COVID freers, who need a place to work or vacation temporarily to escape pandemic restrictions, made South Florida one of their top destinations.
With that comes the need for short-term housing and vacation rentals.
Ken H. Johnson, a real estate economist at Florida Atlantic University, said, “It’s mostly found in the Sun Belt states, especially South Carolina, where there’s a beachfront and parts of Texas. “If you’re going to work from home and you’re in the North or Midwest and you want to work away from home or for a short period of time, you can do it from West Palm Beach or Miami.”
At the same time, investment in short-term rentals in South Florida began as investors sought to capitalize on the booming real estate market, according to South Florida real estate agents.
For homeowners, it’s a good way to get some extra cash, but what impact will the surge in short-term rentals have on communities?
Agents have witnessed this trend firsthand and have reported an increase in people looking to purchase these investment properties.
“A lot of people have come to the AirBnB market,” said Benjamin Gene, president of Keyes Property Management in Pompano Beach. “They looked at the market and figured they could almost triple their income on vacation rentals. They also saw demand compared to hotels because people were scared. [of public spaces.]”
Over the course of the pandemic, their vacation rental portfolio increased by about 200%, according to Gene.
Shannon Nowden, of Fort Lauderdale’s Nowden Group, has seen a similar trend over the past three years, with interest in acquiring such properties only increasing. In 2019, around 10% of his clients were interested in buying short-term rental properties, but in 2020 that number jumped to 25%. By 2021, his 60% of his clients were considering entering the market.
Investors in these properties are a mixed group. Some are international buyers, while others are entering the single-family rental market in general and looking to get into vacation rental space as they see its profitability. It’s a second home and hopes to make money when it’s not in use, the agent said.
“Most of these buyers we see are from out of state. Investors,” said Brian Peal of Boca Raton’s Pearl Antonacci Group.
The market has started to change recently as both interest rates and home prices have risen.
“We are still adding new investors every month. It is a slow season, but people are a little hesitant because profitability is not where it was a year ago or two years ago,” Jean said. Stated, market liquidity may be small, but its lifespan will not be shortened.
Some cities are better suited for short-term vacation rentals than others. Fort Lauderdale is a big draw because of its vibrant downtown and beach access. Delray Beach is similar and close to the beach.
Properties range from condominiums to out-of-town single-family homes to large waterfront mansions.
Some real estate agents specialize in short-term rental housing. The Nauden Group educates short-term rental owners inside and out of business, teaches them how to maintain their properties, and also acts as the property management company for these units.
One of the things Nowden sells to potential buyers is that it has a steady stream of customers. South Florida is a vacation wonderland, and short-term rentals are a good option for families who want to travel and don’t need to rent multiple hotel rooms for their overnight stays. , bring shopping and spending to the local economy.
While the trend may be a boon to some, Broward’s various neighborhood associations say the influx of these properties poses a number of problems, so the increase in short-term vacation rentals in the community is likely to continue. I am not satisfied.
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Ric Buchanan, president of the Coral Ridge Isles Civic Association, said that in the past six months, three AirBnB-listed properties have popped up in one of the Coral Ridge Isles neighborhood quadrants, and that has caused a lot of problems. said he did. Violation of the noise ordinance, prohibition of parking on the street, etc.
“I worry that it will make it harder for the average homeowner to buy something,” Buchanan said. “The erosion of the community will make it difficult for long-term residents to want to stay.”
Hollywood Lakes Civic Association President Terry Cantrell said 30% of the neighborhood’s homes are owned by LLCs.
“It completely disrupts a quiet neighborhood,” Cantrell said. “No one wants to live next to a commercial complex. I did.”
“Guests reported to be throwing disruptive parties or violating rules regarding gatherings of 16 or more people will be suspended or removed from the Airbnb platform,” AirBnB said on its website. says.
Another concern is that while South Florida suffers from a housing shortage, these establishments (potential places for people to live full-time) are now essentially part of the hospitality industry. is to be This could bring new customers to local shops and restaurants, but could exacerbate housing shortages.
“Nobody lives there all year round, so the unit is virtually off the market when you need it,” Johnson said.