Are you looking for a new way to add a new stream of passive income? Or maybe you want to diversify your real estate portfolio? Investing in real estate could be your way to do it. And why not since it brings some monthly rents, equity, and tax breaks to your table. Let’s learn more about Airbnb Fernandina Beach FL and why you should consider real estate investing there.
Florida Real Estate Market Overview
When it comes to the Florida real estate market in 2021, it was anything but typical, mostly because of everything that the pandemic impact brought about. Sellers were lucky, as many of them managed to sell their homes for much higher than the initial price. In the U.S., with an estimated 6 million homes sold, home sales reached the highest level in 15 years.
On the other hand, buyers had a different experience because it was difficult to find a home to purchase, not to mention the rising home prices. For example, the median price in home sales topped at $354,000 by November, which is almost a 14% increase compared to November 2020. The prices of newly constructed homes in November 2021 were even higher, with the median price reaching $416,900 (a 19% jump since the previous year).
When it comes to 2020, researchers say that the biggest price jump is behind us. Investing in Airbnb rentals continues to pay off, but it is more important than ever to stay on the lookout and be careful when choosing an Airbnb income property to invest in. Watch new listings, “coming soon” listings, and compare prices.
In this article, we’ll take a better look at the state of the Florida real estate market and whether it’s profitable to invest in Airbnb in Fernandina Beach FL. We will discuss:
- The reasons for purchasing an Airbnb Fernandina Beach FL
- The laws and regulations surrounding Airbnb rentals in Fernandina Beach
- The factors that determine your best Airbnb investment in Fernandina Beach
Why Invest in Airbnb Fernandina Beach FL
From an investor’s viewpoint, the growing popularity of Airbnb makes it worth considering. Listing a property in Airbnb comes with so many benefits. The platform is easy to use, millions of people know about it, and it’s a fairly straightforward way to find guests for your rental property. There’s also a potential to make more money with long-term rentals on Airbnb because you can generally charge a much higher daily, weekend, or weekly rate than you would from someone who signs a long-term lease.
Hotels and hostels are definitely feeling the competition, since making money in real estate via Airbnb created a new kind of promising business future. The three crucial factors that determine the profitability of investing in long-term and vacation property in Florida include:
- Location and reasons to visit
- Historical performance of existing Airbnbs in the area
- Florida housing market
Why People Are Visiting Fernandina Beach, FL
The state of Florida is known as an international tourist destination. It’s called “The Sunshine State” simply because it has year-round sunshine, and is also known for exceptional theme parts. The government is both pro-development and pro-business, there are dozens of global business headquarters, and the economy is dynamic.
Fernandina Beach FL used to be known as Amelia Island until 1562. The place has an interesting history because casinos, brothels, and pirates were once set here, in the island’s harbor town. Today, Fernandina Beach is a family-friendly, slow-paced little beach town.
People mostly visit Fernandina Beach because of its:
- History. Fernandina Beach is the home of many historic gems, like beach towns with interesting attractions, Victorian-era mansions, the Museum of History, and various guided tours.
- Beaches. The town has a pristine coastline, which is probably its biggest draw. About 40 public beach access points and thirteen miles of sandy beaches with lots of places to swim, play, and picnic.
- Outdoor activities. People come to Fernandina Beach on different outdoor excursions, such as catamaran sailing, kayaking, wandering through maritime forests, and walking on wild beaches.
- Festivals. The town has a festival going on almost every month of the year. People come to enjoy themselves during the Isle of 8 Flags Shrimp Festivals, Amelia Island Jazz Festival, Wild Amelia Nature Festival, Rendezvous Film Festival, Dickens on Centre, and more.
How Fernandina Beach FL Performed in 2021
Here is a quick list of Fernandina Beach FL housing and Airbnb stats as of January 2022:
- Airbnb Rental Income: $2980
- Airbnb Cash on Cash Return: 1.73%
- Airbnb Daily Rate: $231
- Airbnb Occupancy Rate: 57%
- Median Property Price: $634,149
- Average Price per Square Foot: $329
- Days on Market: 73
- Walk Score: 65
Florida Real Estate Market: Trends and Projections
Real estate is one of the main drivers of Florida’s economy, meaning that the Airbnb demand is quite high. As the pandemic continues its second year, it’s important for realtors, residents, and policymakers to know what lies ahead in 2022. In 2021, the Florida housing market flourished and we have seen the return of the spring buying season. We missed it in 2020 and it brought with it record numbers of residential sales in Florida.
- The statewide median sales price for single-family existing homes in the first quarter of 2021 was $317,500.
- The number of single-family home sales transactions which were closed during 2021 was 350,516 (a 12% increase compared to the previous year)
- The median time to contract for single-family homes in Florida is 12 days. That is the time it takes to receive a sales contract after being listed.
In Florida, there are several cities that are listed among the best areas to invest in real estate in 2022. The market will still be red-hot in 2022 because the rise in mortgage rates people expected never really happened. This makes Airbnb Fernandina Beach a lucrative business investment that can bring you a positive cash flow.
Most people visiting Florida find it much more affordable to rent an Airbnb home than to purchase their own property. That way, they won’t spend much money but still get a chance to live in the city for a month or two, working remotely, relaxing, and soaking in the culture. As for those interested in making money in real estate, thinking if the Airbnb Fernandina Beach real estate market is the right place to be, the answer is – yes.
For uncovering current and future market trends, we advise using an Airbnb calculator. Investing in real estate requires preparation and understanding of the market. Our tools can help you devise the best long-term or short-term rental strategy.
Is It Legal to Operate an Airbnb Fernandina Beach?
Every year, Florida finds itself in the list of the top five most-visited U.S. states. If you want to operate a legal Airbnb short-term or long-term Airbnb income property, you will have to acquire a license through the Florida Department of Business and Professional Regulation (DBPR).
There are two categories along which vacation rental licenses are distributed: Dwellings and Condos. According to the DBPR’s definition, a condominium is a ground of units in a condominium complex. Dwellings include townhouses, single-family houses, or units in a duplex, triplex, quadruples, or other dwelling units that are comprised of up to four units
So, the two types of licenses that are issued include Condominium License and Dwelling License. Both of these categories are then divided into three types of Airbnb licenses – Single, Group, and Collective (depending on the number of vacation properties that you have).
In order to retain their licenses, all vacation rentals are required to maintain certain standards, such as hygiene standards. Every Airbnb must be kept in good condition with covered mattresses, clean bedding that’s refreshed between uses, clean dishes and glassware, individually wrapped soaps, and to be clean of vermin.
Who Should Apply for a Vacation Rental License?
You are legally required to apply for a license if you are:
- Regularly renting out your entire unit exclusively to the public;
- Advertising your vacation rental property; or
- Renting out your entire unit more than three times in a year for one month at a time or periods of less than 30 days.
If you rent out just a room or a part of your property, you are exempt from applying for a license because the state doesn’t consider these to be public lodging. When the property is a part of your permanent residence, you are eligible for a tax exemption of $50,000, according to Floridian laws.
How to Choose the Best Airbnb Investment in Fernandina Beach
Finding the best investment opportunity in Airbnb Fernandina Beach is possible only when done thoroughly. Take a look at the necessary steps.
Step 1: Determine the Property Type
Properties that have a high occupancy rate and give the most profitable Airbnb rental income are the best types of properties to invest in on Airbnb. But we also cannot forget the importance of location as well as the guests you are targeting.
For example, if your ideal customer is a solo traveler or business traveler, you should look at condos or apartments located in busy city centers. However, if you are targeting big groups of people or families, investing in Airbnb single-family homes or beach houses would be a better route to take.
Step 2: Determine Your Budget and Don’t Go Overboard
Once you’ve decided on the property type, it’s time to set your budget. When determining your budget, you should consider all the potential expenses (not just the property’s listed price). There are expenses like property tax, insurance, inspection, closing fees, and other property management expenses that one should be aware of. Also, the rental should probably have to be optimized for renting, so there are some more expenses to consider.
Be sure to include expenses such as:
- Repairs and maintenance
- Cleaning services and supplies
- Mortgage, property taxes, insurance
- Household supplies
- Utilities
- Marketing
Step 3: Start Your Search for the Top Airbnb Property
The budget is all set up, well done! Now, what we are left with is to find a suitable and available property and analyze it.
You can start actively looking for available rental properties on the Airbnb Fernandina Beach real estate market through friends and family, acquaintances, online listing websites, local papers, or real estate tools. Mashvisor, for example, has a Property Finder feature that allows you to rank available properties to criteria you define. You can observe indicators such as listing price, rental income, occupancy rate, cap rate, COC return, etc.
It is very important to establish property qualities based on age, condition, and size, before buying. If you are buying an investment property to diversify your real estate portfolio and earn some money, remember not to go overboard with the budget. Base your decisions on numbers.
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
Step 4: Market Analysis to Figure Out Property’s Potential
Are there any properties within your budget range that have caught your eye? Bookmark those and get ready to analyze other properties in the vicinity that are similar to those you like. The prices vary so it’s essential to compare them. You want to see if there are any differences between the properties you’re considering and those you’ve selected.
Analyzing the market is crucial to avoid overpaying for a property. Once you pinpoint the top properties, what you’ll want to find out is – would you have a positive cash flow and good return on investment by renting it on Airbnb?
Avoid properties that will make you a barely minimum income. Estimate the return on investment by checking out the cash on cash return and cap rate (remember: a good cap rate is above 8%).
Find the Best Airbnb Fernandina Beach FL Using Mashvisor
Real estate investing and running an Airbnb business isn’t just about finding and buying the property, setting the price, and waiting for guests to call you. It requires great property management skills because the prices need to be set according to neighboring competitions, travel trends, events, and seasonality. Some managers even set a nightly rate as a part of their short term rental strategy.
With the Mashvisor platform, you get access to detailed Airbnb analytics and data such as “For Sale” listings, occupancy rate, traditional rental, and Airbnb rent prices, cash on cash return, etc. You can add properties to compare and minimize your investment risk by forecasting future outcomes. This saves a huge amount of time that you would otherwise spend on manual property search and comparison.
Our Airbnb calculator is easy to navigate thanks to the user-friendly interface, and it doesn’t take much to learn how to handle it. With this kind of advanced real estate investment tool, you can make your search more enjoyable and easier with reliable and fast analytics.
You can use the Airbnb data to both purchases a property and grow your Airbnb Fernandina Beach rental business. Airbnb demand is on the rise as more people get vaccinated and start traveling again, so why not take charge of the situation.
To learn more about how Mashvisor can help you find profitable investment properties, schedule a demo.