In 2024, experts advise owners of an apartment or villa in Florida who want to rent out their property short- or long-term to take a security deposit from tenants. In addition, you will need to purchase a licence to run a vacation rental. What else? Let’s talk about the basic steps on the way to a successful rental business in The Sunshine State.
Content:
- 1. Purchasing a buy-to-let house or apartment in Florida
- 2. Obtaining a licence
- 3. Buying an insurance policy
- 4. Finding an agent and tenants
1. Purchasing a buy-to-let house or apartment in Florida
To rent out real estate in Florida, you must first buy it. If you don’t have a suitable property yet, 2024 is the time to buy one on the Florida coast at a bargain price. The state offers many advantages over other regions of the country: there is no winter, it has magnificent beaches, the world-famous amusement parks in Orlando, the equally famous Miami nightlife, and a steadily growing economy. Besides, housing prices here are much lower than in crowded New York with its icy winters or Los Angeles with its never-ending traffic jams.
So, the first step to success is purchasing a residential property that is attractive to tenants. If your goal is to start renting out a home as quickly as possible, you should focus on ready-made properties instead of seeking to buy an apartment in a development project in Florida.
Location and amenities
Keep in mind that most tourists visit Florida for either amusement parks or beaches. There is no point in buying a property in the middle of nowhere, even a cheap one, unless you plan to live there yourself. See if there is enough space in the selected property to rent it out to potential tourists—say, a family of two adults with two children or a group of three or four friends. Is a beach within walking distance? Is it easy to reach major tourist attractions? Do the windows offer a beautiful view? Does the property have a swimming pool and other amenities that can make the property more attractive to tenants?
Residential community rules
Another equally important question is: what are the rules of the community? Are owners allowed to rent out their property short- and long-term? You should look into this in advance. In a number of development projects in Florida, homeowner associations impose restrictions on renting and subletting real estate. If the landlord does not follow these rules, they will face heavy fines.
Estimating potential income
You can find out the approximate rent in a location you like by checking offers on booking sites. Once you’ve made your choice and registered your ownership of the property, you can proceed to the next steps.
2. Obtaining a licence
Landlords in Florida must get a licence to run a vacation rental. Before the owner can get it, the property will be checked for compliance with various safety laws, so you need to make sure it has smoke detectors and swimming pool safety equipment. The cost of a licence depends on the municipality or county where the property is located, the size of the unit, and the time of application. In the first half of the year, you will have to pay a fee for the entire year, and in the second half, only for six months. The application processing fee is $50, which is added to the cost of the licence.
3. Buying an insurance policy
Guests may break a hook in the bathroom or smash a couple of glasses. This is minor damage and a small problem. But what if they started a fire or a flood? To free themselves from worries, the owner must take out a property insurance policy and include all possible risks. Experts note that such insurance in Florida is relatively cheap, and the most common risks are already covered by a standard home insurance policy.
4. Finding an agent and tenants
Short-term rentals are the most profitable in the state. However, if you do not plan to live next door to the rental property, managing it will be hard. Therefore, the most reliable way is to use the services of a rental management company. Realtors will take care of promoting the listing, ensure that the house or apartment is occupied for the maximum number of days per year, maintain contact with clients, accept security deposits, welcome guests, and check the property after they have left.
It is important to include in the contract with agents a clause on a mandatory security deposit from each guest—this will save you a headache in case of minor breakdowns and damage that the insurance company will not cover.
We hope that this article helps you understand the main course of action for starting your own rental business in Florida. Bear in mind that an apartment or house bought in a good location not only retains its value over the years, but, on the contrary, it goes up in price—so if you ever get tired of renting out your Florida property, you can always sell it for a profit.