7 Step Guide to Cape Coral Rental Regulations
1. City Overview: Short-Term Rental Landscape
Homes in Cape Coral have depreciated by -5.89%, with the median home value at $376,707, according to Zillow. The average property tax is 0.95%, which remains manageable for short-term rental (STR) investors seeking favorable regulations and strong earning potential.
Cape Coral currently hosts 3,558 active short-term rentals. The average daily rate for these rentals is $263, translating to an annual revenue of $40,677 as of March 2025. The average gross yield for STRs is 10.85%, highlighting promising investment returns. The unemployment rate is a low 3.8%, well below the national average of 4.1%.
The most popular property types are 2-bedroom units, with an average daily rate of $263 and an impressive annual revenue of $69,861. Guests favor amenities like Elevators, Babysitter recommendations, and Beachfront locations, showcasing the demand for convenience and coastal experiences.
Cape Coral attracts visitors from nearby cities such as Miami (4.51% of guests), Cape Coral itself (1.49%), and Orlando (1.46%). Leading short-term rental hosts include Roelens, Vesteva Vacation Rentals, and Vacasa Florida, boasting average ratings of 4.70, 4.82, and 4.60, respectively.
With an average booking lead time of 69.5 days and investor-friendly STR regulations, Cape Coral remains a compelling market for short-term rental opportunities.
2. Quick Facts
- Chalet Cape Coral Investor Potential & Regulation Score: Friendly.
- Permit Required? Yes, a one-time registration fee of $35 applies for an individual dwelling unit.
- Zoning Restrictions? Yes, STRs must adhere to zoning regulations specific to residential areas.
- Maximum Occupancy: No more than two people per room, depending on room size and compliance with the International Property Maintenance Code.
- Tax Requirements: Airbnb collects a 5% Lee County Tourist Development Tax and applicable state taxes, including a 6% Transient Rental Tax and a 0.5% Discretionary Sales Surtax. Hosts must ensure compliance with additional tax obligations.
- Renewal Frequency: One-time registration with updates required within 30 days of ownership or contact changes.
- Insurance Required? Liability insurance with minimum limits of $1 million per occurrence and $2 million aggregate is strongly recommended.
- Enforcement Level: Strict, enforced by the Department of Community Development and Code Compliance Division.
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3. Getting Started with STRs in Cape Coral
Step 1: Understanding Zoning Laws
STRs in Cape Coral are generally permitted in residential zones but may be subject to specific restrictions depending on zoning classification and HOA rules. For detailed zoning inquiries:
- Contact Information:
Phone: (239) 574-0553
Address: Department of Community Development, 1015 Cultural Park Blvd, Cape Coral, FL 33990 - Related Resources: Cape Coral Zoning Information
- Zoning Map: Cape Coral Zoning Map
- FAQs: Cape Coral Zoning FAQ
Step 2: Organize Required Documents
- Completed Residential Rental Property Registration Application
- Proof of Ownership
- Owner and local contact information
No primary residence or neighbor notification requirements exist for STRs in Cape Coral.
Step 3: Apply for an STR Permit
Applications can be submitted with a $35 fee to the Department of Community Development. For more information:
- Contact: (239) 574-0553
- Address: 1015 Cultural Park Blvd, Cape Coral, FL 33990
- Rental Registration Information
Step 4: Health and Safety Compliance
STRs in Cape Coral must comply with the International Property Maintenance Code, including:
- Proper egress from bedrooms
- Functioning smoke detectors
- Adequate ventilation and lighting
- Safe electrical and heating systems
Step 5: Pay Taxes and Fees
Refer to the Taxes and Financial Obligations section for a detailed breakdown of the Taxes.
- Residential Rental Property Registration: All residential rental properties with four or fewer units must be registered with the City of Cape Coral. This involves submitting a completed Residential Rental Property Registration Form and paying a one-time registration fee of $35 per property.
- Business Tax Receipt (BTR): Operating a business in Cape Coral requires obtaining a Business Tax Receipt, formerly known as an Occupational License. The BTR ensures compliance with local regulations. Fees vary depending on the type of business but typically range from $22 to $110.
- State Vacation Rental License: Issued by the Florida Department of Business and Professional Regulation (DBPR), this license is mandatory for operating a vacation rental. The fees include: Application Fee: $50, Hospitality Education Program (HEP) Fee: $10, License Fee: Varies based on county, application date, number of rental units, and time left in the renewal cycle. For instance, a single-unit license may have a full-year fee of approximately $170.
- Certificate of Use (CU): This certificate ensures your business location complies with zoning regulations. The specific fee for the CU isn’t explicitly listed. For accurate and current information, it’s recommended to contact the Department of Community Development’s Planning Division at (239) 574-0553.
4. Regulatory Breakdown
Frequently Asked Questions provide detailed answers to the most common regulatory questions.
Example Questions:
- Do I need a permit to operate a short-term rental in Cape Coral?
Yes, operating a short-term rental in Cape Coral requires registration. The city mandates that all residential rental properties with four or fewer units be registered with the Code Compliance Division. - What are the occupancy limits for STR properties in Cape Coral?
Occupancy limits in Cape Coral are determined by the size of the sleeping areas. Each bedroom should accommodate no more than two people, depending on the room’s size and compliance with the International Property Maintenance Code.
Local Ordinance:
5. Key Considerations for Investors
What is the investment potential regulation score in Cape Coral?Cape Coral is considered investor-friendly with clear regulations that support STR operations while maintaining community standards.
Are there any recent changes in STR regulations that could impact the market?
As of the latest updates, there have been no significant changes to STR regulations in Cape Coral. As of July 2024, Cape Coral has intensified its enforcement of existing short-term rental (STR) regulations. The city is actively addressing properties that fail to comply with established rules, aiming to ensure neighborhood safety and uphold community standards. This heightened enforcement underscores the importance for STR operators to adhere strictly to all local ordinances to avoid potential penalties.
6. Taxes and Financial Obligations
- Occupancy Tax Rate: Short-term rental operators in Cape Coral must collect and remit a combined tax rate of 11%, which includes a 6% Florida state sales tax, a 5% Lee County Tourist Development Tax (TDT), and a 0.5% Florida Discretionary Sales Surtax.
- Who Collects the Tax: Airbnb and some other platforms may automatically collect and remit certain taxes, including state and local sales taxes and the Lee County TDT, on behalf of hosts. However, operators are responsible for ensuring compliance with all tax obligations, including registering with the Florida Department of Revenue for state taxes and the Lee County Tax Collector for local taxes, such as the TDT.
- Insurance Requirements: While not explicitly mandated, it is strongly recommended that operators maintain liability insurance to protect against potential risks and claims associated with renting properties. A minimum suggested coverage includes at least $1 million per occurrence for adequate protection.
- Payment Deadlines: Taxes must be reported and remitted according to the schedules set by the Florida Department of Revenue and the Lee County Tax Collector. Operators should adhere to timely monthly or quarterly reporting and payment deadlines to avoid penalties or additional charges.
- For additional details on tax collection, registration, and remittance procedures, visit the Florida Department of Revenue or the Lee County Tax Collector.
7. How Chalet Can Help
- Local Realtor Partnerships:
Looking to invest in short-term rental properties? Chalet’s nationwide network of specialized realtors is here to guide you. Our experts understand the nuances of vacation rentals and local markets, helping you identify high-ROI properties and navigate complex regulations with ease. Best of all, their services come at no extra cost to you. Click here to connect for free. - Chalet’s Regulation Updates:
Chalet email subscribers receive updates regarding regulatory changes in cities. Subscribe here!
- Connect with Local Experts:
At Chalet, our goal is to enable everyone to create wealth with short-term rentals. We bring the experience and expertise to optimize your rental property. Connect with a STR professional in your area here.
Recommended Tools and Resources
- Chalet STR Market Insights Tool
Chalet offers a free market analytics tool that allows investors to explore detailed data on occupancy rates, average daily rates, revenue estimates, and market trends for specific cities. This tool helps investors make informed decisions based on comprehensive insights. Access the STR Market Insights Tool. - Airbnb Income Guide
Investors can dive into this guide to better understand how to maximize income from STRs. It covers critical aspects such as dynamic pricing, guest management, and how to boost profitability through effective listing strategies. Read the Comprehensive Guide to Airbnb Income. - Chalet Investor Guides
These investor guides provide city-specific insights, including tax obligations, regulations, investment potential, and detailed market data. Investors can select from over 200 city guides to find data tailored to their target market. Explore Investor Guides. - AI-Powered Market Comparison Dashboard
Chalet’s market comparison dashboard offers a powerful tool for comparing different STR markets based on yield, occupancy rates, and other key performance indicators. This tool is particularly useful for investors looking to diversify across different regions. Check out the Market Dashboard. - Chalet STR Calculator
The free Chalet STR Calculator is a powerful tool designed to help short-term rental investors evaluate potential property performance with ease. It enables users to estimate revenue, analyze expenses, and project profitability for any STR market, streamlining investment decisions. Whether you’re comparing properties or exploring new opportunities, the Chalet STR Calculator simplifies the process with precision. Learn more about the Chalet STR Calculator.
DISCLAIMER: The information provided in these guides is for entertainment and general informational purposes only. It may not reflect the most up-to-date regulations, and Chalet is not responsible for any inaccuracies or changes to the information on third-party sites. These guides are not legal advice. We highly recommend verifying details directly with local authorities and consulting professionals before making any investment decisions. Ultimately, it is your responsibility as an investor to ensure compliance with local laws.
