vacant properties or spare rooms.

Investing in STRs comes with its benefits and challenges. On the plus side, STRs can generate higher monthly income than long-term rentals due to higher nightly rates. They also offer owners the flexibility to use the property when it’s not rented out and maintain control over its condition. However, STRs involve frequent tenant turnover, leading to more time and resources spent on cleaning, maintenance, and marketing. Income from STRs can also be inconsistent, especially during off-peak seasons, and some cities have strict rules and regulations governing STRs.

When considering an STR investment, looking at the location, amenities, market demand, local regulations, and property condition is essential. Properties in tourist areas, business districts, or near major attractions tend to have higher demand. Amenities like Wi-Fi, a well-equipped kitchen, and comfortable furnishings make properties more attractive to renters. Understanding the local market, laws, and regulations related to STRs and considering the property’s condition and potential repair and maintenance costs are also crucial.

With its booming economy, growing population, and numerous tourist attractions, Florida has emerged as a promising hub for residential real estate investments, particularly STRs. However, pinpointing the best investment opportunities can be challenging with its vast area and diverse cities. To help you navigate, we’ve identified the top 10 cities in Florida for STR investments, considering factors such as median property price, monthly STR income, and cash-on-cash return.

In the world of short-term real estate investing, one region has consistently caught the eyes of savvy investors: Florida. With its booming economy, growing population, the plethora of tourist attractions, and appealing lifestyle offerings, it’s no surprise that Florida is rising as a promising hub for residential real estate investments. However, with its vast area and diverse cities, navigating and pinpointing the best investment opportunities can be challenging. Fear not; we’ve identified the top 10 cities in Florida for short-term residential real estate investments.

Top 10 Cities for Short-Term Real Estate Investments in Florida

1. Brandon: Known for its suburban charm, Brandon is located just east of Tampa. It offers a balanced mix of residential and commercial real estate, making it a promising market for investors seeking short-term rental opportunities. Its vibrant community and excellent amenities provide a great environment for families and singles alike, attracting steady demand for rentals. Known for its solid economic growth, Brandon offers a median property price of $405,206. With an average price per square foot of $245 and a monthly short-term rental income of $3,567, the city presents the potential for long-term investment and short-term rental operations. The cash-on-cash return for short-term rentals stands at 5.38% ​¹​.
2. Inverness: This small city in Citrus County is a haven for nature lovers, boasting numerous parks and trails. Its serene setting and affordable real estate market make it an attractive option for short-term rental investors, particularly those interested in vacation rentals. With a median property price of $317,473, Inverness is a more affordable market for investors. It offers a monthly short-term rental income of $2,620, with a cash-on-cash return of 5.25% for short-term rentals​ ²​.
3. Ft. Pierce: Often referred to as the Sunrise City, Fort Pierce is known for its beautiful beaches and historic downtown. Its diverse real estate market and the city’s tourism appeal open opportunities for short-term rental investments. Ft. Pierce has a higher median property price of $808,460 but also provides a significant monthly short-term rental income of $2,623. Short-term rentals offer a cash-on-cash return of 5.19%​ ³​.
4. Palm Bay: Located in Brevard County, Palm Bay is one of the most populated cities in the county. It’s known for its outdoor recreational opportunities, offering a host of parks, natural reserves, and fishing spots. This, coupled with the growing population, positions Palm Bay as a promising market for short-term rentals. This city has a median property price of $336,657 and a monthly short-term rental income of $2,840. The cash-on-cash return for short-term rentals is 5.09% ​⁴​.
5. Winter Haven: Winter Haven is known for its chain of lakes, making it a popular destination for boating, fishing, and watersports. The city is also home to the famous Legoland Florida Resort, adding to its appeal as a short-term rental market. Winter Haven provides a median property price of $333,617 and a monthly short-term rental income of $2,832. Short-term rentals have a cash-on-cash return of 5.01% ​⁵​.
6. Lakeland: As the name suggests, Lakeland is famous for its stunning lakes, with 38 within the city limits. It’s a city with a rich history and a vibrant downtown area filled with shops, restaurants, and parks, making it attractive for short-term rental investments. With a median property price of $373,746, Lakeland offers a monthly short-term rental income of $3,014. Short-term rentals offer a cash-on-cash return of 4.76% ​⁶​.
7. Sweetwater: Located in Miami-Dade County, Sweetwater is known for its multicultural atmosphere and close-knit community. It offers a mix of residential and commercial properties, opening up various investment opportunities. Sweetwater has a higher median property price of $475,800 but also provides a significant monthly short-term rental income of $3,507. Short-term rentals have a cash-on-cash return of 4.66% ​⁷​.
8. Crystal River: Known as the “Home of the Manatee,” Crystal River is a popular tourist destination due to its unique opportunities for manatee viewing. Its status as a tourist hotspot makes it an ideal location for short-term rental investments. Crystal River presents a median property price of $403,874 and a monthly short-term rental income of $2,891. Short-term rentals offer a cash-on-cash return of 4.65%​ ⁸​.
9. West Palm Beach: A jewel of Palm Beach County, West Palm Beach is known for its luxurious lifestyle, cultural diversity, and rich history. Its waterfront location offers stunning views and ample opportunities for water sports, adding to its allure for potential renters. The city is also home to several upscale shopping districts, renowned restaurants, and art galleries. In addition, several colleges and universities in the area create a stable demand for long-term rentals, making it an attractive market for real estate investors. This city has a median property price of $712,559 and a monthly short-term rental income of $2,828. Short-term rentals have a cash-on-cash return of 3.13% ​⁹​.
10. Miami: Miami needs no introduction. It’s a major tourism and international business hub known worldwide for its vibrant nightlife, beautiful beaches, and cultural diversity. The city’s dynamic and diverse real estate market ranges from luxurious waterfront properties to more affordable options in up-and-coming neighborhoods. With its robust economy and high demand for rentals, Miami offers many opportunities for short-term and long-term rental investments. Whether you’re interested in catering to the city’s bustling tourism industry or tapping into the steady demand from its large local population, Miami is a market worth considering. Known for its vibrant real estate market, Miami offers a median property price of $810,450 and a monthly short-term rental income of $3,277. Short-term rentals provide a cash-on-cash return of 2.94%​ ¹⁰​.

STRs can be a lucrative investment if managed effectively and chosen wisely. However, as with any investment, conducting thorough research and understanding the associated risks and rewards is crucial.

© 2023 Ron Murray. All rights reserved.

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