The numbers are in and Americans are buying real estate. Not only is homeownership up, but more and more Americans are looking at real estate as a reliable long term investment. As you’ve probably noticed, new builders are entering the market constantly, flippers are buying and selling homes at a rapid pace, and developers are designing multi-family and mixed-use buildings everywhere you turn. There’s another group of investors out there too – a group that seems to be flying under the radar and quietly buying properties all around the Tampa Bay area. Their game? The short term rental market.
No doubt you’ve heard of Airbnb. They might be the biggest name in the short term rental market, and Tampa investors are cashing in. It isn’t surprising that as Tampa grows, more and more people are vacationing in our city, and they’re not all staying at hotels. In 2017, the number of Airbnb visitors to Florida went up by 75%. End result – $450,000,000 earned in 2017. In case you have trouble with that many zeros, that is four-hundred-fifty-million dollars. $34,900,000 was right in our own backyard in Pinellas and Hillsborough county.
What started out as homeowners offering their homes to out-of-town guests every once in a while has become a full time job for some people. These investors buy properties exclusively for short term rentals, like Airbnb. So is it a good investment? Should you get in on this before HGTV makes a show about it with spinoffs in every city in America (sorry Tarek and Christina.)
Here’s what you need to know about the Tampa Airbnb market.
* There are currently 1,523 active rentals on Airbnb in Tampa. This includes single rooms, guest houses, completely private homes, and even some creative lodging, like small RVs and Winnebagos.
* The average occupancy rate is 63%. That means that for every 100 days that the rental is available, it is booked for 63 of those hundred days.
* The average daily rate for an Airbnb in Tampa is $130/day. Of course, depending on the type of lodging (see above) that number varies. Some individual rooms can be rented for as little as $20/night where some larger private homes can be significantly higher.
* The average Airbnb rating in Tampa is 4.5 out of 5 starts – your visitors will expect a nice place to stay. If you’re planning on buying a distressed property, be prepared to do some work to get it up to snuff.
* There are costs involved. Keep in mind that you will have to pay for utilities and taxes on the property, as well as a mortgage payment if you finance the property. You might also consider hiring a property manager to collect payment and maintain the property. At the very least, you will need to pay a cleaning crew to come in after each visitor to clean your rental.
* It’s not all cupcakes and roses. Your neighbors might not like you very much… In fact, neighbors fed up with party houses and “de-facto hotels” in certain neighborhoods have gone as far as asking local governments to step in. Many cities are considering ordinances to target Airbnbs and other short term rentals. These include having the home registered with the city, issuing rental agreements with all Airbnb occupants, having a 24-hour emergency contact, or posting rules and noise ordinances around the property.
The fact remains that more and more people are turning to short term rentals to make some extra cash. With our beautiful weather, awesome events, spring training, and sports teams, it doesn’t look like the demand for short term rentals is going to slow any time soon.
If you’ve been considering getting into the short term rental game, contact a Realtor who can answer your questions and help you find the best properties to fit your needs. There are many factors to consider before taking the plunge!