Sell or Rent Your SWFL Home? 2027 Decision Guide

If you rent out your Southwest Florida homestead, you generally lose the homestead exemption and the Save Our Homes cap, so your property is taxed as non-homestead, which from 2027 means a 5% cap on non-school assessment increases instead of the 3% homestead cap. You also take on landlord flood disclosure, landlord insurance and possible rental registration. Selling usually wins when your rent would not clearly cover the higher taxes, insurance, vacancy and repairs, or when you need your equity and portability for the next home.

Last updated November 6, 2026.

What happens to my homestead exemption if I rent my home out?

Renting all or substantially all of a homestead is treated as abandoning it under Florida Statute 196.061, so the exemption ends until you move back in. That matters more after Amendment 3, because the larger exemption only applies to a homestead.

The Collier County Property Appraiser explains the timing. Abandonment after January 1 does not affect that year's exemption unless the home is rented for more than 30 days per calendar year for two consecutive years. Property rented for more than six months is presumed to be commercial use. If you stop qualifying and do not tell the appraiser, the office can pursue back taxes for up to ten years with 50% penalties and 15% annual interest (Collier County Property Appraiser, accessed November 2026).

Losing homestead also ends the Save Our Homes cap, which holds homestead increases to 3% or inflation, whichever is less (2.7% for 2026, Martin County Property Appraiser). Under Florida Statute 193.155, the home is then reassessed at just value, so a long-time owner can see a large jump in taxable value.

Amendment 3, approved by about 62% of voters on November 3, 2026 (unofficial count, News4Jax), raises the non-school homestead exemption to up to $150,000 in 2027 and $250,000 in 2028. A rental gets none of it, so the tax gap widens in 2027. See Amendment 3 and portability for sellers for the homestead side.

How does the new 5% non-homestead cap change rental taxes?

Starting with the 2027 tax year, Amendment 3 lowers the annual assessment increase cap on non-homestead property, including rentals and second homes, from 10% to 5%. Property appraisers say the cap applies to non-school taxes only, so school taxes stay based on full market value (Leon County Property Appraiser and Kaufman Rossin, November 2026).

The cap slows growth after the reset but does not stop the reset itself.

Watch the local side too. Lee County staff modeled about $121 million in lost revenue for fiscal 2027-28 and named user fees, MSTUs and "roll-up" millage as options (CitizenPortal summary of the Lee County Commission meeting, September 2026). WGCU reported that non-homestead owners could carry a larger share of the tax burden as local governments adjust (October 15, 2026). Non-ad valorem assessments, such as fire, stormwater, solid waste and Cape Coral utility assessments, are not reduced by any exemption (Leon County Property Appraiser).

What do landlords now have to disclose about flooding?

Since October 1, 2025, Florida landlords must give tenants a flood disclosure for residential leases of one year or longer, under Florida Statute 83.512 created by SB 948 (Florida Realtors, September 30, 2025).

It covers known flood damage during your ownership, flood insurance claims and flood assistance, the same items sellers disclose. It must be a separate document, not a clause in the lease. If a landlord skips it and the tenant suffers substantial flood loss, the tenant may terminate the lease with written notice (Florida Realtors, September 30, 2025). If the home took water in Ian (2022), Helene or Milton (2024), answer carefully. Sellers face a parallel duty. Since 2024, Florida Statute 689.302 requires a seller flood disclosure at or before the contract, expanded in 2025 to cover known flood damage and flood assistance from any source (Florida Laws chapter 2024-215; Henderson Franklin, September 29, 2025).

What do insurance and flood coverage cost for a rental?

Expect to replace your homeowners policy with a landlord or dwelling policy, and get quotes before you commit to renting, because the premium can change your rental math more than anything else.

If your policy is with Citizens Property Insurance, flood coverage is required on personal residential policies with wind coverage at $400,000 or more of dwelling coverage as of January 1, 2026, and on all such policies regardless of value starting January 1, 2027. The flood limit must at least match the dwelling limit or the NFIP maximum of $250,000 for the building (Citizens, accessed November 6, 2026). Ask your agent whether your specific landlord policy form falls under the rule.

For context, the average NFIP policy in Lee County costs about $1,556 a year (NerdWallet analysis of NFIP data, May 2026), and coastal homes often pay far more. Cape Coral's Class 5 rating gives eligible NFIP policies a 25% discount (Cape Coral Breeze, April 2025), and the City of Fort Myers' Class 6 rating gives 20% (WGCU, January 2025).

Can I rent short-term in Cape Coral, Fort Myers or Naples?

Sometimes, but the rules depend on the city, the zoning, and any HOA or condo association, so verify with the city or county and your association before you count on short-term income.

Cape Coral: All residential rentals in city limits, long-term and short-term, must register every year. Fees are $35 a year for long-term and $350 a year for short-term rentals (six months or less), with fines for unregistered rentals (WGCU, February 2, 2026).
City of Naples: The city's FAQ says single-family homes generally must be rented for at least 30 days, with an exception allowing shorter rentals three times per calendar year, and short-term availability may not be advertised (City of Naples, accessed November 2026).
Fort Myers, unincorporated Lee and Collier counties: Florida law limits outright local bans, but registration, tourist development tax accounts, parking and occupancy rules may apply (AgentsGather, December 18, 2025, an agent blog). Confirm current rules directly with the City of Fort Myers, Lee County or Collier County.

Many associations also set minimum lease terms, so read the declaration first.

How do I compare rental income vs selling now?

Compare the net cash you would walk away with today against the net rental income after every new cost, plus what happens to your equity while you wait.

On the rental side, list the expected rent and subtract the property tax at non-homestead value, the landlord and flood policy, HOA dues, rental registration, management, vacancy, repairs, and a reserve for hurricane season. On the sale side, start with what similar homes are actually closing at, not list prices. Over the 12 months to October 2026, the single-family median was $385,000 in Cape Coral and $820,000 in Naples, and a typical sale took about 53 to 62 days to reach a contract plus 33 to 36 days to close (Cameron Smith analysis of MLS data, 12 months to October 2026). Cape Coral had 5.1 months of single-family supply in October 2026 and Naples had 5.3.

What single-family homes are selling for and how long it takes, 12 months to October 2026
City	Median price	Median days list to contract	Median days contract to close	Sale vs original list	Sales with a price reduction
Cape Coral	$385,000	53	33	94.6%	55.3%
Fort Myers	$545,000	45	35	94.4%	50.5%
Lehigh Acres	$310,000	59	34	96.2%	54.3%
North Fort Myers	$340,000	60	32	93.3%	50.4%
Estero	$650,000	62	37	93.9%	51.7%
Bonita Springs	$730,000	58	36	92.9%	48.6%
Naples	$820,000	62	36	92.7%	49.4%
Marco Island	$1,550,000	72	35	90.0%	54.2%

Source: Cameron Smith analysis of Southwest Florida MLS data, pulled November 6, 2026.

How these numbers were measured. Figures come from closed MLS sales and listings in Southwest Florida MLS, pulled November 6, 2026. Each city follows the MLS City field. Estero includes Miromar Lakes, Fort Myers covers only the city limits and downtown MLS areas (unincorporated Fort Myers mailing addresses are left out), and Naples is the Naples postal city on the Collier mainland, with Marco Island counted separately. Single-family means detached homes and detached villas that are not condo owned. Condo and townhouse covers condo-owned units in low, mid and high rise buildings, attached villas and townhouses. Manufactured homes, co-ops, timeshares, land and rentals are excluded. Sales under $20,000 or below 50% or above 150% of list price were dropped, and sales entered after the fact without MLS marketing count toward prices but not toward days or sale-to-list figures. Days list to contract runs from the listing date to the first pending date. Months of supply is active listings at period end divided by average monthly closed sales over the prior 12 months. Flood zone is not in the MLS export, so any flood zone figures on this page come from FEMA or county sources.

Two more lines belong in the comparison. First, federal tax. The IRS lets an owner exclude up to $250,000 of gain ($500,000 for most joint filers) on a main home owned and lived in for two of the five years before the sale (IRS Topic 701). Rent too long and you can lose that window, so ask your CPA. Second, rates. The 30-year fixed averaged 7.18% (Freddie Mac, November 5, 2026), which limits how far buyers can stretch now and later.

Cameron's sell vs rent analysis pairs closed sales for your street or building and an estimated net after closing costs with a rental cost list you fill with your own quotes.

What about portability if I rent first and buy later?

Portability lets you move up to $500,000 of Save Our Homes benefit to a new Florida homestead, but the clock starts when you give up the old homestead, and renting counts as giving it up.

The Lee County Property Appraiser says the new homestead must be established within three years of January 1 of the year you abandoned the old one. Upsizing transfers the full benefit difference, while downsizing transfers a percentage (new just value divided by old). You apply for homestead and portability together by March 1 using forms DR-501 and DR-501T. If you rent for several years before buying again, you can run out of time and leave that benefit behind. Amendment 3 does not change portability (Volusia County Property Appraiser FAQ).

Whether a current homesteader who buys again after 2027 keeps eligibility for the larger exemption without a new wait has not been addressed in final rules. Implementing legislation is expected from a special session and the 2027 regular session (Florida Realtors, November 5, 2026).

When does selling clearly win?

Selling tends to win when the rent would barely cover the new costs, when you need the equity or portability for your next home, or when the home needs work a tenant would make worse.

Your rent estimate minus non-homestead taxes, landlord and flood insurance, HOA and management leaves little or nothing.
You plan to buy another Florida homestead within three years and want your portability intact.
Your two-of-five-year federal capital gains window is close to closing.
The roof, HVAC or seawall is near replacement, or the condo has a pending special assessment.
Your HOA or condo association limits leasing, or the city's registration and rental rules do not fit your plan.

Renting can make sense when the numbers work after every cost and you do not need the equity soon. If you are leaning toward selling a condo, read how to sell a condo in Southwest Florida. For a value range first, see what your home is worth.

Frequently asked questions

Do I lose Save Our Homes if I rent my house?

Usually, yes. Renting all or substantially all of a Florida homestead is treated as abandonment under Florida Statute 196.061, which ends the homestead exemption and the Save Our Homes cap. The home is then reassessed at market value. The Collier County Property Appraiser says a rental after January 1 does not affect that year's exemption unless it is rented more than 30 days a year for two straight years.

Are school taxes capped on rentals?

No. Starting in 2027, Amendment 3 lowers the annual assessment cap on non-homestead property from 10% to 5%, but property appraisers in Leon and Volusia counties say the cap applies only to non-school taxes. School district taxes on a rental or second home stay based on full market value each year. Confirm details with the Lee or Collier County Property Appraiser.

Do landlords need a flood disclosure form?

Yes, for residential leases of one year or longer. Since October 1, 2025, Florida Statute 83.512 requires landlords to disclose known flood damage during their ownership and any flood insurance claims or federal flood assistance, per Florida Realtors (September 30, 2025). Give it before the tenant signs, and keep a copy with the lease. A real estate attorney can review your form.

Can I Airbnb my Cape Coral house?

Possibly. Cape Coral requires every residential rental in city limits to register each year, with a $350 annual fee for short-term rentals of six months or less, per WGCU (February 2, 2026). Your HOA or deed restrictions may limit rentals further, and state and county tourist taxes apply. Verify current rules with the City of Cape Coral and Lee County before you rely on short-term income.

How long can I wait to use portability?

The Lee County Property Appraiser says you must establish a new Florida homestead within three years of January 1 of the year you abandoned the old one. Renting your home counts as abandoning the homestead, so the clock can start while you are a landlord. Apply for homestead and portability together by March 1 of the year you claim the new home.

Does Amendment 3 make renting more or less attractive?

It cuts both ways. The new 5% non-school cap from 2027 slows assessment growth on rentals, but the much larger homestead exemption, up to $150,000 in 2027 and $250,000 in 2028, goes only to owner-occupied homes. That widens the tax gap between keeping a home as your homestead and renting it. Run your own numbers with the Lee or Collier appraiser's estimator.

Talk to Cameron

If you are deciding between selling and renting before season, call or text Cameron at (239) 940-2101 or use the contact page. Cameron will pull recent closed sales for your street or building, estimate your net proceeds, and lay out the rental side cost by cost so you can compare them on one page. Area details: Cape Coral, Fort Myers, Naples and Estero. Related: Amendment 3 for buyers and flood insurance and the 2027 Citizens rule.

Cameron Smith, eXp Realty LLC. Florida Sales Associate, license SL3246540. This page is general information, not tax, legal or insurance advice. Homestead, portability and rental rules can change with implementing legislation. Verify your situation with the Lee or Collier County Property Appraiser, your insurer, your association, the city or county rental office, a real estate attorney and your CPA before you act.

Sources

Southwest Florida area guides

Naples Cape Coral Fort Myers Bonita Springs Marco Island

Should You Sell or Rent Your Southwest Florida Home in 2027?