Rental Arbitrage in South Florida (Miami-Dade & Broward)
A practical, regulation-aware guide to launching and scaling short-term rentals with long-term leases.
Last updated: August 2025 — always verify with local authorities.
What is Rental Arbitrage?
Lease a property long-term (e.g., 12 months), then sublet short-term (Airbnb/Vrbo/Booking) with the owner’s written consent. Profit = nightly revenue − (lease + utilities + cleaning + fees).
Key Benefits
- Lower upfront costs vs. buying
- Test markets with flexibility
- High upside in tourist hubs
Key Risks
- Lease violations if subletting is prohibited
- Negative cash flow during slow periods
- Fines for regulatory non-compliance
A–Z Guide
A — Assess Feasibility
- Demand: Use AirDNA/Airbtics; winter peaks in South Florida; target high-tourism areas.
- Landlord: Most leases prohibit subletting; negotiate a clear STR addendum.
- Budget: Typical startup $5k–$15k for furnishings, deposits, and setup.
B — Business Planning
- Form an LLC, set up banking, bookkeeping, and STR-specific insurance.
- Target 20–30% net margin after all expenses.
C–F — Choose, Check, Contract, & Furnish
- Choose Location: Favor STR-friendly zones (see “Where It Works”).
- Due Diligence: Confirm city/county/HOA rules before signing.
- Execute Lease: Written permission to sublet, plus STR addendum.
- Furnish & Setup: Modern, durable furniture; smart lock; noise monitor; cameras (exterior only, disclose).
G–L — Get Licensed, List, Insure, Join, Taxes, Legal
- Licenses: State DBPR (when applicable) + local permits (CU/Compliance/Business Tax).
- Listings: Pro photos + dynamic pricing.
- Insurance: Platform coverage ≠ replacement for STR policy.
- Network: Local STR groups, cleaners, maintenance pros.
- Taxes: Collect/remit FL 6% + local tourist taxes; track expenses.
- Legal: Occupancy limits (e.g., 2/bedroom + 2); comply with safety/notice rules.
M–Z — Marketing → Zoning
- Marketing: Sell the lifestyle—beaches, nightlife, events.
- Noise Mgmt: Use monitors (e.g., required in parts of Broward).
- Ops: Cleaners, automated check-in, SOPs.
- Pricing: Seasonality; events; fees ≤20% of total.
- Quality: Aim 4.8★+ for Superhost.
- Risk: Screen guests; have emergency plans.
- Scale: Validate unit economics before adding doors.
- Track: ADR/Occ/RevPAR; adjust weekly.
- Update: Winter premium pricing.
- Vendors: Reliable, contracted cleaners.
- Withdraw: Target $1k–$5k/mo per high-demand unit (after stabilizing).
- Exit: Pivot to mid/long-term if STR underperforms.
- Zoning: Verify every address before signing.
Regulations Snapshot (Verify Locally Before You Act)
Florida (State)
| STR Status | No statewide ban; locals can regulate. |
|---|---|
| DBPR | State licensing may apply for vacation rentals rented >3×/yr <30 days. |
| Taxes | 6% state + local tourist taxes. |
| Safety | Enhanced safety standards; follow current DBPR rules. |
Miami-Dade (County / Select Cities)
| County | Certificate of Use (CU), Business Tax Receipt, and DBPR license (when applicable). |
|---|---|
| Zoning | Allowed only in certain zones; check County Code Sec. 33-28 and city overlays. |
| Occupancy | 2 guests per bedroom + 2 additional (typical). |
| Miami City | Allowed in specific districts; verify parcel zoning. |
| Miami Beach | Most residential areas prohibit <6 months +1 day rentals. |
Broward (County / Select Cities)
| County | Residential Rental Certificate + state/county licenses. |
|---|---|
| Fort Lauderdale | Certificate of Compliance; noise monitoring required; fees apply. |
| Pompano Beach | Annual permit required. |
| Plantation / Davie | Registration with proof of licenses. |
HOA/condo rules may be stricter than city/county. Written owner permission to sublet is essential for arbitrage.
Where Arbitrage Works (and Where It Doesn’t)
Often STR-Friendly*
- Miami-Dade: Little Havana, Wynwood, Brickell, select South Beach zones (where permitted)
- Broward: Hollywood, Fort Lauderdale (Victoria Park, Coral Shores), Wilton Manors
*Subject to zoning & building/condo rules — verify address-by-address.
Places to Avoid
- Miami Beach residential zones (most ban <6-month stays)
- Strict HOAs/condos that prohibit STRs
- Areas with lower demand or safety concerns
Pricing, Stays & Fees
Typical Stays
| Avg. Length of Stay | 4–7 nights (shorter stays common in tourist areas) |
|---|---|
| Lead Time | ~31 days on average (peaks ~42 days in March) |
| Seasonality | Winter premium; adjust ADR & minimum stays |
Fees & Rates
| Cleaning | $50–$100 (studios/1-bed) • $150–$300 (larger homes) |
|---|---|
| Other Fees | Security deposit $200–$500; pets $50–$100; extra guest $20–$50/night |
| ADR (Prime Areas) | $150–$500+ / night (seasonal) |
| Best Practice | Keep total fees <20% of booking |
Illustrative Economics
Example Monthly Cost Breakdown
Adjust slice values in the data-slices JSON to match your unit. Must sum to ~100.
Illustrative ADR by Area (Seasonal)
Values are examples only. Edit in the data-series JSON.
Tip: Aim for 20–30% net margin. If your model doesn’t clear that bar at realistic occupancy, renegotiate or pass.
Tax Advantages for STR Investors (2025 Overview)
| Provision | What It Means | Why STRs Benefit | Practical Notes |
|---|---|---|---|
| 100% Bonus Depreciation | Immediate expensing of qualified personal property/improvements in Year 1. | Combine with cost seg to create large paper losses early. | Form 4562; consider opt-out strategy depending on income profile. |
| Section 179 | Expense furniture/appliances/amenities up to the annual limit. | Outfit new listings; pull deductions forward. | Limited by taxable income; excess can carry forward. |
| SALT Cap Increase | Higher cap can improve itemized deductions for state/local/property taxes. | Helps in higher-tax jurisdictions. | Applies on Schedule A; see current thresholds. |
| STR “Loophole” | With average stays ≤7 days and material participation, losses may offset active income. | Potential to offset W-2/business income without RE Pro status. | Track hours (100+ per property or 500 total); maintain documentation. |
Tax law is complex and evolving. Consult a CPA to confirm eligibility and filings for your situation.
Run Your Numbers
Stress-test ADR, occupancy, cleaning cadence, and fees. See cash-on-cash and break-even instantly.
Open Rental Arbitrage CalculatorDisclaimer: This page is informational only and not legal, tax, or investment advice. Confirm current rules, zoning, permits, and tax treatment with the relevant city/county/HOA and your attorney/CPA before operating a short-term rental. Figures shown in tables/charts are examples for illustration.