Short-term rentals in Florida: the rules, the numbers and the questions investors forget to ask

An investor calls. They have found a three-bedroom pool home near the beach, the listing says "great vacation rental potential," and a management company has emailed them a revenue projection with a very attractive annual figure on it. They want to write today.

The question that decides whether this is a good deal or a five-year mistake is not on the listing and not in the projection. It is: what is this specific parcel actually allowed to do, and who says so? In Florida there are three layers of answer, plus a fourth that nobody reads until closing.

Three layers of rules, plus one everyone forgets

Short-term rental legality in Florida is decided by:

1. State law, which licenses vacation rentals, taxes them, and limits how far local governments may go in regulating them.
2. County rules, including zoning in unincorporated areas and the tourist development tax.
3. Municipal ordinances, which vary enormously between neighbouring cities and are the layer that actually differs street to street.
4. The association's declaration — the fourth layer, entirely private, and fully capable of prohibiting what all three levels of government permit.

An investor who checks only the first three can still buy a property they may not legally rent. That happens more often than it should, and it is nearly always because everyone assumed somebody else had read the declaration.

State law and the preemption question

Florida law limits local governments' ability to prohibit vacation rentals outright or to regulate their duration or frequency — but it grandfathers ordinances that predate the preemption. That single carve-out explains most of the confusion in this area.

The practical result is a patchwork. A city that had a restrictive short-term rental ordinance before the preemption date can continue to enforce it. A city that did not cannot now adopt one of the same kind, though it retains authority over things like registration, life-safety inspection, occupancy limits, noise, parking and waste. Attempts to rewrite the framework have been introduced repeatedly in the legislature and have not consistently become law, so the ground can shift.

What this means for you: never generalise from one municipality to another, and never rely on what was true two years ago. "Short-term rentals are fine in Florida" and "the city banned them" are both statements that need checking against the current ordinance for the specific address.

Local ordinances: how to actually check one

A repeatable process, which takes about half an hour:

1. Establish the jurisdiction. Is the parcel inside city limits or in unincorporated county? The property appraiser's parcel record tells you. This is the step people skip, and a property with a city mailing address can sit in unincorporated county.
2. Find the zoning designation for the parcel and read what the code says about transient occupancy and short-term rental in that zone.
3. Look for a dedicated short-term rental ordinance — registration, licensing, minimum stay, occupancy caps, parking requirements, inspections, responsible-party rules, density or separation limits.
4. Call the planning or code enforcement department and ask directly about the address. Note the date, the name and what you were told.
5. Check whether registration is capped or waitlisted. Some jurisdictions limit the number of permits, and being legal in principle is worthless if no permit is available.
6. Ask whether anything is pending. Ordinances under consideration are a real risk to a purchase decision.

Write down what you find and tell the investor to verify it independently before closing. You are pointing at the source, not certifying the answer — and the distinction matters, because you are not their land-use attorney.

The association: the fourth layer

This is where deals actually break, and it is the layer with no public database.

Declarations routinely impose a minimum lease term — thirty days, three months, six months, twelve months — which quietly ends any nightly-rental business model. They can cap the number of leases per unit per year, require a waiting period after purchase before an owner may lease at all, require association approval of every tenant, cap the total number of leased units in the community, or prohibit leasing entirely.

These restrictions bind regardless of what the city allows. And they can change: associations amend declarations, and while amendments often grandfather existing owners, your buyer will be a new owner.

Read the declaration before the offer, not during the document review period. Then have the buyer's attorney read it too. An investor buying into an association without a written confirmation of the leasing rules is gambling on an assumption.

Licensing, registration and tourist development tax

Three separate registrations, and investors routinely learn about the third one from a delinquency notice.

State vacation rental licence. Florida licenses transient public lodging establishments, and a property rented more than a defined number of times per year for short stays generally requires a vacation rental licence from the relevant state agency, with the associated inspection requirements.

Sales tax. Short-term accommodation is subject to state sales tax plus any local discretionary surtax, requiring registration with the Department of Revenue.

Tourist development tax. A county-level tax on short-term accommodation, often called a bed tax. Rates and administration vary by county, and some counties collect it themselves rather than through the state.

Plus, frequently, a local business tax receipt and short-term rental registration.

Platforms collect and remit some of these in some jurisdictions and not others, which is where investors get caught: they assume the platform is handling everything, and it is handling one tax in one jurisdiction. Direct bookings are almost always the owner's own responsibility.

Insuring a short-term rental in Florida

A standard homeowners policy does not cover commercial short-term rental use, and an owner who does not disclose the use may find a claim denied at the worst possible moment.

What is needed is a policy written for the use — a landlord or dwelling-fire policy with short-term rental endorsement, or a purpose-built short-term rental product — carrying commercial general liability, loss of rental income coverage, and adequate limits on contents, which are exposed in a furnished rental in a way an owner-occupied home's are not. Platform-provided protection is not a substitute for a policy; the coverage is narrower than owners assume.

Layer Florida's own conditions on top: wind and hurricane exposure with a percentage deductible, flood coverage where applicable, and the fact that a property with a pool and a rotating cast of guests is a materially different liability risk. All of this belongs in the underwriting before the offer, not after.

The numbers: underwriting a Florida STR honestly

Gross revenue is a marketing number. What matters is what is left.

A realistic expense stack:

• Management — commonly a substantial share of gross for full service.
• Cleaning and turnover, partly recovered through guest fees.
• Platform fees.
• Insurance at short-term rental rates, which are well above owner-occupied.
• Property tax at the non-homestead rate, reset to the purchase price. Never underwrite on the seller's tax figure.
• Association fees, plus the possibility of a special assessment.
• Utilities, internet and pool service, all owner-paid and all higher with constant occupancy.
• Maintenance and furniture replacement. Short-term use consumes a house faster than a long-term tenant does.
• Licensing, taxes and compliance costs.
• Vacancy and seasonality. Florida demand is sharply seasonal, and an annual average conceals months that lose money.

Two disciplines worth insisting on. First, run the property as a long-term rental as well, and see whether the deal still works — because that is your fallback if the ordinance or the declaration changes. Second, treat any projection supplied by a party earning a commission on the transaction as a starting point for verification, not as evidence. Comparable local revenue data, checked for the specific submarket and property type, is the real input.

Risk: what changes when the rules change

The regulatory risk in this asset class is real and it is asymmetric. Rules tighten more often than they loosen, because the political pressure comes from neighbours.

Where the risk lives:

• Municipal ordinances can add registration caps, minimum stays, occupancy limits or separation requirements. Grandfathering is common but not guaranteed, and may not survive a sale.
• Association amendments can impose minimum lease terms. This is the fastest-moving risk, because it takes a vote of owners rather than a legislative process.
• State law can shift the preemption framework in either direction.
• Insurance availability can change independently of everything above.
• Supply. The most under-modelled risk of all. Vacation rental supply has grown substantially in most Florida markets while demand has normalised, and a projection built on occupancy from three years ago describes a market with fewer competitors.

Advise accordingly: a deal that only works at nightly rates, in a jurisdiction that could restrict them, with an association that could amend its declaration, is a deal with three independent single points of failure.

The agent's process before an investor writes an offer

A checklist you can run every time:

1. Confirm the jurisdiction from the parcel record — city or unincorporated county.
2. Read the zoning and any dedicated short-term rental ordinance for that parcel.
3. Call the jurisdiction about the specific address; record the date, the name and the answer.
4. Check permit caps, waitlists and anything pending before the council.
5. Obtain and read the association declaration and rules on leasing. Get the association's written confirmation of minimum lease term, annual limits and any waiting period.
6. Confirm what licences and registrations the property will need, and whether any transfer with ownership.
7. Get a real insurance quote for short-term rental use.
8. Get the reset, non-homestead property tax estimate from the county estimator.
9. Build the net underwriting with a realistic expense stack and a seasonal occupancy assumption.
10. Run the long-term rental fallback.
11. Put every finding in writing to the client, with the recommendation that their attorney and CPA verify before they remove contingencies.

That is eleven checks per property, each producing a fact you will need weeks later on a different property. Investors compare four or five deals at once, which means you are holding forty facts, none of them written on the listing. Heykeyper is built to carry exactly that: each investor's criteria, each property's zoning answer, association restriction, licence status and quoted insurance, kept together — so nothing gets assumed on Tuesday and discovered after closing.

Frequently asked questions

This guide is general information for real estate professionals, not legal, tax or insurance advice. Florida statutes and local ordinances change — verify current requirements for the specific property, association and county, and refer clients to their attorney, CPA or licensed insurance agent for advice on their situation.