Best Florida Location for STR/Vacation Home

[Katy McEntire]

What areas do you recommend for purchasing a STR/Vacation home under $400k in Florida? We like the Tampa area but are open to wherever the numbers look good...we looked into Clearwater/St. Pete but am seeing they do not allow less than 30 day rentals.

[Dan Maciejewski]

There are plenty of very high ROI areas in Pinellas that don't include St Pete or Clearwater. Those are just the 2 biggest cities in the county. As I tell my clients, you can make money and have great occupancy at almost every price point in the county. I don't see anywhere in Pinellas dropping below 70% occupancy, really.

You will be dropping a few things as you get under median-priced homes.  You probably will not have a pool.  You will probably have to go with a 2-bedroom.  And you will probably move farther from the beaches into what I call my tier 2 or tier 3 areas.  BUT, you should still be able to get a home that will rent out well.  I would caution that the rents that have an ADR below 200 may see some occupancy and rate reduction through the coming recession, but they should still make cash flow.  This is a tourist driven area and we've been through recessions before.

Tampa has a 7 day minimum, as does the county. I have not seen them enforce it, and when I and my clients have called, the literal quote was, "try to keep a 7 day minimum." But you can never tell if they want to enforce it. The occupancy and rates and ROI seem pretty solid in Tampa, as well. With the added benefit of lower prices and the appreciation has been a percent or two lower there than in the beaches of Pinellas. You will have to worry about location a bit more, but we are still a great area with a ton of reasons to visit. From several great sports teams, to concerts and live events to an ever-growing job and business hub to attractions to brewpubs and historical locations to our beaches!

In short, I think the short term rental / vacation rental market should hold solid in the Tampa Bay area, especially Pinellas for the short and long term.  You "should" be good almost anywhere you fins a place that fits your budget.  Make sure to vet the neighborhood well -- check reviews of STRs nearby to see what guests say.