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Investing in real estate in Florida is an efficient and profitable way to build wealth and earn dollar income. One of the most desired investment formats in cities such as Miami and Orlando is the purchase of a rental property. The short-term rental modality, that is, where the property can be rented for seasons (e.g. Airbnb), has gained prominence in recent years. Similarly, the traditional rental for long periods (more than a year), that is, aimed at tenants who want to take up residence in the property, also remains an interesting option. But after all, what is the best strategy to get income in dollars: Rent for short or long term in Florida?
In this article we will detail the main differences between renting for Short Term Vs. Long term, the advantages of each business model and also the rental rules that owners must obey in the State of Florida.
Short-term rentals: How they work in Florida and in which regions of Florida to invest
Before we explain the advantages and disadvantages of each model, it is important to show an overview of the short-term rental segment, the so-called “Short Term Rental”.
Traditionally, in Florida, the main region focused on this type of rental is the Orlando Metropolitan Region, or Greater Orlando. Cities like Kisssimmee and Davenport are known on the Florida map for their Vaction Homes condominiums, that is, vacation homes that allow the practice of short-term rental.
These condominiums are usually located near Orlando’s theme parks and main attractions.
Some of them are real resorts for their guests, with swimming pools, mini water parks, clubhouses, trails, among other amenities and services. Examples of these condominiums are: Storey Lake, Solara Resort, Champions Gate, Windsor Cay Resort, among others. Click here for more condominiums in Orlando
Investing in a house in these condominiums in Orlando, the so-called Vacation Homes, is an excellent real estate business, since Orlando receives about 75 million people every year in search of accommodation.
The city of Miami didn’t want to be left out..
The city of Miami, in turn, has always been less flexible regarding rental rules. The city prioritizes long-term contracts. The purpose of this rigidity is to protect Miami residents from the intense and often predatory flow of tourists.
However, in the last ten years, Miami has evolved to also take advantage of this huge demand from investors in search of properties aimed at seasonal rentals.
The central region of Miami began to receive condominiums of buildings focused on the Airbnb format. Today, neighborhoods such as Downtown, Brickell, Wynwood and Design District are the most sought after by Florida construction companies for the launch of mega projects aimed at income with short-term rental.
These regions were chosen because they receive the largest number of tourists in the region and, therefore, offer high occupancy rates for properties aimed at this type of business.
In addition to the central neighborhoods of Miami, there are some condominiums scattered around the city that allow, under their statute, the practice of short-term rental. There are few options and only an experienced broker in Miami knows what they are and if they offer an interesting expected return.
See this article: The best condominiums in Brickell focused on Airbnb
Advantages of investing in real estate aimed at short-term rentals
Properties aimed at short-term rentals are usually intended for tourists and business travelers. In Florida this modality is very sought after, since it allows the owner to enjoy the property on vacation (or any other time of the year) and rent it when not in use.
Here are some characteristics of this type of investment:
- Higher profit potential: Short-term rentals tend to generate a higher income per night compared to long-term rentals, especially in popular tourist destinations.
- Flexibility of use: Owners can use the property for personal use during periods when it is not rented.
- Greater control over property: Owners have the ability to adjust rental rates and rental policies according to seasonality and opportunities to maximize profits.
- Maintenance up to date: Because it is a property with high turnover, it requires owners to pay greater attention to maintenance. If on the one hand this can mean more work and costs, on the other hand it is a way to keep the property always updated and valued, which can be more difficult in a long-term rental.
- Rental management can be outsourced: The management of a short-term rental property requires more time and effort from the owner. The good news is that in cities like Miami and Orlando you can hire the services of a specialized Property Manager. They do everything for the owner, from the disclosure of the property to the collection of the values. Understand in this article how the total rental management works.
Income-oriented properties with long-term rent
In this type of property, the allowed rental term is usually at least 1 (one) year in Florida.
They are, therefore, properties aimed at an audience that seeks to establish residence (usually families).
Although properties aimed at short-term rental are the “ball of the time” in Florida, there are also great investment options, with excellent return, in the long-term modality.
Let’s look at the main features:
- Income stability: Long-term rentals usually offer a more stable source of income, since tenants tend to stay for longer periods.
- Less wear: Since tenants usually stay for longer periods, long-term rental properties may be subject to less wear and tear and require less maintenance.
- Less management effort: Managing a long-term rental property usually requires less time and effort from the owner, since there is less tenant turnover and less need for constant communication.
- Property aimed exclusively for investment: In this modality the owner has less flexibility to use the property for personal use, since the property will be occupied by long-term tenants.
- Lower expected profitability: Long-term rentals usually generate a lower income compared to short-term real estate.
About AMG International Realty
AMG International Realty is a global real estate company specialized in Florida and aimed at the foreign public. If you want to know more about investment options in Miami focused on rental income, contact me right now and talk to me on WhatsApp: + 1 305 318 6968 (Heloisa Arazi).
