The Future of Short‑Term Rentals in St. Augustine

St. Augustine’s unique blend of historic charm, coastal lifestyle, and strong tourism demand has made short‑term rentals an attractive investment. However, recent trends indicate important shifts that homeowners and prospective STR operators should know.

1. Market Overview & Performance Metrics

Active Listings & Revenue

As of June 2025, St. Augustine hosts around 973 active Airbnb listings, with an average annual revenue of $34,037 per property, an ADR (Average Daily Rate) of $291, and an occupancy of 42%. By comparison, smaller markets like St. Augustine South—just south of downtown—have 48 listings, earning around $31,081/year, with ADR $211 and occupancy at 50%.

Seasonality Trends

The market sees peak performance in March (ADR and occupancy) and a low in November. Typical revenue tiers in St. Augustine vary widely: top‑performers exceed $8,600/mo, mid-range around $3,000/mo, and entry-level about $1,600/mo.

2. Rising Challenges: Softening Demand & Industry Shakeouts

Owner Exodus

A March 2025 report noted a slowdown: hundreds of owners in “Old City” are listing their Airbnb homes. Insurance, cleaning, and vacancy costs are mounting, squeezing profitability. Some early 2020s buyers—who paid premium prices—now face shrinking bookings, even contemplating selling or switching to long‑term rentals.

Cost Pressures & Competitive Shift

Inflationary pressures, rising maintenance/insurance costs, and guest resistance to premium pricing have pushed some homeowners to pivot toward traditional rentals or exit the market.

3. Regulatory Environment

City & County Rules

The City of St. Augustine requires registration for all STRs—zoning rules vary:

• RS‑1 & RS‑2 zones: rentals must be at least weekly; nightly stays are disallowed.
• HP‑1 zones: monthly rentals only.
• Other zones: nightly stays allowed with registration.

St. Johns County’s STR ordinance promotes safety, parking, and neighborhood compatibility, though state preemption limits caps on rental density. HOAs may impose their own limits.

State-Level Trends

Recent legislation (e.g., SB 1118) is shifting planning and land‑use oversight, but STR‑specific state regulation remains limited. Monitoring pending state actions remains important.

4. Home Value & Rental Competition

Local Housing Market

Median home value in St. Augustine: $449,026, down 3.2% year-over-year. Inventory is up (428 homes for sale in May 2025, +5.9% MoM) while days-to-pending remains at 50.

Traditional Rentals

St. Johns County median gross rent: $1,261/mo; citywide asking rents: $1,567/mo; single-family rentals average $2,333/mo. Traditional rentals may present less volatile income vs. the STR market.

5. Strategic Insights for Homeowners

I. Intensify Financial Scrutiny

Given rising costs and seasonal downturns, build a detailed pro-forma. Stress-test occupancy, ADR, and insurable expense assumptions.

II. Explore Hybrid Models

Consider converting to long-term or extended-stay rental (30+ nights). Over 32% of STRs already emphasize monthly minimum stays. 

III. Optimize Periodic Operation

Advertising during high season (March, holidays) and switching to mid-/long-term during low season can stabilize income.

IV. Zoning Leverage

Align property marketing with zoning constraints (RS‑1, RS‑2, HP‑1). Ensure safety compliance, inspections, and registration to avoid fines.

V. Live Local Compliance

Closely follow city and county STR rule updates—especially on safety, parking, and waste—including possible HOA forms. Consider engaging professional management.

VI. Position for Resale

With STR performance faltering, STR‑zoned homes may shift to mid-term/residential appeal. Stage for flexibility: market both as rental or sale-ready, highlight adaptable floor plans.

6. Where the Market Is Heading

• Normalization of STR Returns - Expect more modest occupancy and ADR benchmarks, shifting from boom-time peaks to steadier, realistic revenue estimates
• Regulatory Tightening - Municipalities may introduce tighter safety mandates; HOAs may clamp down on unit numbers. Keeping ahead of compliance will be critical.

• Increased Demand for Long-Term Rentals - As some homeowners retreat, greater demand from residents and longer-term tenants may present new rental streams.

• Smart Positioning = Strong Advantage - Homes that navigate the evolving landscape—by adapting to mixed-use, compliance, and pricing models—will outperform static STR-only properties.

Final Takeaway

The days of easy profits in the St. Augustine STR space are over—but opportunity remains for homeowners who are strategic, flexible, and attentive to evolving economics and regulation. Those balancing seasonality, zoning compliance, diversified rental strategies, and cost control will position their homes for sustainable income—or a stronger resale path.

Looking for assistance evaluating your property’s potential in this shifting market? I can help analyze your specific income outlook and prepare a tailored plan—reach out anytime.