How to Enter the Lucrative Sarasota Vacation Rental Market

Dated: January 29 2021

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Sarasota is setting the pace for reasonable short-term rental laws that balance hosts’ desire to earn money from their properties with the need for long-term rental housing. With vacation rentals now allowed to resume operations, there’s no better time to enter the vacation rental marketplace in Sarasota.


Sarasota offers plenty of location flexibility for vacation rental owners because travelers will have no trouble finding things to do and see. As long as your neighborhood offers easy access to activities and attractions around Sarasota, you can count on bookings in this high-demand area.


This high demand doesn’t mean that first-time real estate investors can buy a property or convert an existing property and expect guaranteed success, though. This is what investors need to know before opening their first vacation rental.

3 Options for Vacation Rental Investors

There are three main ways real estate investors can enter the short-term rental market:

1. Using a primary residence as a vacation rental.


Using a primary residence offers the least risk of all short-term rental opportunities due to low upfront costs, whether you rent out a single room or the entire home. However, converting a primary residence still requires some investment into cosmetic remodeling, home security and smart upgrades, and redecorating to please the potential renters.

2. Building an accessory dwelling unit.

If there’s not enough space in a primary residence, or homeowners don’t want to give up their privacy or personal style, an alternative is to build an accessory dwelling unit. Garage conversions, guest cottages, and tiny homes are popular choices for vacationers. Homeowners can also convert existing square footage into a mother-in-law apartment. 

3. Buying a new property for short-term rentals.

Buying a property for the purpose of turning it into a short-term rental property requires a higher upfront investment, but it also offers the greatest returns. Vacation rental properties that can accommodate large groups are in high demand, leading to significantly higher rental rates. One large property is also cheaper from a property management perspective than multiple smaller properties. A realtor familiar with Sarasota’s vacation rental laws and properties is your best resource for buying an investment property.

Regulations and Tax Rules to Know

Sarasota hosts should educate themselves regarding federal tax laws surrounding short-term rentals. A host’s tax obligation depends on how many days per year they rent the property and their own use of the dwelling unit. However, with income tax payments comes the ability to deduct a wide range of expenses, including licensing, advertising, property management, mortgage payments, property taxes, utilities, and repairs.


When purchasing rental properties, many real-estate investors decide to set themselves up as a limited liability company in order to protect themselves from potential lawsuits. To file as a Florida LLC, you’ll need to either hire an attorney or use an online formation service.


Buying or converting a short-term rental property in Sarasota can be a smart investment — but only if you do it correctly. That means not only finding the right property or making the right changes to an existing property, but also familiarizing yourself with regulations regarding short-term rentals. By crunching the numbers and adhering to local, state, and national rules, first-time real estate investors can build their portfolio the smart way. Better yet, work with a professional who knows the ins and outs of Sarasota and Florida real estate. Contact Kathleen Comerford today. Visit www.Comerford.Group or call 941-586-3229.

Image via Unsplash 

Written by our guest writer:

Suzie  ⎸Happier Home

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Kathleen Comerford

Let The Comerford Group Be Your Key to Your Real Estate Success! I am a Broker and REALTOR, connecting buyers and sellers around the world. The Comerford Group is able to provide customers with excep....

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