Quick answer: Highlands County is an event market. The Sebring International Raceway’s March endurance week produces demand nothing else in the county comes close to, and a property can earn a large share of its annual revenue in a handful of nights. The 5% county tourist tax is administered by the state, so platform remittance reaches it. The exposure is the other side of that: event bookings are frequently arranged directly, and direct rent has no platform behind it.
A year with one very large week
Most rental markets have a season. This one has an event, and the difference matters for underwriting.
| Demand source | When | Typical stay | Rate character |
|---|---|---|---|
| Endurance racing week | March | 3 to 5 nights | the year’s peak by a wide margin |
| Other race weekends | through the year | 2 to 3 nights | modest premium |
| Lake recreation | warmer months | weekends to weeks | ordinary |
| Seasonal residents | winter | 3 to 6 months | low nightly equivalent, high certainty |
| Work-related stays | year round | weeks to months | steady, unglamorous |
The March week is the reason many owners buy here, and it is also the reason many overpay. A rate achieved across 4 nights of an international event is not an annual rate, and a purchase underwritten by annualising it will not work.
The honest way to model this county is to build the year from the bottom: assume the quiet months are quiet, price the lake and work-related demand realistically, and then treat the event week as the upside it is rather than the base case. Ask for 3 years of actual bookings for comparable properties, showing both the event week and the other 51.
Concentration is a risk as well as a return
A revenue line that depends on one week each year carries risks a diversified market does not:
Event risk. Schedules change, formats change and dates move. A calendar change alters the single most valuable week of your year.
Weather risk. A washed-out event week is not made up elsewhere.
Supply response. When one week carries premium pricing, supply appears for that week. Every owner in the county has the same idea, and the marginal listing sets the clearing price.
Cash flow shape. Revenue arrives in a lump while costs, insurance, tax, maintenance and any mortgage, arrive monthly.
None of that makes the market unattractive. It makes it a market to underwrite conservatively and to hold with a cash buffer, rather than one to leverage against a peak-week projection.
State-administered, and what that covers
Highlands is one of the Florida counties whose local option transient rental tax is reported and remitted to the Department of Revenue rather than to the county.
| Component | Rate | Remitted to |
|---|---|---|
| Florida state sales tax on transient rentals | 6% | Department of Revenue |
| Highlands discretionary sales surtax | county surtax, where levied | Department of Revenue |
| Highlands County tourist development tax | 5% | Department of Revenue |
One authority receives everything, which is the administrative advantage of a state-administered county. A platform remitting Florida tax to the Department for a Highlands booking has dealt with both components of that booking.
The limit is the same everywhere: it covers that platform’s bookings. And in an event market, a large share of the best-paying nights arrives directly, through returning visitors, teams, crews and word of mouth built over years. That rent has no platform behind it and it is the owner’s to collect and remit.
Register with the Department of Revenue before the first booking, and keep the event week’s direct bookings in a separate column from platform rent. Confirm the filing frequency and whether a zero return is required in the many months with no rent at all. See Florida sales tax on rentals.
Licensing, including the advertising limb
A DBPR vacation rental licence is required where the property meets the transient public lodging test: broadly, rented more than 3 times in a calendar year for periods under 30 days, or advertised as regularly available for such stays.
That second limb catches owners here specifically. A property let only for race week may or may not exceed 3 lettings in a year, but a property listed publicly for short stays is advertised as available regardless of how many bookings result. Assess both limbs against the actual pattern before concluding the licence is not required.
What local government keeps
Under Florida Statute 509.032(7)(b), a local government may not prohibit vacation rentals or regulate the duration or frequency of stays by an ordinance adopted after 1 June 2011, and pre-2011 rules survive and may be amended only to become less restrictive.
Local government retains registration and inspection programmes, and retains generally applicable rules on noise, parking, waste, occupancy limits and life safety. In an event market the parking and occupancy rules are the ones that bite, because event bookings are exactly the ones that arrive with more vehicles and more people than an ordinary letting.
Establish the occupancy limit and the parking provision for the specific property before advertising a capacity you cannot lawfully deliver. Private restrictions sit outside preemption entirely: see the HOA and association restrictions checklist.
Where the 6-month line falls
The county tourist tax and the state transient sales tax both attach to lodging of 6 months or less. A single written lease running longer sits outside the transient regime, and outside the licensing test with it.
In this county the long-let alternative is stronger than the event narrative suggests. Seasonal residents, agricultural and construction work and family relocation all produce demand measured in months, and a 12-month tenancy at a modest rent carries no tax registration, no returns, no licence, no cleaning and no vacancy between bookings.
Model both before choosing. The event week is more exciting; the annual tenancy is frequently more profitable after costs, and it is far less exposed to a calendar change.
Financing and the cost stack
Lenders price a letting purchase differently from a second home, so state the intended use at application. Conventional investment lending, a DSCR loan underwritten on the property’s own income, or cash are the usual routes, and overseas buyers work through foreign national mortgage programmes.
A DSCR loan is harder to place on concentrated event income than on a signed 12-month lease, because the underwriting wants a repeatable figure. Where the plan is event-led, expect to bring more deposit or to demonstrate several years of history.
Before you buy in Highlands County
- Register with the Department of Revenue before the first booking.
- Confirm the filing frequency and whether zero returns are required in months with no rent.
- Track platform rent and direct rent as separate figures, especially for event week.
- Establish whether the DBPR licensing test is met, including the advertising limb.
- Get 3 years of actual bookings for comparable properties, event week and the rest separately.
- Check the occupancy limit and parking provision before advertising a capacity.
- Model a 12-month tenancy alongside the event-led model on the same property.
- Hold a cash buffer sized to the gap between lumpy revenue and monthly costs.
- Read any association documents, which can restrict letting more tightly than the county.
Where this leaves an investor
Highlands is a genuine niche rather than a small version of a coastal market. Its one great week is real and it is worth money, and building an entire purchase on it is how owners get hurt.
Underwrite the quiet 51 weeks first. If the property works on lake, seasonal and work-related demand, or on an ordinary tenancy, then the event week is profit rather than a requirement, and that is the only version of this market worth buying into. For neighbouring inland markets see Polk County and Citrus County.
Frequently Asked Questions
5% on lodging of 6 months or less, and Highlands is one of the counties whose local option transient rental tax is reported and remitted to the Florida Department of Revenue rather than to the county. That changes where the return goes and means platform remittance to the state reaches the county levy.
For its own bookings, in effect yes, because Highlands sits among the state-administered counties and platforms remitting Florida tax to the Department of Revenue cover that levy. Direct bookings and channels without a collection agreement remain the owner's obligation, which matters more here than elsewhere because event bookings are often arranged directly.
Very. The Sebring International Raceway hosts endurance racing that draws a national and international audience, and the March event week produces the sharpest accommodation demand of the year. A property can earn a large share of its annual revenue in a single week, which changes how the year should be underwritten.
Yes, but of a different kind: lake-based recreation around Lake Istokpoga and the chain of lakes, seasonal residents, agricultural and construction work, and family visits. Most of that demand is measured in weeks or months rather than nights, and much of it crosses the 6-month line into ordinary tenancy.
Yes, where the property meets the transient public lodging test: broadly a dwelling rented more than 3 times in a calendar year for periods under 30 days, or advertised as regularly available for such stays. Letting only for race week can still meet the test once the advertising limb is considered.
Not by an ordinance adopted after 1 June 2011. Florida Statute 509.032(7)(b) preempts local prohibitions and local regulation of stay duration or frequency, except where a local law predates that date. Registration and inspection programmes remain available, as do generally applicable rules and any private association restrictions.
Underwrite the quiet weeks before you offer in Highlands County
Tell us the property you are considering. We will come back with 3 years of comparable bookings split between event week and the rest of the year, the Department of Revenue registration steps and filing frequency, whether the DBPR licensing test is met, and the occupancy and parking limits for the parcel.