Thinking about a Florida getaway that helps pay for itself? If you are eyeing a vacation rental, the Southwest Florida coast offers sunshine, golf, boating, and steady winter demand. But rules, taxes, insurance, and micro‑market differences can make or break your numbers. This guide walks you through what drives returns, what to watch in each county, and a simple checklist to evaluate any property with confidence. Let’s dive in.
What counts as Southwest Florida
Southwest Florida typically includes Collier, Lee, Charlotte, Sarasota, and Manatee counties along the Gulf coast. Cities and islands you will hear most often are Naples, Marco Island, Bonita Springs, Cape Coral, Fort Myers, Sanibel, and Captiva. For clarity, Jacksonville sits on the Atlantic coast in Northeast Florida and is not part of this region. If you want a deeper regional definition, review the overview of Southwest Florida’s geography.
Why guests book here
Peak season runs roughly November through April, when winter visitors and snowbirds drive strong weekly bookings. Shoulder seasons bring steady leisure travel, and summer often sees lower rates yet can still work for well‑located properties. Proximity to beaches, golf, boating, and spring training helps fill calendars. Air access also matters, and Southwest Florida International Airport in Fort Myers continues to serve significant passenger volume, supporting demand from the Midwest and Canada (RSW airport).
Demand signals from county tourism and local media show resilient visitation across the region. Collier and Lee counties have reported healthy visitor activity in recent years, with the broader market seeing strong demand even when average room rates fluctuate (regional tourism trends).
Where returns vary by submarket
Naples and Marco Island skew luxury with higher purchase prices and higher potential ADRs. Cape Coral and Fort Myers often offer a lower entry point and different occupancy dynamics. Barrier islands like Sanibel and Captiva deliver premium rates but bring stricter rules, higher insurance, and storm‑exposure risk. Sarasota presents a split reality, where city rules differ from those in unincorporated county areas.
Focus on micro‑location. Waterfront, beach access, private pools, and proximity to attractions can lift ADR. Condo amenities and minimum‑stay requirements can shape your booking cadence. Always check the exact city limits since rules and taxes can change across a block or bridge.
Rules and taxes to know
State licensing basics
Florida regulates vacation rentals under Chapter 509. If the home meets the definition of a transient public lodging establishment, you may need a state vacation‑rental license through the DBPR. Start with the state’s DBPR vacation‑rental guidance to confirm if your property qualifies.
City and county registrations
Local rules vary by jurisdiction and sometimes by island or neighborhood. Collier County requires short‑term vacation rentals in unincorporated areas to register, display the registration number in ads, and designate a 24/7 responsible party (Collier registration overview). The City of Sarasota requires registration, inspections, and a seven‑day minimum stay for covered properties, with enforcement in effect (Sarasota city rules). Lee County communities and barrier islands often require local registration and a local contact. Always verify city limits vs unincorporated county before you write an offer.
Sales and tourist taxes
Short‑term stays are subject to Florida sales tax, typically 6 percent on gross rental receipts (Florida sales tax). Most counties add a local transient or tourist development tax on rentals under six months. In this region, rates commonly run about 5 percent in places like Lee and Collier. Use the state’s county list to confirm current rates and who administers the tax (local transient tax reference).
Operations, risk, and insurance
Hurricane and flood risk
Southwest Florida faces tropical storms and hurricanes. Hurricane Ian in 2022 led to major surge and wind losses, long rebuild timelines in some coastal areas, and ongoing recovery work. Model catastrophe scenarios, check FEMA flood zones, and understand elevation and rebuilding rules before you buy (Ian recovery context).
Insurance realities
Florida’s property insurance market has seen higher premiums and tighter underwriting in recent years due to catastrophe and reinsurance pressures. Get quotes for dwelling coverage that allows short‑term rental use, strong liability limits, and flood insurance if applicable. Consider business‑interruption where available and budget for higher deductibles (insurance market context).
Safety, inspections, and management
Many cities require safety inspections with registration and re‑inspections. Expect to meet standards for smoke detectors, egress, posting rules, and occupancy limits. If you plan to hire a property manager, full‑service fees commonly range from 20 to 35 percent of rental revenue. In many jurisdictions, you must list a 24/7 local contact who can respond to complaints or code enforcement.
Underwriting your numbers
- Revenue levers: ADR, occupancy, guest capacity, private pool, waterfront, and professional listing photos can all move the top line.
- Operating costs: management, utilities, cleaning, landscaping, pool service, supplies, platform fees, maintenance reserves.
- Compliance costs: licensing, registration, inspections, business tax receipts, sales and tourist taxes, plus higher wind and flood premiums.
- Financing: investor loan rates and insurance can compress cash‑on‑cash returns. Stress test for occupancy swings and catastrophe deductibles.
- Metrics: model NOI, cap rate, cash‑on‑cash, and break‑even occupancy. Run downside and hurricane scenarios.
Your due‑diligence checklist
- Confirm city vs unincorporated county and find the exact local short‑term rental ordinance.
- Verify whether a DBPR vacation‑rental license is required for your property type.
- Check state sales tax and the county tourist tax rate, plus who collects each tax and filing deadlines.
- Read HOA or condo governing docs for minimum stays, approvals, or outright STR prohibitions.
- Get insurance quotes for dwelling, liability, and flood; review deductibles and exclusions.
- Pull neighborhood comps for ADR, occupancy, and minimum‑stay norms; align amenities with demand.
- Estimate hurricane preparedness costs, mitigation upgrades, and potential rebuild timelines.
- Review local enforcement trends and ad‑display rules for license and registration numbers.
Local tip: city vs county lines
A single street can separate a condo in city limits from one in unincorporated county. That boundary can change minimum stays, inspection requirements, taxes, and permit steps. Always verify the address in the right jurisdiction before you underwrite.
Ready to map your strategy and run the numbers on specific homes in Naples, Marco Island, Bonita Springs, Cape Coral, Fort Myers, Sanibel, or Sarasota? Tap our investor‑savvy process and local insights. Start a conversation with the team at Jana Caudill - Florida Site to align the right property with your goals.
FAQs
Do I need a Florida state license for a SWFL rental?
- It depends on your use. Many whole‑home transient rentals require a DBPR vacation‑rental license; confirm based on your property and booking cadence.
How big are Southwest Florida tourist taxes?
- Expect Florida sales tax plus a county tourist development tax for stays under six months. Many counties in this region levy around 5 percent locally in addition to the state rate.
What local registrations should I expect?
- Collier County requires registration in unincorporated areas, while cities like Sarasota have their own registration and inspection programs. Rules vary, so verify the exact jurisdiction.
How should I think about hurricane risk?
- Treat it as a core underwriting input. Budget for higher premiums and deductibles, check flood zones, and plan for potential closures and rebuild timelines.
Beachfront vs inland: which performs better?
- Beachfront can drive higher ADRs but usually costs more to buy and insure and can have stricter rules. Inland options may offer lower entry prices and steadier occupancy at lower nightly rates.
