How should I rent out my property - holiday or residential?
Owning Florida properties presents a unique opportunity for investors abroad to generate significant income by turning their Florida real estate into a rental property. But what is the best route to take when looking to rent out overseas property? Is it better to list the home as a short-term holiday rental or a long-term residential rental? There are pros and cons with both.
Offering properties abroad for holiday use
It is no secret that Florida is one of the most popular holiday destinations in the US. Foreign travellers also appreciate the wealth of attractions on offer in the state, from family-friendly resorts to quiet beach towns. Florida has a moderate climate all the year round, which means that the tourist season is virtually endless. For property owners, this means a potentially constant stream of rental income when a property is offered as a holiday house. Properties that are conveniently located close to some of Florida’s major tourist attractions or popular beaches are in even greater demand.
When real estate in Florida is offered for holiday use, any depreciation in the value of the home can be deducted each year to offset any rental income that has been received; this benefit is available as long as the buyer maintains ownership of the home. Additional tax deductions can be taken for upgrades to the interior or exterior of the property. This not only benefits owners when tax payment time arrives, but it also keeps the property fresh and attractive for potential holiday renters.
To help minimise potential damage from frequent renter turnover and to maintain a steady flow of income, holiday home owners can choose any one of a number of different rental options, including weekly, monthly or flexible short-term contracts. Because of Florida’s popularity with holiday travellers and retirees, many local property management firms specialise in dealing with overseas investors and can help simplify the process.
Offering Florida properties as residential rentals
Florida is not just a vacationer’s paradise. As a top destination in the US for permanent retirees, it’s also a thriving residential real estate market. Foreign investors who wish to list their properties for residential use can see a huge return on their investment.
Many of Florida’s homes for sale are newer structures in up-and-coming residential developments. This makes them attractive to long-term renters because the facilities are modern, the homes are in good order and there are plenty of neighbours and conveniences nearby. For investors, this generates a motivated pool of quality renters that can help ensure long-term income.
Because single-family residences generally outnumber multi-family homes in Florida real estate, it’s much easier for owners to evaluate factors such as valuation of the home, the level of income it could generate and how quickly similar properties sell or are rented out. There’s also a much greater selection, so buyers can be a bit more choosy when considering which Florida property to purchase.
Whether a property is used as a holiday home or for long-term residential rentals, knowing what to expect is key. An experienced Florida real estate agent can help potential foreign buyers and owners navigate the sometimes complex landscape of maintaining USA properties.