The warm weather is only rivaled by Florida's hot real estate market. There's a high demand for all investment property types, from long-term rental properties to short-term rentals. Better yet, the local housing market shows no indication of slowing down, even despite rising housing prices.
Part of the reason that real estate investment in Florida is so popular is because of its unique tax situation. There's no personal income tax in the Sunshine State. This is part of the reason that many retirees relocate here, but it's also very helpful for investors. Property taxes are also relatively low at 0.98% as compared to the national average of 1.08%. The average Floridian pays around $1,752 a year, which is quite low.
Florida's GDP grew by over 25% between 2018 and 2023, ballooning to an incredible $1.1 trillion this year. It has an incredibly strong job market, growing by 3.1% in the past year — very impressive, considering that the national average was just 1.9%. These job opportunities include options in healthcare, education, leisure, and hospitality, as well as construction and finance.
In addition to the excellent economic growth, Florida's population is also on the rise. Over 463,000 residents moved to the state last year, a 2.1% population increase. The growing population, coupled with slow construction, means there's an increased demand for all property niches.
While Florida is most known for being the home of multiple theme parks, including Disney World and Universal Studios, there are plenty more investment opportunities sprinkled throughout the state. Over 137.4 million people visited the Sunshine State in 2022, the highest number in state history, and these visitors added $40 billion to the state economy.
There's a high rental demand for Airbnb properties and other short-term rental options. In addition, many who visit never want to leave and may, therefore, look for affordable apartment buildings in which to live out their sunshine dreams.
Florida Real Estate Market Overview
Despite the high demand for short-term and long-term residential units, Florida actually has low average home values, making it a profitable location for real estate investment. The median sale price is currently about $404,100, which is up 3% over the last year; this is slightly below the national average of $407,100. Compare Florida real estate to California's median sale price of $843,340, and you can see why so many investors consider this one of the best places to purchase investment properties. Florida's a relatively fast-moving market, with homes going to pending in 22 days. This is part of the reason that investors rely on specialized investment property loans, which have a much faster closing process than conventional loans. Real Estate Investments in Florida
An investor interested in the Florida housing market has several different types of investment properties to choose from, which are separated into two categories: short-term rentals, such as vacation rentals, and long-term rentals, such as single-family homes and multifamily homes. Thankfully, this state is great for both of them, as we'll explore now.
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The Florida vacation rental market is booming. The National Association of Realtors recently published its list of the top 10 best places to buy a vacation home, and three Florida cities were represented — Okaloosa Island, Navarre, and Palm Coast.
On the long-term rental side, Attom, a real estate data company, identified five different Florida counties as having some of the highest rental yields in the country.
Visio Lending strives to deliver the fastest, simplest and most dependable mortgage financing to enable investors to grow their real estate portfolios, improve cash flow and build wealth.
With so many excellent options across the state, it can be difficult to pick which city is right for your investment property. While the entire Florida market is excellent, some places are better for investors looking for long-term rental property, while others are perfect for vacation investments.
These are the best cities for long-term investment property as they all satisfy the key metrics — strong rental growth, increasing population, and excellent job markets.
Orlando is very well-priced for first-time investors, with the median listing home price being $399,000, up 1% over the last year. Average rental income is $1,940. Orlando is one of the most competitive rental markets in the nation, which is part of the reason that over 72% of tenants renew their leases.
Located on Tampa Bay along Florida's Gulf Coast, a home in Tampa is a real steal at just $391,344. Rental income is comparable to Orlando at $1,920 a month, making it well-producing but affordable. The city is listed as the 24th best place to live in the country, mostly due to the strong job market.
Jacksonville is a more low-key city, with home values of $293,086.Prices are down 2.7% year-over-year, making this a great time to buy. The average rent is $1,537, but vacancy rates are lower than Orlando or Tampa at just 6.6%.
Airbnb properties and vacation homes promise an excellent cash flow in Florida, and investors should take a particularly close look at properties in these particular areas, known for being vacation hotspots.
Kissimmee is just south of Orlando, making it a very popular place to stay for those visiting Walt Disney or SeaWorld. Properties cost just $373,138 but can make up to $24,900 per year, with a great occupancy rate of 39%. You can charge an average of $238 a night.
Exotic Key West is in the Florida Keys, making it a great place to get away from it all. Property is some of the most expensive in the state at $1,074,327, but vacation rents are enormous, too. With a Key West short-term investment property, you can expect an annual revenue of $53,600 with a nightly rate of $394 and occupancy rates hitting 44%.
On the Gulf Coast, Clearwater Beach is beloved by visitors interested in a relaxing spa day. Real estate is pricey here, too, with average prices of $841,198, but it also has a very high annual revenue of $31,600 and a stunning occupancy rate of 47%. The average nightly payment is $235.
Visio Lending is the leading private lender to Florida residential real estate investors.
Visio Lending is the nation's premier lender for buy and hold investors offering, long-term loans for SFR rental properties, including vacation rentals.
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