As a short-term rental owner, you can use VRBO Florida rentals to succeed in your business. But what is VRBO and how does it really work?
Table of Contents
- What Is VRBO?
- Pros and Cons of Listing on VRBO Florida
- VRBO Regulations in Florida You Should Know About
- Can You List on Both VRBO and Airbnb?
- Top 5 Cities for VRBO Florida
- Key Takeaways
Investing in vacation rentals can be tricky for some investors, especially newbies. However, the higher return on investment potential is high enough to make it worth a try. Most people who are traveling either for vacation or business are always looking for accommodation.
Florida is one of the best housing markets for vacation rentals. Many tourists throng various cities in the state all year long. It is a guarantee that you’ll enjoy a good Airbnb occupancy rate and rental income throughout the year.
In today’s blog post, we’ll be taking a closer look at what VRBO is and how short-term rental investors in Florida can use the platform. Since we want you to succeed, we’ll then explore five different cities for this business in Florida.
What Is VRBO?
Many people don’t know that VRBO is actually an acronym for “Vacation Rentals by Owner.” It actually tells you what it’s all about right off the bat.
VRBO is an online real estate platform that allows its users to book short-term rentals from owners and hosts. The platform works similarly to Airbnb. Guests use the platform to find vacation rental properties that are more affordable compared to hotels and resorts.
VRBO users love the platform since it offers them a wide range of properties to choose from. You can find the following property types of VRBO:
- Single-family homes
- Apartments
- Condos
- Cabins
- Townhomes for rent
- VRBO beach house Florida, and many others
As a short-term rental property investor, it’s essential to know that VRBO is stricter on hosts than other vacation rental platforms. For instance, it doesn’t allow shared letting of houses or rooms. You can only let out the entire property.
VRBO remains one of the most popular and leading short-term rental platforms in the world. Launched in 1995, the platform’s grown to become a major global brand. It now lists over two million vacation rental properties all over the world.
VRBO is particularly popular with renters since it offers vacation renters insurance. The policy covers the renter against fraud and offers the vacation property owners liability insurance.
How Does VRBO Work for Owners?
VRBO for owners and hosts operates very much like other listing platforms, such as Airbnb. It helps connect you with renters looking for alternative means of vacation accommodation. You can list any property type, whether apartments, condos, cottages, townhouses, beach houses, and pretty much any house for rent.
As a rental property owner, VRBO offers you an excellent opportunity to generate passive income. You can build equity and wealth by listing your vacation rental on VRBO, especially if it’s located in a tourism hotspot, such as Florida.
VRBO rentals Florida listings aren’t just limited to properties in the US real estate market. In short, listing your property on the platform gives you worldwide-level exposure. It is why many property owners, managers, and hosts find it worthwhile to list their rentals on VRBO.
Pros and Cons of Listing on VRBO Florida
VRBO comes with both positives and potential downsides for rental property owners. Here are the pros and cons of VRBO Florida rentals that every owner should know about:
Pros of VRBO Florida for Owners
Let’s start with the positives of VRBO for owners:
Increased Exposure
VRBO is part of Expedia Group Inc, which also owns HomeAway, another vacation rental houses listing platform. The best thing about the partnership is that owners can get their rentals listed on both platforms. If you post your property on VRBO, it’ll also be automatically listed on HomeAway.
It is an excellent way to advertise your rental since users who may not be aware that both platforms are one will still see your listing. Additionally, since the platform gives your rentals worldwide exposure, you’re assured of having a wider reach.
Affordability
VRBO for owners is affordable. Primarily, there are a few subscription options and packages for you to choose from. The options include:
- You can opt to pay a 3% fee to VRBO every time your rental gets a booking.
- You can choose to pay the $499 annual subscription fee.
User-Friendly
The VRBO website for both PCs and mobile devices is easy to use and user-friendly. Since so many guests are searching for and booking vacation rentals online, this user-friendliness helps you list your property with no major issues.
You can also download the mobile application on your phone. The application makes it easier for guests to reach you on your phone, make payments and even sign the lease agreement directly on the phone.
Guests Reviews
VRBO keeps a review system where guests can leave their reviews after their stay. The option can help you grow your rankings and popularity.
Cons of VRBO Florida for Owners
Here’s a breakdown of some potential downsides of VRBO for owners:
Service Fee
Once Expedia Group Inc acquired VRBO, they implemented new policies. One of the new policies involved service fees, which can be a stumbling block to your listing. A potential guest may be interested in two similar rentals but will eventually book the property without the extra service fees.
Owners who want to make their money back on the service fee may choose to increase their nightly rates. Still, increased rates will result in potential guests looking for more affordable options.
Another downside of VRBO for owners is the credit card fees. If your guest pays for their booking with a credit card, VRBO imposes a percentage fee for the transaction. Most people today will pay for services using credit cards. Now, you’re paying for the subscription, service, and credit card fees altogether.
Limited Rental Options
Remember, VRBO doesn’t allow shared rental properties. You can’t rent out an extra room in your home separately. Such limitation can be a major downside if there’s extra space in your property to accommodate two different guests simultaneously.
Tax Burden
Instead of VRBO collecting rental property taxes from owners and paying them to the state, the platform leaves the tax burden to the investors. It means that you’ll need to calculate and pay the income and lodging taxes yourself. You’re now transitioning from an owner or host to a full-time accountant.
VRBO Regulations in Florida You Should Know About
If you think you’re ready to become a VRBO Florida rental owner or host, you need to be aware of the short-term rental laws and regulations. Such laws influence how you start your business, manage the property, and run the short-term rental.
Let’s break down some Florida VRBO regulations so that you can avoid trouble with the authorities in the future.
- Short-term rental owners in Florida must acquire a business license from the state. To apply for a vacation rental business license, you must provide the property address, property type, resort classification, balcony inspection certificate, and human trafficking notification. All initial applicants must pay a $50 standard fee.
- Once a vacation rental business license is acquired, you must renew it annually. License renewal fees vary from $25 to $400, depending on your business structure.
- Tax laws for short-term rental business owners in Florida state that owners must remit Transient Rental Tax, which is 6% of the rent collected. Total taxes may go up to 10%, depending on the county and city of operation.
While the above is a general list of some vacation rental laws and regulations in Florida, it’s important that you consult with your local authorities before starting your VRBO in Florida business. You may also talk to a real estate attorney with experience in the Florida housing market laws and regulations.
If you’re planning to start your own VRBO Florida business, make sure to check the vacation rental laws and regulations in the state.
Can You List on Both VRBO and Airbnb?
To answer the question, yes. You can list on both VRBO and Airbnb simultaneously. Both platforms will give you a wide exposure since they’re among the leading short-term rental listing sites.
While the advantages of such a strategy include increased exposure, which leads to a higher income, you should be wary of possible issues. The potential problems include:
Double Booking
Double booking is the most common problem that owners who choose to list on both platforms encounter. It happens when your property is booked for the same dates on different platforms. If you find yourself in such a scenario, you must cancel one of the bookings, which isn’t healthy for business. Canceling bookings can also lead to heavy penalties.
The only way to counter the problem is by updating your calendar on both platforms. While it can be exhausting, you can do so with the help of vacation rental property management software. Some software solutions allow you to synchronize your calendars to help avoid double bookings.
Missing Bookings
More exposure means more messages. Unless you check your messages on both platforms, which isn’t easy, it’s easy to miss some bookings. Remember, your guests also expect prompt replies. Else, you can miss a booking and get bad reviews.
The solution is to check your messages on every platform each hour and ensure your reply every time you read one. Again, you don’t need to do everything by yourself. You can hire a property manager for this specific task or use property management software.
An efficient vacation property management software will allow you to access all messages from the different platforms on one dashboard.
Divided Attention
Using two platforms means your attention will be divided among them. It’s easy to neglect one platform when there are lots of messages and inquiries coming in. It can be overwhelming to manually manage both accounts individually.
Just like the two previous potential issues, you can avoid such a problem by hiring a property manager and using vacation rental property management software.
Top 5 Cities for VRBO Florida
We see that Florida is one of the hottest markets for short-term rentals. Below is a list of the top five best cities for VRBO monthly rentals Florida in terms of cash on cash return, arranged from the highest to the lowest rate. The list is generated from our statewide housing market analysis to determine the best cities to invest in.
1. Dundee, FL
- Median Property Price: $335,167
- Average Price per Square Foot: $221
- Days on Market: 33
- Monthly Vacation Rental Income: $4,247
- Vacation Rental Cash on Cash Return: 8.52%
- Vacation Rental Cap Rate: 8.73%
- Vacation Rental Daily Rate: $113
- Vacation Rental Occupancy Rate: 79%
- Walk Score: 37
2. Deland, FL
- Median Property Price: $388,216
- Average Price per Square Foot: $210
- Days on Market: 52
- Monthly Vacation Rental Income: $4,440
- Vacation Rental Cash on Cash Return: 7.61%
- Vacation Rental Cap Rate: 7.79%
- Vacation Rental Daily Rate: $149
- Vacation Rental Occupancy Rate: 70%
- Walk Score: 2
3. Callahan, FL
- Median Property Price: $644,400
- Average Price per Square Foot: $239
- Days on Market: 38
- Monthly Vacation Rental Income: $6,916
- Vacation Rental Cash on Cash Return: 7.40%
- Vacation Rental Cap Rate: 7.50%
- Vacation Rental Daily Rate: $115
- Vacation Rental Occupancy Rate: 68%
- Walk Score: 58
4. Mascotte, FL
- Median Property Price: $418,032
- Average Price per Square Foot: $242
- Days on Market: 47
- Monthly Vacation Rental Income: $4,238
- Vacation Rental Cash on Cash Return: 7.34%
- Vacation Rental Cap Rate: 7.50%
- Vacation Rental Daily Rate: $305
- Vacation Rental Occupancy Rate: 57%
- Walk Score: 27
5. Dade City, FL
- Median Property Price: $528,470
- Average Price per Square Foot: $288
- Days on Market: 51
- Monthly Vacation Rental Income: $4,363
- Vacation Rental Cash on Cash Return: 6.12%
- Vacation Rental Cap Rate: 6.26%
- Vacation Rental Daily Rate: $141
- Vacation Rental Occupancy Rate: 58%
- Walk Score: 66
Key Takeaways
VRBO Florida is an online real estate platform for vacation rental property owners to list their rentals. Short-term rental property owners use the site to gain exposure to a wide range of potential tenants. One VRBO feature that makes it stand out from other vacation rental listing sites is the insurance it offers both property owners and guests to protect them from any unforeseen circumstances.
For any investors looking to invest in short-term rental properties, Mashvisor is your best friend in your journey. We offer up-to-date and accurate real estate market and property data to help you make smart investment decisions. In addition, our tools will help you find the right investment property, which you can then list on VRBO.
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