STR Short Term Rentals in Cape Coral, Florida & why we love them! - The basic nitty-gritty details you’ll want to know before your get started.
Are you considering an investment into a STR in SW Florida? In this article, we will go over what you need to know about our area and some properties and areas that will make a great rental for your investment goals. Here at Florida Future Realty, our team is educated on the process to help you make the most of your short-term rental.
There are a few rules/guidelines you must follow.
The first is knowing the Florida rules on owning a vacation rental property. Florida does require you to have a business and register with the state of Florida. You can see details right on their website here: https://www.myfloridalicense.com/CheckListDetail.asp?SID=&xactCode=1030&clientCode=2007&XACT_DEFN_ID=7694
Here is a current breakdown of fees associated with this:
Keep in mind that this article was written in May of 2023 and you should check with current fees and confirm with the state at your time of application as guidelines and fees could change.
http://www.myfloridalicense.com/DBPR/hotels-restaurants/licensing/lodging-fees/
The city of Cape Coral also requires your property to be registered with them. There is not currently an inspection but there is a $35 registration fee required. You can learn more below:
There are also rental property guidelines provided as well. If you have any problem finding these items reach out to the team at Florida Future Realty and we are more than happy to help direct you toward the correct resources you need for your investment goals.
Sometimes links change as well so please check the site to make sure you are not missing anything.
The City of Cape Coral allows weekly rentals. Nightly rentals are not allowed. Many other cities in SW Florida require 30-day minimum rentals and most HOA or gated communities have further restrictions on short-term rentals. We can help guide you to the areas that are short-term rental friendly.
You will also be required to charge and remit tourist and sales tax. You can learn more here: https://floridarevenue.com/taxes/taxesfees/pages/sales_tax.aspx
and for Lee County here: https://www.leeclerk.org/i-want-to/ask/frequently-asked-questions/tourist-development-tax
If you hire a property manager they may be able to handle your tax obligations for you.
Speaking of a property manager, how much should you budget for one to handle your vacation rental property? For an almost fully hands-off approach, you should budget 20-25% of your gross rental income to your property manager. Depending upon the type and location of the property you end up acquiring our team of experts at Florida Future Realty can certainly refer you to one of the best property managers to assist you with your rental management. There are other firms that will handle some of your tasks and there are also individuals who offer many different services surrounding vacation rentals as well. It is important that you do your due diligence and understand what you are paying for and what you will still need to handle yourself.
What other costs should you know about? Well, obviously on short-term rentals you will have to either purchase the property turn key (which means includes everything) or furnish it yourself. A decent furniture package can cost anywhere between $30-100,000 depending upon your preferences. There are companies you can finance this through. We can connect you.
You will also need to consider your annual tax bill and annual insurance costs. Insurance on vacation rentals is a little trickier than on an owner-occupied house. We can help connect you with local insurance brokers who can help you find the right policies for your needs. Here in Cape Coral, you will need a general homeowners policy, possibly a general liability policy, and depending upon location perhaps a flood insurance policy. Insurance rates vary from property to property and even individual to individual as well. You could budget anywhere between $5-10,000+/ per year for your property insurance.
Taxes will also vary upon the assessed value of the home and other factors such as assessments. Generally speaking, you can take the purchase price of the home and obtain a fair estimate of what your annual property tax bill may be by using the Lee County Property Appraisers website calculator which can be found here. You do not want to rely on a current property tax bill as it may have been homesteaded or include other exemptions that may not apply to you. Also, the county reassesses values after the sale and each year. https://leepa.org/taxestimator/default.aspx?FolioId=10574530 You have to have a Folio ID so I just used the City Clerks office for this and a sample of $750,000 purchase price.
You’ll also need to factor in property maintenance & repairs, monthly utilities (water, sewer, electric, cable & internet), and monthly services such as lawn maintenance, pest control & pool cleaning.
I know this is probably a lot of information. To help, you can click here to download this page as a pdf to keep for your records. You can also contact us at 239.542.8521 for any questions you may have.
If you’ve read this far you may be thinking, that’s great but where is the good part about how much money I can earn with my STR? We’re glad you asked. Click over to our sister article about Investing in Short-Term Rentals in Cape Coral as well as possible income to learn more about what to invest in and possible returns.