The Sunshine State is one of the most appealing places to own a vacation rental property. Throughout the year, your rental will attract snowbirds and beach bums in search of warmer weather. In fact, the average occupancy rates for Florida vacation homes are nearly 90%. But whether you already own a vacation rental property in Florida or you’ve considered investing in those kinds of assets, there are some things you need to keep in mind.
Florida has many lovely locations, and Jacksonville is no exception. Your Jacksonville real estate agent will inform you of some of the things you need to know. But no matter where you invest, these seven tips will serve you across the state. We’ve compiled a list of important things you need to know as you navigate Florida’s real estate and short-term licensing rules.
Table of Contents
- 1. What can you regard as a vacation rental in Florida?
- 2. What kind of permits do you need to run a Florida vacation rental property?
- 3. What kinds of taxes are vacation rental owners required to pay?
- 4. How do you maintain a Florida vacation rental property?
- 5. How do you avoid penalties as a vacation property owner?
- 6. When do I need to renew my license?
- 7. Is it a good investment to own a vacation rental property in Florida?
According to the law in the state of Florida, a vacation rental can be defined as a unit or group of units that serve as a residential rental property that’s open to the public. However, this excludes timeshares, hotels, resorts, and inns. If the property meets these criteria, it can legally operate as a vacation rental. And you aren’t limited to just one. In fact, you can own multiple vacation rental properties in Florida, and you will be able to make profits from all of them.
The first thing to note is that Florida mandates that any vacation rental must have a recent license from the Florida Department of Business and Professional Regulation (DBPR). These can be obtained by the property owner or the realtors in Florida.
These licenses are often transient and are issued based on the following;
- Vacation Rental (Condominium) – The license will be given to a unit or collection of units in a condo.
- Vacation Rental (Dwelling) – Single-family houses, townhouses, or units in a building that have four or fewer units altogether.
- Single license – This is given to a single-family house or unit that belongs to one person or group that is not a licensed agent.
- Group license – This one goes to a licensed agent to take care of a group of units or buildings.
- Collective license – This is given to a licensed agent standing for a group of units or buildings at different places. It has a limit of 75 units and can only be given to counties in the same district.
Those who stay at short-term vacation rentals in Florida have to pay some taxes alongside their reservation fees. The owner of the property or the listing company will then pay these taxes.
At the moment, a 6% state sales tax is charged by the state of Florida. There are districts in Florida that have their own tax requirements on rental accommodations, including the tourist development tax (TDT). Some of these taxes are remitted to the county, but they are all reported and recorded at the Department of Revenue.
Many counties in the state have their own regulations regarding what is allowed within and outside the short-term rental units. Many counties have created new regulations to curb the increased number of parties contributing to noise in some Florida counties. Some of them make it compulsory for the units to contain noise detection devices within the property or anywhere on the property. If the rules are not followed, the owner (or the renters) may owe fines.
There are also cleaning regulations that are required to be implemented when guests are around. Some of these requirements change from time to time. As an investor or someone considering investing in a rental property in Florida, you need to stay current on the maintenance regulations for a Florida vacation rental property. Adhering to property maintenance regulations will ensure that your rental can continue operating in perpetuity.
As long as you adhere to the rules of the county, it is relatively easy to stay away from heavy fines and penalties. Paying taxes, getting the needed permits, complying with rental maintenance requirements, and generally adhering to the rules of the county will save you from penalties.
The best way to avoid profit-crushing penalties is to properly include the rules and regulations of the property in your property descriptions. When attracting potential renters, it’s important to vet guests before letting them book your property. You need to carry out periodic checks to ensure that your property is in accordance with the rules of the state of Florida and the specific county your property is in.
The general rule is that Florida short-term rental owners must renew their rental permits and licenses yearly. The fee you pay in the initial stage is often the highest and subsequent charges will be lower when you pay annually. Sometimes, an application fee is part of the process. Generally, the cost adds up to about $350 per year, including both state fees and local fees. However, the total fee often changes depending on where the property is located in Florida.
Whether you are buying a property on the Gold Coast or in the Key West area, investing in vacation rental property in Florida is a very good way to get passive income. The real estate business is one of the most popular investment options, given that the short-term rental market is reliably growing.
Florida is one of the most popular tourist spots in the country as a result of its lovely beaches and fun water activities. It is the most rapidly developing location for short-term vacation rentals, and any investor would be wise to invest in this booming economy. Some research indicates that rental occupancy rates in Florida are expected to skyrocket with an increasing interest in such investment. By ensuring that your guests adhere to the rules of the county and are considerate of neighbors, you are protecting your property from loss and penalties. This is the core of smart investment.