This article is a guest post by Julie Gates, you can read more about the author here.
As investors seek emerging markets in the Southeast, tiny Savannah, Georgia has started to hit national lists. Placed perfectly on the I 95 corridor, Savannah sits between Florida and the Northeast passage. Savannah has also been quietly growing its container port, overtaking the volumes of Long Beach, CA in 2022. Capitalizing on the city’s growth, many real estate investors are turning to short term rentals in Savannah, GA.
Savannah’s Historic Charm and Dynamic Future
With the fast paced growth of Port of Savannah, industry has followed. Hyundai and LG among others are investing $2 Billion in the area. Cranes and construction vehicles are everywhere. The time to buy real estate was 5 years ago. With plenty of room for growth in the market still, the next best time to buy is today! These plants are currently under construction. Once completed, thousands of jobs will become available and a great migration to Savannah will begin.
Along with being a great place to work and live, Savannah is most known for its vibrant tourist industry. The first city in Georgia, Savannah was built in 1733 around 26 squares. It is the only city of its kind, with beautiful parks and well preserved mansions surrounded by moss. Construction on the Convention Center will be completed in 2024, doubling the square footage. Hotels have been buying out commercial office space in the city’s Historic District since 2022. Recently, the Ritz Carlton announced a hotel in the works in the Hostess City.
Growth of Short Term Rentals in Savannah, Georgia
Real estate investors have also taken notice. Savannah has boasted a 17-20% year over year appreciation the past 3 years. Opportunities for flips are everywhere as older sections of the city become newer, trendier neighborhoods, like the city’s Starland District. This well positioned neighborhood, avoided by locals for years, has become some of Savannah’s most desirable blocks.
Short term rentals, the darlings of real estate investors due to the high cash flow, have followed along nicely. In Savannah, short term rental regulations have been in place for many years. This has created a premium price boost for a property with a short term rental certificate in place. These regulations both confuse and delight real estate investors in Savannah. There is significant money to be made if the regulations are understood and followed. Investors who don’t understand them or work with the wrong agent find themselves frustrated at best, losing a lot of money at worst.
10 Tips for Short Term Rental Investors in Savannah, Georgia
Navigating the complexities of acquiring a short term rental in Savannah can be a challenge. However, buyers who have a full understanding of the licensure requirements and know how to plan their rental strategy (short-term, medium-term, long-term) will be very successful as this little known market appreciates on the back of the fast growing Savannah and its surrounding areas.
- There is a licensing requirement for Savannah’s Historic District and also Tybee Island. You have to purchase a property with a certificate in place (STVR) to be able to legally run a short term rental in these locations.
- The MLS doesn’t have a way to select STVR Certificate (Short Term Vacation Rental), so buyers have to read every listing description when searching in Savannah’s Historic District and also on Tybee Island.
- Buyers can get a new STVR Certificate in the Historic District and Tybee Island if the property is zoned Commercial.
- Buyers who plan to live in the Historic District of Savannah and will be making the home their primary residence on their tax returns can also get a new STVR Certificate IF the home is multifamily and IF the owner occupies the main unit.
- Areas of Chatham County that are NOT in the city limits CAN get a Chatham County STVR certificate fairly easily by applying with the county.
- Some web sites say that some areas of the Historic District haven’t met their STVR quota yet. This is categorically untrue. There is a 3 year waiting list for a new STVR certificate.
- For investors who are patient and really want a short term rental in Savannah’s Historic District, investors can buy a property in the 31401 zip code and rent it long term. After purchasing a property, investors can put the property on the waiting list for a STVR certificate. If the investor is lucky enough to make it to the top of the list, the property will become 20-30% more valuable with the STVR certificate in place.
- Both Savannah and Tybee Island take these certificates as very serious sources of tax revenue. Be aware that if you purchase a property with the certificate in place and you do not rent the property enough to provide the city with the expected tax revenue, the property will be on probation for a year. Additionally, the STVR certificate will be removed and handed to someone on the waiting list if the tax revenue isn’t levied.
- Savannah has an 11 month market for short term and medium term rentals. The slowest time of year is typically between Thanksgiving and Christmas.
- Tybee has an 8-9 month market for short term rentals. When the temperatures drop below 70 degrees, the beaches tend to sit fairly empty
Apply for a Short Term Rental Loan
Looking Ahead: The Future of Savannah’s Short Term Rental Market
The medium term rental market has also grown in Savannah, thanks in part to two of the chapters in the book, The 30 Day Stay being written by one of Savannah’s own. A big part of the pool of guests for this investment trend are digital nomads, construction workers and the vibrant movie industry. Short term rental investors who can rent the home for stays of any length do the best in the Savannah area and in the surrounding suburbs.
Savannah’s short term rental market is heading north as investors send their money south. Working with a local agent who understands these regulations and neighborhoods is crucial to the success of both local and out of state investors. While investors cannot take part of the inexpensive Savannah of the past, the region is poised for steady growth as industry continues to to move in and tourism explodes.
For more information on investing in Georgia and the best financing options for investors, reach out to Easy Street Capital today!
About the Author
Julie Gates is an entrepreneur, investor, and licensed REALTOR® based in Savannah, GA. Since 2004, she has developed expert-level knowledge of the market and built her own portfolio consisting of residential, commercial and self-storage units. Needing a property management company for her own rentals, Julie started Sid Was Here in 2017. Named after a squirrel her son rescued, Sid Was Here is a property management firm specializing in Short Term Rentals. In recent years Sid Was Here has become Savannah’s leading property management company for medium term rentals. Julie herself is a featured author in the book, The 30 Day Stay, published by Bigger Pockets in 2023, and frequently speaks at real estate investing events nationwide.
Out of management was born a real estate sales team, focused on like-minded real estate investors. Her network of investor-friendly agents, Team 912, specialize in commercial real estate as well as residential. Julie brings her many years of experience to her real estate team. In addition to owning several companies, Julie also produces a local podcast about investing in Savannah called Cashflow Savannah. She also hosts a monthly meetup in the area, Cashflow Savannah Meetup.
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