Short‑Term Rental ROI In West Palm Beach

Thinking about turning a West Palm Beach property into a short-term rental? Your return depends on more than a great location. Between seasonality, licensing, taxes, and operating costs, the difference between a winner and a money pit can be a few small decisions. In this guide, you’ll learn how to estimate ROI with local numbers, what rules and taxes to plan for, and which property traits often outperform. Let’s dive in.

Market snapshot and demand

West Palm Beach benefits from steady visitor demand and strong winter peaks. AirDNA’s market overview reports average annual revenue around $37,300, occupancy near 54 percent, an average daily rate about $354.50, and RevPAR near $196.40 across listing types. These are market averages and vary by micro location and property quality. See the AirDNA West Palm Beach market overview for context.

Countywide, tourism set records with about 9.9 million visitors in 2024, which supports bookings during high season and around events. Winter and spring typically bring the strongest occupancy, especially around staples like the Palm Beach International Boat Show and SunFest. Get the latest visitor trends from Discover The Palm Beaches.

What drives ROI

Revenue levers: ADR and occupancy

• Micro location matters. Proximity to downtown Clematis and Flagler, marinas, waterfront, and entertainment can lift rates and occupancy. Top listings often outperform the average.
• Seasonality is real. Expect stronger winter and event-driven demand, then softer late summer and early fall.
• Product quality and guest experience influence reviews, repeat stays, and pricing power.

Operating costs that shrink margins

• Platform fees. Airbnb’s host fee is commonly around 3 percent of the booking subtotal.
• Property management. Full-service management often runs 20 to 30 percent of gross revenue. Hybrid models can be lower but require more owner time.
• Cleaning and turnover. Plan a per-stay cost that scales with booking count. For many 1 to 3 bedroom homes, that can be roughly $75 to $250 per turnover.
• Utilities and internet. Owners typically pay all utilities. Whole-home bills often range from a few thousand dollars per year to much higher with heavy A/C use.
• Insurance. Standard homeowners policies usually do not cover STR use. Budget for a vacation rental or landlord policy, which can be higher in Florida due to wind and flood risk. Learn why coverage differs in this insurance explainer.
• Maintenance and supplies. A 5 to 10 percent reserve on gross revenue helps cover repairs, linens, and replacements.
• HOA and condo fees. These can be material and vary widely by building.

Licensing and taxes you must plan for

• City license and inspection. Within city limits, you must obtain a Business Tax Receipt and meet rental guidelines. Expect zoning sign-off and inspections. Review the City of West Palm Beach rental property guidelines.
• County tourist tax. Palm Beach County imposes a 6 percent Tourist Development Tax on rentals of six months or less. Registration and monthly filing are required. Read the Palm Beach County Tourist Development Tax rules.
• Sales tax. Florida state sales tax is 6 percent, and Palm Beach County typically adds a 1 percent discretionary surtax. Combined with the 6 percent TDT, the total taxes collected from guests are about 13 percent of rent. Confirm details with the Florida Department of Revenue and verify the county rate on Palm Beach County combined sales tax.
• Platform remittance. Some platforms may collect and remit certain taxes, but you are still responsible for registration and county TDT filings. File monthly even if there is no rental activity.
• State law changes. Florida debated statewide STR rules in 2024 that could affect registration and enforcement. Monitor updates on statewide short-term rental legislation.
• HOA and condo restrictions. Many communities set minimum lease lengths or restrict short stays. Always verify governing documents before you buy.

Neighborhood and property factors

• Downtown West Palm Beach and the Clematis and Flagler corridor offer walkability to dining, entertainment, and waterfront. These traits can boost ADR for shorter city stays.
• Intracoastal, El Cid, and North End homes can command premium pricing due to historic character and waterfront access. Higher taxes and insurance often come with the territory.
• Singer Island and nearby marinas appeal to boaters and beachgoers. Larger residences and condos may earn higher nightly rates but require larger setup budgets.
• Westside residential pockets can offer lower entry prices. Performance varies by property condition, parking, and access to amenities.

Model your numbers: two quick examples

The following are illustrative only. Replace figures with property-level comps and quotes.

Example A: conservative small condo

• Gross revenue baseline. AirDNA shows about $37,300 in annual revenue for the market average. See the AirDNA market overview.
• Typical costs. Platform fee 3 percent about $1,119, management 25 percent about $9,325, cleaning assume $100 per stay with high turnover roughly $15,000, utilities $5,000, insurance $2,500, maintenance at 7 percent about $2,611.
• Result. Total operating costs near $35,000 lead to a very thin net before debt of roughly $1,700. After a typical mortgage, cash flow can be negative. Small-gross properties require tight expense control or higher pricing to work.

Example B: higher-performing 2-bed near downtown

• Gross revenue. Assume ADR $300 and 65 percent occupancy. Annual revenue is about $71,175.
• Typical costs. Platform fee 3 percent about $2,135, management 20 percent about $14,235, cleaning $125 per stay with moderate turnover about $15,000, utilities $4,800, insurance $3,000, maintenance 7 percent about $4,983.
• Result. Net operating income is about $27,789. If annual debt service is $24,000, cash flow before taxes is roughly $3,789. On a $320,000 purchase with $80,000 invested, that is about a 4.7 percent cash-on-cash return. Cap rate (NOI divided by price) is about 8.7 percent.

Risks to watch

• Weather and insurance. Hurricanes and flood exposure can increase premiums and cause downtime. Review coverage specifics and exclusions using resources like this short-term rental insurance explainer.
• Compliance and enforcement. The city and county require licensing and timely tax filings. Code enforcement can fine for noise, occupancy, and parking violations.
• Regulatory shifts. Track city and state updates since new rules can affect permitted stays, registration, and fees. See current guidance from the City of West Palm Beach and state coverage on legislative changes.

Your action plan

• Pull property-level ADR and occupancy comps for your exact location and unit type.
• Verify HOA and condo rules, including any minimum lease terms and fees.
• Get quotes for management, cleaning, insurance, and utilities so your pro forma reflects real costs.
• Model base, best, and worst cases. Adjust ADR and occupancy by 5 to 10 percent to find your break-even.
• Confirm licensing steps and taxes before listing. Start with the city’s rental property guidelines and the county’s TDT requirements.

If you want a clear path to a compliant and profitable STR, connect with a trusted advisor who lives and breathes South Florida waterfront and lifestyle markets. For discreet guidance on acquisition, ROI modeling, and a streamlined closing experience, reach out to Patrick Barnicle.

FAQs

What is a realistic short-term rental ROI in West Palm Beach?

• Many properties pencil to mid-single-digit cash-on-cash returns after management, cleaning, and insurance, with outperformance possible for top-located, well-run listings.

How much tax will guests pay on short stays in Palm Beach County?

• The typical combined load is about 13 percent of rent, which includes a 6 percent state sales tax, a 1 percent county surtax, and a 6 percent county tourist development tax.

Do I need a license to operate a short-term rental in the City of West Palm Beach?

• Yes, you generally need a Business Tax Receipt and must follow rental guidelines that include zoning sign-off and inspections.

Does Airbnb collect all my West Palm Beach taxes for me?

• Platforms may collect some state or local taxes, but you remain responsible for registering and filing the county Tourist Development Tax each month.

Which West Palm Beach areas tend to earn higher ADRs?

• Homes and condos near downtown Clematis and Flagler, waterfront areas, and beach and marina access often support higher rates when paired with quality finishes and service.

What are the biggest cost surprises for new hosts?

• Frequent turnovers and full-service management fees, plus Florida insurance premiums and HOA assessments, are the line items that most often compress net income.