Vacation Rentals in Fort Lauderdale. Hot or Not?

Short-term rentals remain a popular choice in South Florida’s vacation areas. The popularity of vacation rentals continues to thrive, following the emergence of listing sites and apps like Airbnb and VRBO in the last few years. If you’re planning to invest in Fort Lauderdale homes, then renting out on Airbnb, VRBO & a Property Management site like Easy Air Rentals is definitely the optimal rental strategy in 2022. In this blog, we break down the reasons to invest in Fort Lauderdale rentals, the Fort Lauderdale short-term rental laws and regulations, and the best Fort Lauderdale neighborhoods for investing in a vacation rental according to data.

Are Short-Term Rentals Legal in Fort Lauderdale?

​Before investing in short-term rental properties in any location, real estate investors must check the laws and regulations surrounding such rentals first and foremost. The increasing popularity of vacation rentals in the US is driving many cities that are considered top vacation destinations to set stringent restrictions. 

Great news, Florida prevents any city from creating new vacation rentals rules. The state also prevents cities from enforcing any existing local law, ordinance, or regulation that bans or limits the length of vacation rentals. It means that Fort Lauderdale is one of the few markets where renting out on home is legal for both owner-occupied (primary residences) and non-owner-occupied properties (investment properties). However, Florida does allow local governments to regulate vacation rentals.

Therefore, even though investors can buy Fort Lauderdale houses for sale for the sole purpose of turning them into short-term rentals, they still need to check and comply with Fort Lauderdale short-term 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 registration fee for as many as four rental units under the same roof. Also, the renewal registration fee for owner-occupied and for non-owner-occupied vacation rental homes.
• Business Tax License: Operators of Fort Lauderdale Airbnb rentals need to obtain a business tax license as the city considered running short-term rental properties as a business.  Depending on the time of the year, the cost of a business license in Fort Lauderdale, FL ranges between $78 and $236.
• Inspection: Your Fort Lauderdale investment property must abide by a set of rules. Short-term Fort Lauderdale properties, therefore, undergo a home inspection to confirm that they stick to the rules. The cost of the first two inspections is included in the registration fee, while every subsequent inspection costs $75-$90.
• Taxes: Similar to other Florida vacation homes, similar properties in Fort Lauderdale must 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 the other regulations and contracts 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 a rental site, remember to check the HOA’s rules and regulations in this regard.

Why Invest in a Fort Lauderdale Vacation Rental

Now that you are aware of the legal requirements for listing an investment property as a short-term vacation rental in Fort Lauderdale, Florida, here are the top 3 reasons why it’s a wise decision to invest in Fort Lauderdale vacation rentals in 2022.

#1 Strong Demand for Vacation Rentals
The city is 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 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 vacation rentals in Fort Lauderdale is strong and isn’t affected by seasonality.

As a result, this assures a high 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  data, short-term rental properties in Fort Lauderdale occupancy rates in Broward County are high in the Winter. The Occupancy Rate at an annual level is 64%. The lowest occupancy rate was in October 2021 (38%) and the highest was in January 2021 (85%). Drop-in occupancy rates in February of 2021 can be partially explained by a surge in COVID cases.

#2 High Airbnb Rental Income Potential
A high Airbnb occupancy rate naturally leads to high rental income from short term rentals in Fort Lauderdale. Vacation rental hosts enjoy an average daily rate of $290 and a monthly rental income of $4,628.25. 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. 

Here is an example of a North Fort Lauderdale 3 Bedroom, 2 Bathroom home. Sleeps 6 guests.

And below is an example of the Return on Investment (ROI)

#3 Availability of Affordable Homes for Sale
The Fort Lauderdale real estate market is considerably high. In April 2022, the median listing home price in Fort Lauderdale, FL was $575K, trending up 16.2% year-over-year. The median listing home price per square foot was $416. The median home sold price was $455K. However, the same can’t be said about the best Fort Lauderdale neighborhoods

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 vacation rental Fort Lauderdale investment properties doesn’t get easier than this!
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Mashvisor's Property Finder

Conclusion

A Fort Lauderdale vacation rental can provide lucrative returns for real estate investors looking where to best put their money. However, make sure to check the governing laws and regulations for short term rental properties before investing to avoid issues later on.

Should you decide to go the Florida vacation rental route, make sure to conduct extensive research to find the best property for your chosen investment strategy. To help you in your investing strategy, Easy Air Rentals has a Real Estate Professional associated who can help you find the right property in the right area with the best ROI. We also have our Onboarding Specialist & Sales Manager who can  provides an annual income projection on a property including Airbnb fees, management fees, taxes and cleanings. 

Click the here to learn more. or filled out the link below.
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