Connect with us


Why Tampa Bay’s short-term rental market paces nation

Mark Parker



Airbnb advertises this "Historic Kenwood Getaway" for less than $100 nightly. A recent study found that Tampa Bay is the nation's best market for short-term rental investors. Screengrab, Airbnb.

In 17 years, Airbnb has grown from an air mattress on a San Francisco apartment floor to a global network with nearly eight million properties generating over $250 billion in annual revenue.

Multiple competitors have since expanded the short-term rental industry, attracting investors looking to maximize real estate profits. However, potential returns on investment (ROI) vary from city to city.

A recent study concluded that Tampa Bay is the best short-term rental investment market in the U.S. due to persistent demand and the number of “suitable” properties. Nick Pisano, who authored the report’s findings, said firms or homeowners could accrue a “ton of equity” by listing a house on Airbnb and are a “little bit safer in terms of what they can do with it” in the future.

“The main factors are the average revenues units in the area receive, which in the Tampa Bay area is $52,705 annually,” Pisano told the Catalyst. “Then relating that to the overall property value. So, how much revenue you can bring in for what you’re paying for the property – and that was strong here in Tampa.”

Clever Real Estate, a technologically focused home-selling platform headquartered in St. Louis, sponsored the study. It partnered with Rabbu, a Charlotte-based short-term rental investment platform that estimates revenue and ROI potential, to study the nation’s 50 largest metro areas.

The companies used nine scoring metrics to determine the rankings. Those included median home sale prices, Rabbu’s ROI score, occupancy rates, the percentage of listings suitable for Airbnb and the number of available units.

Tampa Bay ranked first, followed by Orlando. It wasn’t particularly close.

The study found that while area property values spiked 71.6% over the past five years, 55% higher than the median city, the $375,562 average was only slightly above the mean. Tampa Bay’s 16,020 listings tripled the median metro.

In addition, Rabbu considers 2.06% of listed homes suitable for Airbnb. That was “a whopping 160% above the median.”

“I think one thing Tampa has going for us is a very strong demand,” he said. “And a lot of reasons to come here, which is not always the case in a lot of markets.”

Pisano recently moved to Tarpon Springs; he also stayed at an area Airbnb while exploring homeownership opportunities in Tampa and St. Petersburg.

Impacts, and St. Petersburg

The study’s inclusion of submarkets within metro areas illustrated local challenges. While “Tampa” led the nation, Ruskin and Port Richey paced the region.

Ruskin had an ROI score of 71 and 42% occupancy rate, followed by Port Richey at 67 and 38%, respectively. While Tampa Bay had a higher occupancy rate (45%), the overall ROI score was a distant 50.

Pisano provided statistics not included in the published report. St. Petersburg’s investment potential ranked 18th out of 25 regional submarkets.

“I think that definitely had something to do with less availability down there,” Pisano explained. “Because they have a high occupancy rate for the area, 49%, which I think is the highest other than Indian Rocks Beach.

“It’s kind of a reflection of the (home) prices being a little bit higher – and the lack of availability.”

Nick Pisano, report author for Clever Real Estate.

Pinellas County boasts nearly 24,000 known short-term rentals and local leaders have found it increasingly difficult to regulate a now sophisticated and nuanced industry. County commissioners and the Tourist Development Council discussed the issue in April.

Commissioner Kathleen Peters said recent hotel stay decreases coincided with a spike in short-term rental listings. St. Petersburg City Councilmember Copley Gerdes noted that hotels “have got very expensive.”

“Do I want our hotels to hurt? Absolutely not,” Gerdes added. “But I also want people to travel here because we need the TDT (tourism development tax) dollars. So, we’ve got to find a balance.”

Like many government officials, the report highlighted mixed feelings among residents regarding the industry. An associated survey with 1,000 qualified respondents found that 76% of Americans have a “positive image of Airbnb.” However, nearly all (96%) also noted downsides. Those included misleading property descriptions, a lack of on-site assistance and safety concerns.

Pisano said nearly 17% of respondents worry that the industry negatively affects local housing markets. That number is likely higher in Tampa Bay, where 60% of people cannot afford a median-priced apartment, much less a single-family home.

Soaring home prices could eventually affect the area’s ROI potential. As a new local homeowner, Pisano believes officials in beach communities and St. Petersburg “might have had the right idea” to increase short-term rental regulations.

He attributed the popularity of places like Ruskin, Port Richey and Pinellas Park to outsiders not realizing “how different certain areas are,” something Pisano encountered when shopping for homes in Hudson and St. Pete. “And it’s obviously a lot easier to price them competitively,” he added.

While short-term rental concerns will likely persist, Pisano noted that 76% of survey respondents believe the industry bolsters the surrounding economy. Like Gerdes, he said the units provide a typically budget-friendly option for families and groups.

Pisano also believes the industry is “a good thing” for the local tax base and current homeowners. “It’s more customers, potentially, for them if they’re selling their home,” he said. “They have a demand from a ton of investors who are looking to move into the market.

“Obviously, the people who live next to Airbnbs might feel a little different …”




Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

By posting a comment, I have read, understand and agree to the Posting Guidelines.

The St. Pete Catalyst

The Catalyst honors its name by aggregating & curating the sparks that propel the St Pete engine.  It is a modern news platform, powered by community sourced content and augmented with directed coverage.  Bring your news, your perspective and your spark to the St Pete Catalyst and take your seat at the table.

Email us: spark@stpetecatalyst.com

Subscribe for Free

Share with friend

Enter the details of the person you want to share this article with.