Navarre has been named the 15th best place in the U.S. to purchase a vacation rental property, according to Rented.com, a short-term vacation rentals site.
Rented.com put out a survey to answer this question:
“When buying a rental property for investment purposes, what are the best markets?”
To answer that, Rented.com calculated a return on investment formula. It is based on the cost of home ownership in the area including purchase price, property tax rates, insurance and anticipated maintenance costs. That is then weighed against the short-term rental potential including current legal limitations and the actual demand for vacation accommodations in that area.
Navarre fared well in the calculation with a score of 78.8 out of 100 and an estimated annual rental income of $39,000.
Realtor Mike Simpson of Coldwell Banker said he is not at all surprised by Navarre’s high ranking on the list. He sells properties along the beach and mainland of Navarre.
“About 75% of my buyers on the beach, that is what they are doing. They are strictly rental investors or second-home investors. Most are buying to rent it out to cover their costs,” he said.
This market allows for buyers to enjoy the benefits of a beachfront vacation home part of the year, then rent it out for income to cover the mortgage, taxes and bills throughout the rest of the year.
Regulations played a big role in determining rankings on the list in 2019.
“The top 25 is generally comprised of markets that either support vacation rentals outright or at least have a settled regulation that’s easy to comply with,” the Rented.com report said. “Long-term property value is a big part of the decision when purchasing a vacation home. Purchasing in a stable regulatory environment makes you less likely to encounter issues.”
Urban areas that have traditionally been big rental revenue drivers ranked poorly on the list this year as some cities are cranking out new rules to manage short-term rentals. Areas suffering from housing shortages also ranked poorly.
Navarre has a relatively rental-friendly market. Aside from laws requiring collection of bed taxes on short-term stays, the county code is very flexible. Simpson pointed out that all of the condominium complexes on Navarre Beach allow for units to be rented for a short term.
He said the beach is a major factor as well.
“I have been all over the world, but where else have you seen that pretty water and that pretty sand in combination?” he said. “We are small. It is more relaxing, more laid back.”
The mild winters and long tourism summer seasons also boosted Navarre’s ranking.
Destinations that Navarre beat out included:
- All California locations
- Charleston, South Carolina
- Miami Beach
Looking at our direct neighbors to the east and west, Navarre also topped them with Destin scoring the 51 spot and Pensacola ranking 126.
Simpson said that was no surprise.
“Cost wise, it is cheaper to rent here. Crime rate, it is so much better than everywhere else. To buy on Navarre is a lot cheaper, and your cost of living is a lot lower,” he said. “It is a smarter investment.”
As seen in the June 13 issue of Navarre Press.
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