Shopping for or selling a vacation rental property is shaping up as one of the most vibrant segments of Sarasota’s real estate sector, with the recent record gains in local tourism looking like just the start of an uptick towards even higher levels. The dynamic tourism growth recently has been attributed to robust consumer confidence, a fast-growing sports performance industry and accelerated tourism marketing campaigns.
In the 2015 first quarter, tourist arrivals in Sarasota rose 13.2% to a record 312,700 visitors who spent for short-term lodging during the three-month period. Sarasota hotel occupancy was also strong from January to March, notwithstanding the 11.2% increase in average daily room rate tourists have to pay.
These robust gains continued into April during which there was an 18.8% year-over-year increase in visitor arrivals and a 23.3% rise in direct tourist spending. This monthly performance was a standout considering that the spike in tourist arrivals in April 2014 was already a record-breaker.
April 2015 hotel occupancy in Sarasota was estimated at 78.2%, which was 3.3% above last year. Average daily hotel room rate for the month rose 12.1% to $207.23. Spurred by the rising demand, an estimated 1,500 new hotel rooms are in the pipeline and are expected to be available in about 24 months.
Rental property investors are also on their toes in tapping opportunities from the upbeat tourist trade. According to HomeAway, an online facility that links prospective renters with vacation-home owners, its Sarasota-Bradenton vacation rental listings were up 46% during the past five years while traveler demand for this market was up 63% for the same period. The average rental rate was estimated at $159.76 per day, definitely competitive compared to hotel rates.
HomeAway executive Jon Gray, in a panel discussion at the recent spring conference in Miami of the National Association of Real Estate Editors (NREE), said the vacation home rental market is “very, very strong.” Gray noted that 90 percent of those buying vacation homes plan to rent their property in the first year. He also estimated that an average second home generates $28,000 annually when rented, thus significantly reducing its annual carrying cost for the vacation property owner. In a research, HomeAway found out that 54% of vacation home rental owners are actually able to cover over three-fourths of their mortgage from renting their property.
The HomeAway executive likewise said that historically, it is still “a pretty good time to buy” a vacation rental home. He reckoned that an average vacation home now costs approximately $150,000 a year, which is lower than during the 2008 housing market crash.
Notably, the NREE conference panelists indicated that vacation home rentals isn’t the sole domain for big institutional investors, estimating that $87,000 is the median income of a vacation-home buyer in 2014. Also, mortgages financed nearly half of vacation home purchases that year, according to the panelists.
Current listings of Sarasota homes for sale have plenty of fresh entries which are priced under the $200s and could present opportunities for prospective vacation home buyers. One of these affordably priced new listings as of June is at the Baywood Colony, a two-bedroom, 1,155-square-foot residence just a few minutes from Siesta Key and with an asking price around the mid-$100s. Another possible choice which surfaced at Imperial House in Bradenton is a 745-square foot, one-bedroom home and also on the market at the same price range.
SARASOTA, FLORIDA, October 7, 2019 – Property values of communities in the Sarasota-Manatee region now face lesser threat from neighborhood eyesores brought about by abandoned, foreclosed homes. Known in the real estate trade as zombie foreclosures, these properties have shrunk significantly in the region. According to an August report of ATTOM Data Solutions, abandoned […] more>>