Short-term rentals have always been popular in South Florida’s vacation meccas. This popularity has only soared ever since short-term listing sites and apps like Airbnb and VRBO emerged, making these rentals available to national and global guests. And that hasn’t gone unnoticed – especially in Fort Lauderdale. If you’re planning to invest in Fort Lauderdale real estate, then renting out on Airbnb is definitely the optimal rental strategy in 2020. In this article, we break down the reasons to invest in Airbnb Fort Lauderdale rentals, the Fort Lauderdale Airbnb laws and regulations, and the best Fort Lauderdale neighborhoods for investing in Airbnb according to data.
Is Airbnb Legal in Fort Lauderdale?
Before investing in short-term rental properties in any location, real estate investors must check the laws and regulations surrounding these rentals first and foremost. The increasing popularity of Airbnb rentals in the US has led many cities that are considered to be top vacation destinations to set drastic restrictions. For example, Airbnb Los Angeles is only legal for primary residences, and Airbnb Las Vegas is not allowed for a period of fewer than 30 days. But what about Airbnb Fort Lauderdale? Are short term rentals legal and unrestricted?
The great news is that Florida prevents any city from creating new Airbnb rules. Additionally, the state also prevents cities from enforcing any existing local law, ordinance, or regulation that bans or limits the length of vacation rentals. This means that Fort Lauderdale is one of the few markets where renting out on Airbnb is legal for both owner-occupied (primary residences) and non-owner occupied properties (investment properties). However, Florida does allow local governments to regulate Airbnb rentals.
Therefore, even though investors can buy Fort Lauderdale houses for sale for the sole purpose of turning them into Airbnb rentals, they still need to check and comply with Fort Lauderdale Airbnb regulations. The most important laws and regulations to keep in mind are:
- Registration: Fort Lauderdale vacation rentals must be registered with the city on an annual basis. You need to pay a $350 registration fee up to 4 rental units under the same roof. Also, the renewal registration fee is $80 for owner-occupied and $160 for non-owner occupied vacation rentals.
- Business License: Operators of Fort Lauderdale Airbnb rentals need to obtain a business license as the city considered running short-term rental properties as a business strategy. Depending on the time of the year, the cost of a business license in Fort Lauderdale, FL ranges between $78 and $236
- Inspection: There’s a set of rules that your Fort Lauderdale investment property must be consistent with. Airbnb Fort Lauderdale properties, therefore, undergo a home inspection to confirm that they obey these rules. The cost of the first two inspections is included in the registration fee, while each next inspection costs $75.
- Taxes: Similar to other Florida vacation homes, those in Fort Lauderdale have to pay the 6% Florida transient rental tax, 6% Broward County tourist development tax, and 0.5-1.5% Florida discretionary sales surtax.
- Others: It’s important to understand and abide by other rules that bind you. Many condo complexes, for example, ban short-term rentals in their housing units. So before buying Fort Lauderdale condos for sale to rent out on Airbnb, remember to check the HOA’s rules and regulations in this regard.
For more information about Airbnb Fort Lauderdale laws and regulations, click here.
Why Invest in Fort Lauderdale Short-Term Rentals
Now that you are aware of the legal requirements for listing an investment property on Airbnb in Fort Lauderdale, Florida, let’s go over the top 3 reasons why it’s a smart decision to invest in Fort Lauderdale vacation rentals in 2020.
#1 Strong Demand for Vacation Rentals
Located on the southeastern coast of Florida and known for its beaches and boating canals, Fort Lauderdale is named the Venice of America. Therefore, it’s no surprise that the city is a top tourist destination, making it a top location for vacation rentals and Airbnb real estate investing as well. Together with Miami, the city is one of the most visited places in all of the US. Tourists enjoy its warm weather and numerous attractions every year. This tells investors that the demand for Airbnb Fort Lauderdale is strong and isn’t affected by seasonality.
As a result, this assures a high Airbnb occupancy rate which is important to assure a good return on investment in terms of both cash on cash return and cap rate. According to Mashvisor’s Airbnb data, short-term rental properties in Fort Lauderdale have an Airbnb occupancy rate of 53%. Moreover, some neighborhoods show even higher rates. You can find the best neighborhoods in Fort Lauderdale in terms of Airbnb occupancy rate using Mashvisor’s Real Estate Heatmap.
Mashvisor’s Real Estate Heatmap
Related: What Airbnb Occupancy Rate Can You Expect in 2020?
#2 High Airbnb Rental Income Potential
A high Airbnb occupancy rate naturally leads to high rental income from short term rentals in Fort Lauderdale. Mashvisor’s data and Airbnb analytics show that Airbnb hosts here enjoy an average daily rate of $250 and a monthly rental income of $3,172. This is higher than the monthly rental income you’ll get if you buy a Fort Lauderdale investment property and rent it out traditionally – $2,815 according to our data.
Moreover, keep in mind that these numbers are just city averages. Airbnb Fort Lauderdale rental properties can have higher rental income profitability depending, yet again, on the neighborhood. For example, vacation rentals in Chula Vista generate $4,003 in Airbnb rental income compared to the $1,723 that traditional rentals generate in that neighborhood. Likewise, traditional rentals in Harbour Inlet make $1,561 per month, but Airbnb rentals there make $5,330 – five times higher!
#3 You Can Find Affordable Homes for Sale
The Fort Lauderdale real estate market is considerably high. According to Mashvisor’s real estate data, the median property price in Fort Lauderdale, FL is $721,606 ($372 price per square foot). This is nearly triple the national median and exceeds the state median of $464,078. However, the same can’t be said about the best Fort Lauderdale neighborhoods. The city’s top 10 neighborhoods (listed below) all have properties below the city’s median price. Some are even below the national median property price. Meaning, you can still find affordable Fort Lauderdale houses for sale in 2020 if you know where to search.
Related: How to Find the Best Airbnb Properties for Sale
You can find Fort Lauderdale apartments, condos, or other property types for sale with prices that fit your budget using Mashvisor’s Property Finder. Simply select Fort Lauderdale, FL as your market, Airbnb as your rental strategy, the property type you’re looking for, as well as your budget. The tool will then immediately show you a list of the best rental properties that match your criteria AND generate a good ROI. Finding lucrative Airbnb Fort Lauderdale investment properties doesn’t get easier than this!
Mashvisor’s Property Finder
To learn more about Mashvisor’s tools and how we can help you make faster and smarter real estate investment decisions, click here.
Best Fort Lauderdale Neighborhoods for Investing in Airbnb
Now that we know why it’s profitable to invest in Airbnb Fort Lauderdale, FL in 2020, it’s time to know where exactly you should start your search. The Fort Lauderdale housing market is so big that you might not know which neighborhoods are better for Airbnb real estate investing. Luckily, you can find these locations using our Airbnb data and analytics. Mashvisor gets data directly from Airbnb and analyzes it by property type and the number of bedrooms. Looking at the performance of actual Airbnb comps, we’re able to see where short-term rentals are making the highest returns. Accordingly, these are the top 10 neighborhoods for investing in Fort Lauderdale Airbnb:
#1 Melrose Park
- Median Property Price: $265,880
- Price Per Square Foot: $140
- Average Airbnb Daily Rate: $148
- Monthly Airbnb Rental Income: $3,963
- Airbnb Occupancy Rate: 60%
- Airbnb Cash on Cash Return: 8.7%
#2 Lauderdale Manors
- Median Property Price: $245,780
- Price Per Square Foot: $193
- Average Airbnb Daily Rate: $144
- Monthly Airbnb Rental Income: $3,298
- Airbnb Occupancy Rate: 56%
- Airbnb Cash on Cash Return: 7.9%
#3 Home Beautiful Park
- Median Property Price: $260,967
- Price Per Square Foot: $197
- Average Airbnb Daily Rate: $140
- Monthly Airbnb Rental Income: $3,347
- Airbnb Occupancy Rate: 55%
- Airbnb Cash on Cash Return: 7.8%
#4 River Run
- Median Property Price: $310,000
- Price Per Square Foot: $231
- Average Airbnb Daily Rate: $187
- Monthly Airbnb Rental Income: $3,905
- Airbnb Occupancy Rate: 58%
- Airbnb Cash on Cash Return: 7.5%
#5 Rock Island
- Median Property Price: $206,500
- Price Per Square Foot: $195
- Average Airbnb Daily Rate: $151
- Monthly Airbnb Rental Income: $3,005
- Airbnb Occupancy Rate: 57%
- Airbnb Cash on Cash Return: 7.3%
#6 Twin Lakes
- Median Property Price: $319,333
- Price Per Square Foot: $205
- Average Airbnb Daily Rate: $142
- Monthly Airbnb Rental Income: $3,868
- Airbnb Occupancy Rate: 57%
- Airbnb Cash on Cash Return: 6.6%
#7 Chula Vista
- Median Property Price: $339,950
- Price Per Square Foot: $269
- Average Airbnb Daily Rate: $198
- Monthly Airbnb Rental Income: $4,003
- Airbnb Occupancy Rate: 58%
- Airbnb Cash on Cash Return: 6.4%
#8 Harbour Inlet
- Median Property Price: $464,475
- Price Per Square Foot: $406
- Average Airbnb Daily Rate: $707
- Monthly Airbnb Rental Income: $5,330
- Airbnb Occupancy Rate: 50%
- Airbnb Cash on Cash Return: 6.3%
#9 Melrose Manors
- Median Property Price: $297,129
- Price Per Square Foot: $170
- Average Airbnb Daily Rate: $144
- Monthly Airbnb Rental Income: $3,296
- Airbnb Occupancy Rate: 59%
- Airbnb Cash on Cash Return: 5.8%
#10 Durrs
- Median Property Price: $304,100
- Price Per Square Foot: $259
- Average Airbnb Daily Rate: $130
- Monthly Airbnb Rental Income: $2,491
- Airbnb Occupancy Rate: 54%
- Airbnb Cash on Cash Return: 5.1%