5 Things You NEED to Know Before Investing in Short-Term Rentals in Tampa Bay, Florida

Thinking about investing in the Tampa market with a short-term rental? Here are five crucial things you might not know that could potentially derail your investment if overlooked. Unfortunately, not all realtors in the area are fully knowledgeable about these issues, so it's easy to get bad information. Make sure to read through this entire post, and as always, if you have any questions—whether you're looking to invest or move into the area—feel free to call, text, or email us. 

1. Local Ordinances and Zoning Rules

The Tampa Bay area encompasses a variety of cities and towns, each with its own set of rules regarding short-term rentals. This includes major cities like Tampa, St. Petersburg, and Clearwater, as well as smaller towns like Seminole, Dunedin, and Palm Harbor. You can't just rely on county regulations (Hillsborough, Pinellas, Manatee); you need to understand the specific ordinances and zoning laws of the city where the property is located. Many investors struggle with this because it's not easy to figure out on your own, and most Tampa Bay Realtors might not be fully aware of these specifics.

2. Misleading Airbnb Listings

Browsing Airbnb listings can be incredibly misleading. For instance, you might see numerous short-term rentals in Clearwater and assume the entire area is open for such investments. However, short-term rentals are only allowed in specific parts of Clearwater. Many listings operate under the radar and depend on the lack of neighbor complaints to avoid violations. Investing based on misleading Airbnb data can lead to overvaluing a property that can only be rented long-term, which significantly affects its true market value.

3. Unreliable Cap Rates

Cap rates in listings can often be misleading because they may be based on unrealistic operating expenses. For example, the current owner’s property taxes might be low, but once reassessed at your purchase price, taxes could double. Many listings also don't fully account for management fees, reserve funds, or regular maintenance costs like replacing furniture. It's crucial to work with a Tampa Bay Real Estate Team who can provide a realistic analysis of your potential returns.

4. Informed Real Estate Agents

Not all agents are well-versed in the local short-term rental market. The regulations can vary significantly from one city to another within the Tampa Bay area. It’s common for agents to reach out to us for guidance on these restrictions because they’re tough to keep track of. A general rule of thumb is that if an area has hotels and motels renting on a nightly basis, you might also be able to rent short-term. However, this is not always the case, and working with an experienced Tampa Bay Realtor is essential to navigate these waters correctly.

5. The Sea of Sameness

To succeed with a short-term rental, you need to differentiate your property from the competition. Simply listing a generic three-bedroom, two-bath house might not be enough. Consider your target audience and how you can make your property uniquely appealing to them. Properties that fail to stand out often struggle to achieve their income potential and might end up back on the market sooner than expected.

These are the top five pitfalls to avoid when considering a short-term rental investment in Tampa Bay. If you're looking for a knowledgeable St. Pete Realtor or a dedicated St. Pete Real Estate Team, we're here to help.