Tourism and the Rental Market in Florida
When you’re ready to move, deciding whether to rent or sell your home can be a big decision. As one of the hottest markets in the country, making this choice can be incredibly difficult in St. Augustine. The rich history and beautiful beaches drive a thriving, year-round tourism industry. On the other hand, the low taxes are attractive to retirees, not to mention one of the best school systems in Florida drawing in young families.
So, should you hold onto your property as an income-generating asset, or is selling the better route?
Whether you’re considering the potential income from short-term rentals or concerned about the responsibilities that come with being a landlord, particularly in a vacation hotspot like Florida, there’s a lot to consider.
Is Your St. Augustine Home a Good Fit for Renting?
Even if the idea of becoming a landlord appeals to you, your current property might not be the ideal candidate for a rental. If you’re moving far away from St. Augustine, keeping up with ongoing maintenance and addressing the needs of short-term tenants might be challenging. Additionally, the neighborhood could be more suitable for long-term residents rather than vacationers. Are you near the beach or historic downtown? Or are you in an HOA development closer to schools or shopping? Last, but not least, will your home require significant upgrades to meet the expectations of short-term renters?
If any of these concerns resonate, selling might be the more straightforward and financially beneficial option.
Are You Ready for the Realities of Being a Landlord?
Managing a rental property, particularly a short-term rental, isn’t just about collecting rent checks from your mailbox. It’s a time-consuming and often demanding job. St. Augustine visitors have high expectations for their trip – after all, Henry Flagler did set the standard for luxury living on our shores over a century ago. St. Augustine tourists are looking for the best of the best. That’s why they flock to our gourmet restaurants and idyllic beaches. That will continue to where they are staying and you may need to move quickly to avoid negative reviews.
Not specific to St. Augustine, you might face challenges such as guests causing damage that needs to be repaired before the next booking, or dealing with fluctuating occupancy rates during quieter months. Talk to any landlord and they are likely to have just as many headaches as they do profits. But, if you’re willing to put in the work, you can generate a significant amount of income, especially during school breaks and the famous Nights of Lights.
Do You Understand the Costs Involved?
If you’re thinking about renting out your home to generate extra income, don’t forget the extra costs that you will incur.
Mortgage and Property Taxes: You’ll still need to cover these expenses, even if the rental income doesn’t fully offset them.
Insurance: Landlord insurance, which is necessary to cover damages and liabilities, costs about 25% more than regular home insurance.
Maintenance and Repairs: Plan to spend at least 1% of the home’s value annually on upkeep and potentially more if the home is on the older side. (As the Oldest City in America, a lot of the houses in St. Augustine are very much on the older side of things).
Marketing: Advertising costs, along with fees for rental platforms like AirBnB are ongoing expenses.
Vacancies: If the property sits empty, you’ll lose income. Trust us, no short-term rental sees a 100% occupancy rate.
Management Fees: Hiring a property manager to handle bookings, maintenance, and guest communication can ease the burden, but they typically charge about 10% of the rental income.
What’s The Right Decision for You?
Deciding to sell or rent your home in St. Augustine is a deeply personal decision that ultimately only you can answer. The allure of turning your property into a short-term rental in one of Florida’s most beloved cities is tempting, but it’s crucial to weigh the pros and cons carefully. Find out how much your home is worth by clicking here or give us a call at (904) 599-5633 and we can help walk you through all of your available options.