Thinking about renting out your West Palm Beach condo but not sure if short-term or annual makes more sense? You are not alone. Many owners weigh flexibility and high-season income against stability and simplicity. In this guide, you will learn how each strategy works here, what rules apply, how to run the numbers, and the due diligence steps that protect your returns. Let’s dive in.
West Palm Beach rental landscape
West Palm Beach sees strong tourism and seasonal visitors, plus steady year-round renter demand from professionals and relocating households. Short-term rentals can perform best in high season, often late fall through spring, when average daily rates and occupancy climb. Annual leases trade some upside for predictability and lower turnover.
Your ideal path depends on your goals. If you value personal use and can manage seasonality, an STR can work. If you need steady income and simpler operations, an annual lease is often the better fit.
Rules that shape your choice
Local regulations, state law, and your condo association will guide what is allowed. Confirm each layer before you buy or list.
State laws you should know
Florida’s condo and landlord-tenant laws set important foundations. Review the Condominium Act in Florida Statutes Chapter 718 and landlord-tenant rules in Chapter 83. These statutes govern association powers, leasing rights, notices, and lease practices.
City and county requirements
Municipalities can require business licensing, registrations, and safety checks for STRs. Start with the City of West Palm Beach for current business and code compliance processes. Also review Palm Beach County’s official site for county-level requirements that may apply.
Association rules come first
Your condo declaration, bylaws, and rules control minimum lease terms, rental caps, registration, and penalties. Associations can restrict or prohibit STRs even if the city allows them. Always read recorded documents and any recent amendments before deciding on a strategy.
Taxes and filings for STRs
Short-term stays typically trigger transient occupancy taxes and sales tax in Florida. Owners or managers are usually responsible for registering and remitting. Review the Florida Department of Revenue’s guidance on transient rental taxes and follow current filing instructions. Keep good records for federal income tax reporting as rental income is taxable.
Insurance and safety basics
Many standard condo owner (HO-6) policies limit STR use. You may need an endorsement or a separate short-term rental policy. For statewide insurance resources, visit the Florida Office of Insurance Regulation. Expect safety and compliance items like smoke detectors and clear guest rules set by your condo.
Financial comparison: STR vs annual
Use a simple, side-by-side model to compare net returns rather than focusing on headline nightly rates or monthly rent.
How revenue and costs differ
- Short-term rentals
- Gross revenue comes from average daily rate multiplied by occupancy and days rented.
- Subtract platform fees, management (often higher), cleaning, supplies, utilities, higher insurance, STR taxes, and reserve for wear.
- Seasonality matters, and you carry vacancy risk.
- Annual rentals
- Gross revenue is monthly market rent multiplied by 12.
- Subtract management (often lower), routine maintenance, landlord-paid utilities if any, HOA dues, and vacancies between tenants.
- Cash flow is steadier with fewer moving parts.
Typical management fee ranges
- STR management: roughly 20 to 35 percent of gross bookings.
- Annual property management: roughly 6 to 12 percent of monthly rent.
Key metrics to run
- Net operating income: income minus operating expenses, not including mortgage payments.
- Cap rate: NOI divided by purchase price for yield.
- Cash-on-cash return: annual pre-tax cash flow divided by cash invested.
- Break-even occupancy for STR: occupancy needed to match net income of an annual lease.
Step-by-step analysis
- Pull STR comps for your building or block using a platform like AirDNA to estimate ADR, seasonality, and occupancy.
- Project gross STR revenue, then subtract platform fees, cleaning, STR management, utilities, higher insurance, HOA, and STR taxes.
- Pull long-term rent comps via your agent’s MLS data and local sources to set realistic monthly rent.
- Subtract annual management, maintenance, landlord-paid utilities, HOA, and typical vacancy.
- Compare net figures, volatility, and your operational capacity. Factor in owner use and the risk of future rule changes.
Operations and lifestyle factors
The right strategy is not just math. It is also about how you want to operate.
- Condo rules and enforcement. Confirm minimum lease terms, rental caps, and any approval or registration steps with the association. Expect fines for noncompliance.
- Property management. STRs require guest communication, cleaning coordination, and dynamic pricing. Annual rentals emphasize screening, lease compliance, and periodic inspections.
- Wear and maintenance. STRs often see higher wear on furniture and fixtures. Plan for more frequent replacements and deep cleans.
- Neighbor impact. STR traffic and parking can create friction. Strong rules and responsive management help reduce complaints.
- Flood and insurance context. Verify whether you need flood insurance and what the building’s master policy covers. Use the FEMA Flood Map Service Center to check flood zones and discuss coverage with an insurer.
Due diligence checklist for buyers and sellers
Use this list to protect your investment and speed up approvals.
- Governing documents
- Get the full condo declaration, bylaws, rules, and any rental policy amendments. Note minimum lease terms and any rental caps.
- Board minutes and legal matters
- Request recent board minutes, litigation history, and pending special assessments or enforcement actions.
- Rental history and projections
- For STRs, gather booking history, ADR, monthly occupancy, fees, and prior tax filings. For annual, collect the lease and renewal history.
- HOA financials and reserves
- Review the budget, reserve study, upcoming assessments, and current HOA dues that impact yield.
- Insurance quotes
- Price both STR and annual rental coverage, including flood if needed. Confirm your carrier allows STR activity.
- Registration and taxes
- Market comps and seasonality
- Use AirDNA for STR performance indicators and your agent’s resources for long-term rent comps and vacancy norms.
- Property condition
- Inspect HVAC, appliances, windows, and safety items. Budget for furnishings and supplies if setting up an STR.
- Financing and appraisal
- Understand how lenders view condo projects and STR income. Project eligibility and documented rent history can affect loan terms and appraisals.
- Property profile and taxes
Which strategy fits your goals
Choose the one that matches your cash flow needs, time, and risk tolerance.
- Pick short-term if you want potential high-season upside, flexibility for your own visits, and you are ready for active management. Model conservative occupancy and set aside reserves for turnovers and repairs.
- Pick annual if you value steady income, simpler operations, and more predictable budgeting. This path usually carries fewer regulatory and insurance hurdles within condos that restrict short-term use.
Ready to compare options for a specific building or unit? You can get help verifying association rules, modeling returns, and positioning your condo for the right tenant or guest profile. If you are planning to sell, professional marketing and broad exposure can boost your net. Connect with Amie Calia to review your options and get a clear next step.
FAQs
What are the basic legal steps to start a short-term rental in a West Palm Beach condo?
Which taxes apply to short stays in Palm Beach County condos?
- Short-term rentals typically require transient occupancy and sales tax collection and remittance; see Florida’s rules on transient rental taxes for current requirements.
How do condo association rules affect rentals in West Palm Beach?
- Association documents can set minimum lease terms, rental caps, and approvals, and they can prohibit STRs even if the city allows them; always review the recorded declaration, bylaws, and amendments.
How will a lender view STR income versus annual rent for a condo purchase?
- Many lenders favor stable, documented long-term rents; STR income may require more history and conservative underwriting, and some loan programs look closely at condo project eligibility.
What insurance should I consider for a condo used as a short-term rental in Florida?
How can I check flood risk for a West Palm Beach condo?
