Buying a Vacation Rental in Florida: ROI Math, Top Markets, and How to Finance It

Florida is one of the most active short-term rental markets in the country. A 2024 national study ranked Tampa, Orlando, and Jacksonville as the top three STR markets in the U.S. That's not a coincidence — 130 million tourists visited the state in 2023, and both Disney World and the Gulf Coast beaches run near-capacity from October through April. For an investor willing to do the numbers, Florida vacation rentals can produce meaningful cash flow. But the math only works in specific markets, with specific property profiles, and with financing structured correctly.

This guide covers the ROI framework, the two main Florida vacation rental markets (Disney-area vs. Gulf Coast), and DSCR financing — the loan product that makes STR investment accessible even if you're already maxed out on conventional mortgages.

The ROI Framework: Gross vs. Net

Vacation rental returns look great on paper until you account for the full cost stack. A property grossing $65,000 per year can net $20,000 — or $35,000 — depending on how it's managed and financed. You need to understand three numbers before you make any offer.

Gross Revenue

Gross revenue is ADR (average daily rate) multiplied by occupied nights. For a well-managed 4-bedroom home in the Kissimmee/Osceola corridor in mid-2025, an ADR of $250–$300 and 55–65% annual occupancy is realistic. That produces roughly $50,000–$70,000 gross per year. Larger homes (6+ beds) can push past $85,000 in peak performance years, but you're also buying more house.

Operating Expenses (OpEx)

Here's where investors get surprised. Vacation rental OpEx runs 50–65% of gross in most Florida markets, compared to 35–45% for a traditional long-term rental. The big line items:

• Property management fee: 20–30% of gross revenue for a full-service manager
• HOA fee: $500–$1,200/month in resort communities
• Cleaning and supplies: $150–$300 per turnover, with 80–100+ turnovers per year
• Insurance: STR policies run $3,500–$7,000/year in Florida (wind + flood + liability)
• Utilities: pools, A/C, and landscaping for a vacant property between bookings
• Platform fees: Airbnb and VRBO each take 3–5% of booking value

After OpEx, a $65,000 gross property typically nets $25,000–$35,000 before debt service. The deal then lives or dies on your mortgage payment.

Net Operating Income and Cash-on-Cash Return

Cash-on-cash return is net income after debt service divided by your down payment. On a $450,000 purchase with 25% down ($112,500), a DSCR loan at 7.5% on a 30-year term costs roughly $2,380/month. If your property nets $30,000 per year ($2,500/month), you're at approximate breakeven — not a cash-flowing investment. At $40,000 net, you're looking at about $14,400/year remaining, a 12.8% cash-on-cash return, which is strong for real estate. The difference between those outcomes is market selection and management quality.

Disney-Area STR Communities

Within 30 miles of Walt Disney World, Osceola County has designated specific resort communities where short-term rentals are permitted. Outside those communities, Osceola County restricts STRs in standard residential zones. This matters: don't assume any home near Disney is STR-eligible. Verify the zoning before you write an offer.

The five primary Disney-area STR communities I work with buyers in:

1. Reunion Resort — 2,300-acre resort in Reunion, FL. Three Nicklaus-designed golf courses, a water park, multiple pools, and tennis. Luxury positioning; larger homes command $400–$600/night in peak season. HOA runs $500–$800/month. Entry price is $350K+ for a 3-bed condo; single-family homes start around $700K. Higher ADR but tighter cap rates due to purchase price.
2. ChampionsGate — 9-miles from Disney, no resort fee for guests, community water park (Oasis Club). Newer construction, strong 4–6 bedroom inventory in the $420K–$650K range. AirDNA data for the broader Kissimmee corridor shows ADR around $280 and 56% occupancy — ChampionsGate typically performs in that range. Property management is competitive here; multiple firms operate in the community.
3. Solara Resort — newer community (2018–2020 construction) in Champions Gate area. Smaller footprint, resort pool, lazy river. Homes 5–8 beds, $500K–$750K range. HOA around $600–$700/month. Occupancy tends to be strong because the community is photogenic and books well on Airbnb.
4. Encore Resort at Reunion — gated, all-villa community adjacent to Reunion Resort. Resort-managed pool complex and concierge services. Homes are professionally managed through Encore's own program; owners can also use third-party managers. Gross revenues of $70K–$100K+ on 8–10 bedroom villas are documented, but purchase prices of $900K–$1.4M compress the returns significantly.
5. Storey Lake — one of the more affordable STR communities near Disney, with homes in the $380K–$550K range. 5–7 bedroom homes with solid resort amenities. No golf surcharge. Good value play for investors prioritizing cash flow over premium positioning.

For specific community profiles and current availability, I maintain a short-term rental communities catalog on this site — see the profiles for Encore Resort at Reunion and Solara Resort.

Gulf Coast Beach Markets

If Disney-area gives you volume through year-round park demand, Gulf Coast gives you peak-season pricing power. Anna Maria Island, Treasure Island, and Indian Rocks Beach all attract a different buyer profile: beach-focused, March–August heavy, and willing to pay more per night.

Anna Maria Island

Anna Maria Island (Manatee County) is the premium Gulf Coast market in my coverage area. ADR for well-positioned properties runs $600–$1,000/night in season (February–April, June–August), with top performers clearing $1,400/night. Annual occupancy averages around 60–65% for managed properties. The challenge: inventory is severely limited, lot sizes are small, and prices have run up sharply. A 3-bed beach cottage starts at $1.2M–$1.8M. The math works if you're optimizing for appreciation + modest cash flow, not purely for yield.

Treasure Island and Indian Rocks Beach

Treasure Island and Indian Rocks Beach (Pinellas County) are more accessible price points. Treasure Island's AirDNA data shows peak occupancy around 67% and an ADR of $300–$366 in season. A 2–3 bed unit in the $600K–$850K range can gross $55,000–$70,000 in a strong year. Indian Rocks Beach data shows $434 ADR and $63,000 average annual revenue, with 46% occupancy (lower than Treasure Island, but higher ADR compensates).

Both markets took a hit in the fall of 2024 post-Hurricane Helene, with some properties requiring significant repairs. Insurance costs have risen materially in Pinellas County. Run an insurance quote before you commit — $7,000–$12,000/year for a coastal STR is not uncommon in 2025, and that's a real line item in your OpEx model.

“A Florida vacation rental is a business, not a passive investment. The investors who succeed run it like one — tracking ADR weekly, optimizing pricing seasonally, and holding managers accountable to market-rate occupancy.”

DSCR Loans: How STR Investors Finance Without W-2s

Conventional mortgage underwriting uses your W-2 income or tax returns to qualify. For investors who already own 4+ properties, or whose returns show paper losses from depreciation, conventional financing becomes difficult. DSCR (Debt Service Coverage Ratio) loans solve this by qualifying the property on its cash flow rather than the borrower's personal income.

How DSCR Qualification Works

The lender calculates your DSCR: annual gross rent divided by annual debt service (PITI — principal, interest, taxes, insurance, HOA). A ratio of 1.0 means the property cash-flows at breakeven. Most DSCR lenders require 1.0–1.25 DSCR minimum, though some will go to 0.8 with a larger down payment.

For short-term rentals, lenders typically use the AirDNA market rent estimate or an appraiser's STR income analysis rather than a signed lease. This requires the property to be in an STR-permitted zone — another reason community zoning matters before you write the offer.

DSCR Loan Terms in Mid-2025

• Down payment: 20–25% (some lenders allow 15% with mortgage insurance)
• Credit score minimum: 640–680
• Interest rates: 7.0–8.5% on 30-year fixed (higher than conventional, reflecting no-income-docs risk premium)
• Loan amounts: $55K–$2.5M+ depending on lender
• Cash reserves: 6–12 months PITI post-closing required
• No limit on number of properties (unlike conventional's 10-property cap)

DSCR loans are available from non-QM lenders and a handful of investor-focused banks. Not every mortgage broker has access to STR-eligible DSCR programs — specifically, programs that accept AirDNA or appraiser STR income rather than actual signed leases. If you're shopping DSCR lenders, ask directly whether they accept STR income analysis for the DSCR calculation.

What to Verify Before You Offer

Short-term rental regulations in Florida are set at the county and city level, not statewide. The rules change frequently — Orlando, Tampa, St. Pete, and most Pinellas County cities all have distinct licensing, density caps, or bedroom-count restrictions. Before you close on any Florida STR, verify:

1. STR zoning eligibility: Is short-term rental explicitly permitted in this parcel's zone, or only in resort/commercial overlay zones?
2. HOA covenants: Does the HOA CC&Rs permit rentals of less than 30 days? Some communities prohibit it even where county zoning allows it.
3. City/county STR license: Most Florida jurisdictions require registration, inspection, and an annual license fee.
4. Insurance: Get a quote before closing — not after. Coastal Pinellas properties in particular can come in 50–80% higher than inland.
5. Property management: Interview two or three managers before closing. Their market revenue projections (and their track record) matter more than the listing agent's pro forma.

For a detailed breakdown of city-by-city STR rules in the Orlando and Tampa areas, see my guide to short-term rental rules in Orlando and Tampa.

Is a Florida Vacation Rental Right for You?

The investors I see succeed in this market share a few traits: they underwrite conservatively (60% occupancy, not 75%), they budget for repairs and off-season vacancy, and they treat it as a business from day one. The ones who struggle typically bought on an optimistic pro forma from a seller's agent, underestimated insurance and management costs, and didn't verify the STR zoning before closing.

Florida vacation rental investing is legitimate — the demand is real, the tourism base is durable, and the right properties do produce cash flow. But it's a business acquisition, not a passive income strategy. Run the numbers honestly, verify the zoning, and get your DSCR financing pre-qualified before you start writing offers.

If you're evaluating a specific Disney-area community or Gulf Coast market, reach out and I'll walk through the numbers with you.