Is It a Good Time to Invest in Florida Vacation Homes?

by Julie McGee 05/17/2020


 Photo by monikarosephoto via Pixabay

Considering the bright weather and undeniable beauty of Florida, it may seem like a home run idea to invest in vacation real estate. But there's a little more to this equation than meets the eye. When it comes to available inventory in Florida, the numbers aren't quite what everyone expected. We'll look at how different states rank and what's driving the percentages. 

Percentage of Vacation Homes 

When it comes to the available percentage of vacation homes, Florida sits at 9.7% of all homes serving as vacation homes. For context, this number is just slightly higher than Montana. The states with the highest numbers are those in the Northeast, with scenic Maine coming in at number one with 19.3% of its homes being used as rentals.

So for every five homes you pass in Maine, the odds are good that one of them is a vacation rental. Vermont also made a strong showing at 17.4%, seemingly proving that people prefer to crisp sea air to the humidity in Florida. 

Why This Is 

There are any number of factors that influence the demand for a vacation home. Some people may prefer to stay in hotels while staying in Florida, especially considering the vast number of options in the state. And while Florida may not have come in at number one, nearly one in every 10 homes is still a sizable amount of real estate being used for vacation homes. In addition to demand though, there may just not be enough space in Florida for vacation homes. The call throughout the state is largely for more affordable housing, especially senior housing.

Developers have voiced concerns when fighting over the limited space in the state, and have already begun exploring outside the well-known regions to undeveloped or undeveloped neighborhoods and land. You could argue that this limited amount of housing may actually increase the value of the available vacation inventory simply due to the lack of supply. 

Investing in vacation rentals can still be an exceptionally lucrative choice for investors, but it's important to note the risks going in. Florida is a popular vacation spot, but there's a reason it doesn't come in at number one for inventory. Instead of buying one property, it may make more sense to opt for an investment trust that will spread your money out to different areas across the state. This way, if prices do balloon in one area, you'll see direct returns in your pocket. 

 

About the Author
Author

Julie McGee

Hi, I'm Julie McGee and I'd love to assist you. Whether you're in the research phase at the beginning of your real estate search or you know exactly what you're looking for, you'll benefit from having a real estate professional by your side. I'd be honored to put my real estate experience to work for you.