Looking to generate steady rental income on Florida’s Space Coast? If you are buying your first rental in Melbourne or expanding a portfolio from out of town, you need clear numbers, local context, and a practical plan. This playbook shows you where and what to buy, what rents to expect, how returns can look, and how to manage risk in Brevard County. Let’s dive in.
Why Melbourne rental demand holds up
Melbourne brings a diverse tenant base. Florida Institute of Technology supports steady demand from students, staff, and young professionals. Aerospace and defense employers on the Space Coast, along with Patrick Space Force Base and proximity to Kennedy Space Center, attract engineers and technical talent who often rent first. Healthcare systems and clinics add a consistent pool of skilled professionals. The Melbourne Orlando International Airport area and nearby industrial parks draw shift workers and families seeking convenient commutes.
This mix supports multiple rental strategies, from student‑oriented units near FIT to family‑friendly homes in suburban neighborhoods and higher‑end coastal properties with seasonal pull.
Best micro‑markets and property types
Near FIT and Downtown / Eau Gallie
- Profile: Walkable pockets with a higher share of students and young professionals, plus older homes and small multifamily.
- Property fit: 1–3 bedroom apartments, duplexes, small multi‑unit houses, townhomes.
- Management notes: Expect more turnover tied to academic terms. Furnished or semi‑furnished options can help occupancy. Plan for targeted marketing around the school calendar.
West Melbourne / Airport corridor
- Profile: Growing suburban areas with good access to the airport and industrial employers.
- Property fit: Single‑family rentals with 3–4 bedrooms that appeal to families and professionals.
- Management notes: Lower turnover than student areas and potential for long‑term tenants. Moderate rents with room for appreciation as development continues.
Viera and northern Melbourne
- Profile: Planned communities with amenities and many newer builds.
- Property fit: Newer single‑family homes and townhomes, sometimes small multifamily.
- Management notes: Tenants expect amenities and strong upkeep. HOA standards can shape leasing terms and add costs but can support higher asking rents.
Coastal neighborhoods
- Profile: Melbourne Beach, Indialantic, and Satellite Beach command premium rents and see seasonal demand.
- Property fit: Higher‑end single‑family homes and 2–3 bedroom condos, including beachfront options.
- Management notes: Insurance and maintenance costs are higher. Short‑term rental opportunities may exist, but always confirm local rules before modeling STR income.
Entry‑price options nearby
- Profile: Palm Bay and parts of South Melbourne generally offer lower price per unit and lower rents, which can produce higher initial yield.
- Property fit: Single‑family and small multifamily.
- Management notes: Strong screening and healthy maintenance reserves are key. Demand can be less stable than core Melbourne.
What rents and returns look like
Use these rent ranges as a starting point and always verify current comps for the exact location and condition:
- Studio/efficiency: $900 to $1,200 per month
- 1 bedroom: $1,100 to $1,600 per month
- 2 bedroom: $1,400 to $2,200 per month
- 3 bedroom single‑family: $1,800 to $3,000 per month
- 4+ bedroom single‑family: $2,400 to $4,000+ per month
Typical investment metrics in the area:
- Cap rates: Often 4% to 7%, with coastal and premium assets on the lower end.
- Cash‑on‑cash: Common targets are 6% to 12%, depending on leverage and expenses.
- Expense ratio: Many long‑term rentals run 30% to 50% of gross rent when you include taxes, insurance, repairs, management, and reserves. Plan conservatively for coastal insurance.
Two sample pro formas
These simplified examples show how numbers can stack up. They are illustrative. Adjust for current rates, taxes, insurance, and actual comps.
Scenario A: Single‑family near FIT
Assumptions:
- Purchase price: $350,000; 25% down; loan at 6.0% for 30 years
- Monthly mortgage: about $1,573
- Monthly rent: $2,000; Gross annual rent: $24,000
- Vacancy: 6%
- Estimated operating expenses: about $11,256 (taxes, insurance, management, reserves)
Results:
- Effective gross income: about $22,560
- NOI: about $11,304
- Annual debt service: about $18,876
- Cash flow before tax: about negative $7,572
- Cap rate: about 3.2%
- Cash‑on‑cash: about negative 8.7%
Interpretation: In today’s pricing and rate environment, many single‑family homes near FIT will not cash flow with high leverage unless you secure a lower purchase price, higher rent, or different financing. Some investors focus on appreciation, principal paydown, and potential rent growth.
Scenario B: Four‑unit in West Melbourne
Assumptions:
- Purchase price: $600,000; 25% down; loan at 6.0% for 30 years
- Monthly mortgage: about $2,697
- Rents: $1,200, $1,200, $1,250, $1,300; Gross annual rent: $59,400
- Vacancy: 7%
- Estimated operating expenses: about $19,619 (taxes, insurance, management, utilities, reserves)
Results:
- Effective gross income: about $55,242
- NOI: about $35,623
- Annual debt service: about $32,364
- Cash flow before tax: about $3,259
- Cap rate: about 5.9%
- Cash‑on‑cash: about 2.2%
Interpretation: Small multifamily can improve cap rate and produce positive cash flow, though cash‑on‑cash can remain modest unless you source below‑market deals, improve operations, or adjust financing.
Management and operations
- Property management fees: Expect about 8% to 12% of collected rent for long‑term rentals. Short‑term rentals often cost more to manage.
- Turnover planning: Student‑heavy pockets and coastal areas turn more often. Budget extra for marketing, turns, and vacancy.
- Maintenance: Prepare for hurricane season with pre‑season checks and a preferred vendor list for roofing, tree work, and storm prep. Build larger reserves for coastal assets.
- Insurance: Wind and flood coverage can be significant. Wind deductibles are often a percentage of insured value.
- Leases: Standard 12‑month terms for long‑term rentals; semester or 9–10 month leases near FIT can be effective. Consider rent escalations, pet policies, and utility pass‑throughs.
- Legal basics: Florida’s landlord‑tenant rules are covered in Chapter 83 of the Florida Statutes. Processes can move quickly if notices are correct. Always confirm local timelines and forms.
Short‑term rental reality check
- Local rules vary: Confirm City of Melbourne and Brevard County requirements before assuming STR income. Look for registration, tax remittance, parking, and noise standards.
- Insurance: STR use often needs specific coverage. A standard landlord policy may not apply.
- Seasonality: Gross revenue can spike in peak months, but expenses and vacancy risk rise too. Build conservative models.
Due‑diligence checklist
Pre‑offer
- Pull recent rent comps within 0.5 to 2 miles for similar beds, baths, and condition.
- Confirm school zones if you plan to market to family renters.
- Check zoning, permitted uses, and any neighborhood rules that limit rentals or STRs.
- Run an insurance check for wind and flood; review FEMA flood maps for the property’s zone.
- Build a conservative cash‑flow model with 6% to 10% vacancy and 30% to 50% expense ratios.
- For occupied properties, request the rent roll and review for accuracy.
Under contract / pre‑close
- Order inspections: general, roof, HVAC, plumbing, pest; add exterior and window checks for coastal homes.
- Obtain a title commitment and consider owner’s and lender’s title insurance.
- Review a current survey or plat for encroachments.
- Read HOA documents for leasing caps, minimum terms, and any special assessments.
- Verify utility accounts and any owner‑paid services.
- Confirm licensing or registration for rentals if required by the municipality.
- Secure insurance binders and confirm wind mitigation credits.
- Review the management agreement and lease templates with a Florida‑licensed attorney.
- For multifamily, obtain tenant estoppels near closing.
Post‑close / operations
- Build a vendor roster and schedule routine maintenance, including pre‑hurricane checks.
- Standardize screening, online rent collection, and pet addenda.
- Maintain replacement reserves and keep 6 to 12 months of liquidity for storms and vacancy.
Risk and mitigation on the Space Coast
- Hurricane and wind: Prioritize wind‑resistant upgrades, document mitigation credits, and maintain higher CapEx reserves.
- Flood exposure: Check FEMA maps, price flood insurance where needed, and avoid the highest‑risk floodplains when possible.
- STR regulation changes: Base your plan on long‑term rents unless STR rules are confirmed and stable.
- Employer concentration: Balance your portfolio across micro‑markets and tenant types to reduce concentration risk.
- Interest rates: Model purchases at higher rates and stress‑test debt service. Consider fixed financing for stability.
Your next steps
- Choose a micro‑market that fits your tenant profile and budget.
- Verify today’s rent comps and insurance quotes for the specific address.
- Model conservative returns with clear reserves and a plan for turnover.
- Line up management and vendor support before closing.
If you want a local partner to source, underwrite, and prepare a rental that performs, connect with the boutique team that lives and works this market. Reach out to LGN Group - Ann LeNoir & Jenny Shupard to map your strategy and see on‑the‑ground opportunities across Melbourne and the Space Coast.
FAQs
What makes Melbourne, FL a strong rental market?
- A diverse tenant base from FIT, aerospace and defense, healthcare, and airport‑area employers supports steady demand across several micro‑markets.
Where should I buy a rental near Florida Institute of Technology?
- Look around FIT, Downtown, and Eau Gallie for small multifamily, duplexes, and townhomes, and plan for student‑cycle marketing and slightly higher turnover.
What are typical long‑term rents in Melbourne right now?
- As a starting range, studios often run $900 to $1,200, 1 beds $1,100 to $1,600, 2 beds $1,400 to $2,200, and 3 beds $1,800 to $3,000, with higher rents in newer or coastal areas.
How do hurricanes affect Space Coast rental investing?
- They increase insurance costs and CapEx planning, so you should price wind and flood coverage, capture mitigation credits, and keep larger reserves.
Are short‑term rentals allowed in Melbourne and nearby beaches?
- Rules vary by city and neighborhood, so confirm local registration, taxes, and lease‑term limits before you underwrite any STR income.
