Studying the short-term rental market in Florida should be a required reading for everyone invested and interested in the industry. Here are some critical issues investors face.
Happy Tuesday, folks! Welcome to a brand new week.
For Skift.com this week, I’ve published reporting and analysis on Florida’s short-term rental market (your feedback is welcome and wanted,). The key takeaway: Demand is up, but so is supply, and costs have surged. That’s pressuring revenue and taking a big bite out of profits.
Still, there’s a lot we didn’t get to in that article. Studying the short-term rental market in Florida should be a required reading for everyone invested and interested in the industry. Here are some critical issues investors face:
- If the cost of living in Florida doesn’t fall sharply in the near future, short-term rentals will face a severe labor shortage of the maintenance and housekeeping staff. Florida already faces a labor deficit, with 53 available workers for every 100 job openings, placing the state in the “more severe” category of labor shortages. And its “toughest in the nation” immigration law that has been in effect since July 1 has created more challenges.
- Interestingly enough, the drive-to markets in the state are doing better than fly-to markets like Fort Lauderdale and Orlando.
- A decade more ago, many people purchased homes in Florida with the aim of retiring there. Some of them are moving into these homes — but a lot of them are selling or have sold those properties in the post pandemic boom. As a result, most condominiums and homeowner associations are renters.
- And those who bought these properties at a premium would be unwilling to rent them long-term because they have to cover mortgages.
- Lastly, and this should come as a relief, real estate activity in Florida might resemble pre-recessionary times of 2008, but this time around there were a lot of cash transactions by deep pocketed investors. So even if defaults come, they may not be as severe as in 2008.
HomeToGo’s Inaugural Share Buyback Program
German vacation rental marketplace HomeToGo has announced an inaugural share buyback program valued at up to €10 million ($10.6 million). The company’s supervisory board has granted approval, and it will be conducted following authorization at the shareholders’ meeting.
The program allows for the repurchase of up to 5.7 million HomeToGo shares between September 18, 2023, and December 31, 2024. In line with shareholder meeting authorization, the management board has set an initial price limit of €3.16 per share for repurchase (excluding ancillary costs). As of June 30, 2023, the company possesses €145 million ($154 million) in gross cash and €139 million ($148 million) in net cash.
Alaskan Capital Wants Short-Term Rentals to Register
The city of Juneau in Alaska has streamlined the registration process for short-term rental properties with a new online form. The move follows the adoption of an ordinance on July 10, requiring short-term rental operators to register their properties with the city’s sales tax office.
This initiative aims to enhance communication with rental operators, ensure equitable sales tax compliance, and assess the impact of short-term rentals on Juneau’s housing availability. The registration requirement is effective on October 8, 2023, with a daily non-compliance penalty of $25, motivating operators to register promptly and avoid fines.
Blueground Breaks New Ground with Students
Blueground, the property management company that operates furnished 30-plus-day rentals, told Skift that it has witnessed a 30% rise in its student community due to limited housing options and a desire for comfortable and flexible living.
Hence, the company has introduced Studentground, offering students access to its 15,000+ premium furnished apartments worldwide. The program includes tailored features like pausing rent during summer breaks and flexible lease terms. Top destinations so far include Paris, Berlin, Boston, New York, and London.
Greece to Levy Accommodation Tax to Aid Climate Disaster Fund
Greece plans to bolster its budget for climate change-related natural disasters by doubling its reserve, raising it from €300 million to €600 million ($320 million to $641 million), Bloomberg reported. Greek prime minister Kyriakos Mitsotakis announced this decision following a series of extreme weather events, including historic forest fires and floods, during the summer. To finance this increase, the government plans to augment the existing hospitality levy by €1 to €6 per night ($1.07 to $6.4) primarily on luxury hotel stays.
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