The gross short-term rental premium is 122% for a 3-bed house in West Palm Beach (Palm Beach County), but after Airbnb fees, insurance, utilities, property tax, and the Florida tourist development tax, the picture compresses substantially. This article covers both a 3-bed house and a 2-bed apartment because the cost structures differ: apartments add HOA fees that houses do not pay, but they start from a far lower entry price of around $274,000 versus about $654,000 for the median house.
West Palm Beach sits in a premium Florida market where appreciation potential and yield trade against each other. Gross short-term rental yields of 10.6% look strong against the long-term rental national median of 4.8%, but the premium-market dynamic means higher absolute costs across every line item: insurance is elevated for hurricane exposure, property tax on a near-$700K median house is meaningful in dollar terms even at a modest 0.9% rate, and the combined 6.0% state sales tax plus county tourist development tax adds another line of cost.
A 3-Bed House Nets about $27,000 on Short-Term Rental After Every Cost
The self-managed short-term rental case for a median 3-bed house in West Palm Beach converts about $69,000 of gross revenue into about $27,000 of net operating income. The equivalent long-term rental generates about $31,000 gross and about $11,000 net. The table below assumes self-management on both sides, which matches the dashboard default.
| Short-term rental | Long-term rental | |
|---|---|---|
| Property price | $654,000 | $654,000 |
| Gross revenue | $69,000 | $31,000 |
| Airbnb fees (15.5%) | $11,000 | — |
| Insurance | $9,300 | $7,800 |
| Maintenance | $9,500 | $9,500 |
| Utilities | $3,000 | $0 |
| Property tax | $5,600 | $5,600 |
| Short-term rental tax | $4,200 | — |
| Total costs | $42,000 | $20,000 |
| Net income | $27,000 | $11,000 |
| Net yield | 4.1% | 1.7% |
The short-term rental tax figure includes the state sales tax plus the county tourist development tax at a combined 6.0%. Airbnb collects and remits much of this in Florida, but the economic cost still sits with the host because it is deducted from payout. Other booking platforms charge the host differently: Vrbo runs around 5%, Booking.com around 15%, and direct bookings avoid platform fees entirely.
Airbnb Fees and Insurance Eat the Largest Share of the House Premium
The biggest drags on the 3-bed house short-term stays case are Airbnb fees at about $11,000 and insurance at about $9,300. Short-term rental insurance runs higher than landlord insurance because it covers guest liability and contents, not just the structure. Maintenance is also higher for short-term stays at about $9,500, since the figure includes furnishing replacement over the typical useful life on top of the wear-and-tear costs a long-term landlord would face. Utilities are a cost the host absorbs for short-term rental guests but passes through to tenants on long-term rental.
Property tax of about $5,600 is identical on both sides because it attaches to the property, not the rental strategy. That is a fixed drag in a high-priced market: even at 0.9%, the absolute dollar cost is meaningful because the sale-price base is large.
A 2-Bed Apartment Starts Cheaper but HOA Fees Shift the Math
A 2-bed apartment in West Palm Beach sells for around $274,000, a fraction of the house median. Lower entry price means lower absolute costs across most line items, but apartments add a material HOA fee of $3,300 per year that houses do not pay. HOA appears in both columns of the apartment table because it is a property-level cost owed regardless of whether the unit is rented short-term or long-term.
| Short-term rental | Long-term rental | |
|---|---|---|
| Property price | $274,000 | $274,000 |
| Gross revenue | $41,000 | $26,000 |
| Airbnb fees (15.5%) | $6,300 | — |
| Insurance | $3,600 | $2,100 |
| Maintenance | $4,700 | $2,700 |
| Utilities | $2,500 | $500 |
| Property tax | $2,300 | $2,300 |
| Short-term rental tax | $2,500 | — |
| HOA fees | $3,300 | $3,300 |
| Total costs | $25,000 | $11,000 |
| Net income | $16,000 | $15,000 |
| Net yield | 5.7% | 5.5% |
Note: Many West Palm Beach condominium associations restrict or ban rentals shorter than 30 days. Before buying an apartment for short-term rental use, verify the specific HOA bylaws and any minimum-stay rules. Florida state law preempts city-level bans enacted after June 2011, but it does not preempt private HOA restrictions.
The Apartment Runs on a Lower Absolute Income but a Comparable Net Yield
On short-term stays, the house delivers 4.1% net yield versus 5.7% for the apartment. On long-term lease, the house yields 1.7% net versus 5.5% for the apartment. The gap between property types is narrower than the gross numbers suggest because the apartment's HOA fee closes some of the cost advantage a smaller property would otherwise enjoy.
In absolute dollar terms, the house produces about $27,000 short-term rental net income versus about $16,000 for the apartment. Investors choosing between the two are really choosing between capital deployment (a far larger cheque for the house with more absolute cash flow) and leverage flexibility (a smaller cheque for the apartment that frees capital for diversification). These are city medians. Individual West Palm Beach ZIP codes differ: the dashboard shows suburb-level data for every bedroom count and property type.
Short-Term Rental Breaks Even at 27% Occupancy
Short-term rental gross revenue matches long-term rental annual rent at 27% occupancy. This is the gross break-even floor, not a target. The Palm Beach County median occupancy sits at 59%, comfortably above the break-even line, which is why the short-term rental premium of 122% over long-term lease persists on the gross side. The break-even figure is useful because it tells you how far occupancy could fall (through regulation, competition, or softer tourism) before the short-term rental strategy stops adding revenue versus simply long-term renting the property.
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Hiring a Manager Cuts About a Fifth Off Short-Term Rental Net Yield
The tables above assume self-management, which matches the dashboard default. Hiring a professional short-term rental manager for a 3-bed house adds around $14,000 in management fees (roughly 20% of gross revenue is the typical local market rate), pulling net yield down from 4.1% to 2.0%. This is a significant step down and should be modelled explicitly if you plan to outsource guest communication, cleaning coordination, and dynamic pricing.
For long-term rental, hiring a property manager at typically 9% of rent adds around $3,000 annually, dropping long-term rental net yield from 1.7% to 1.3%. Long-term rental management is lighter because the workload is concentrated at lease-up and renewal rather than per-guest.
Florida Has No State Income Tax and Depreciation Is a Major Shield
Florida has no state income tax, so rental income is only subject to federal income tax. The biggest federal shield for residential investment property is the 27.5-year depreciation schedule: the depreciable building value of about $523,000 (approximately 80% of the sale price, with the remainder allocated to land) divides into an annual deduction of about $19,000. Short-term rental income is generally reported on Schedule E unless services cross into hotel-like territory (daily cleaning, meals), in which case Schedule C and self-employment tax apply. The dashboard calculates after-tax figures; the tables above are pre-tax net operating income.
Closing costs and transfer taxes apply at acquisition and are not reflected in the annual operating tables. Check with your Florida real-estate attorney for a current estimate based on your purchase price and loan structure. Data reflects market conditions as of October 2026.
For background on how these costs are modelled and sourced, see the market score methodology and the data sources. To run scenarios against live pipeline numbers, explore rental data in the dashboard. For a Broward County comparison on property-type yield differences, see how Sunrise yields compare to premium coastal areas, and for the same cost analysis applied to Broward County, see After All Costs, Broward County's Short-Term Rental Edge Shrinks to 2.4%.
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This information is for educational purposes only and should not be considered financial or legal advice. Regulations and market conditions change frequently. Verify current rules with local authorities before making investment decisions.
Methodology and Assumptions
Defaults used in the figures above. All inputs are adjustable in the dashboard.
How available nights are determined
Available nights default to 330 per year, reflecting an active operator with minimal blocked time. Where local regulations cap whole-home short-term lets (for example New York City 30-day minimum stays and San Francisco un-hosted 90-night caps), the cap is applied. In markets where short-term rental requires owner-occupancy or is otherwise prohibited for investment properties, available nights drop to zero.
How occupancy is measured
The percentage of available nights that get booked, drawn from market data. A property listed for 200 nights with 100 bookings shows 50% occupancy. Adjustable in the dashboard.
Long-term rental management default
Defaults to self-managed (zero management fee), reflecting the most common arrangement for US individual investors. The dashboard slider lets you add a property manager fee if you plan to outsource.
Short-term rental management default
Set to self-managed (zero management fee) by default, the most common arrangement for individual investors. Hiring a professional manager typically costs around 20% of gross revenue and reduces net yield proportionally. Toggle in the dashboard.
How property tax is calculated
Calculated as a percentage of property value, varying by state and county. California properties show lower effective rates due to Proposition 13's 1% cap on assessed value. Property tax sits with the owner; long-term tenants do not pay it.
Local regulations
Check state, county, and HOA rules before investing; these change frequently. The regulations summary in this article reflects the latest data we hold. Always verify the live position with the local authority.
Sampling and data sources
Short-term rental yield figures reflect properties currently listed on short-term rental platforms. In high-tourism markets, listings tend to concentrate in central postcodes, which can pull city-median yields above what residential areas of the same city would achieve. Yields for any specific suburb may differ significantly from the city-wide median.
For metric definitions and broader methodology, see the About page.