Rental properties are a good investment in South Florida — and the reason is not far-fetched. The Sunshine State is a peculiar case when it comes to buying and owning rental properties.
Like other states in the country, demand for homes in Florida has consistently risen in the last few years. Despite this surge, residents are opting to live in rental properties instead of buying a home. As a result, rent rates are on the rise in the state.
However, the appeal of investing in Florida rental properties extends beyond high rent. According to a Forbes article, other equally compelling reasons to own rental property in the state are:
- Low property taxes and insurance
- Exceptional healthcare
- No state income tax
- Great climate
Indeed, the Sunshine State is one of the best states in the U.S. for rental property investment. However, if you’re still in doubt, consider these reasons why rental properties are a good investment in South Florida.
Hot Housing Market Make Rental Property A Good Investment
Florida has one of the hottest housing markets in the United States — and for good reasons. Besides its demographic growth, the state also boasts of a friendly business climate and a compelling cost structure.
There’s also the fact that several Florida cities are ranked high in the list of real estate markets to watch. For example, PwC’s Emerging Trends in Real Estate report ranked Orlando as one of the top five markets in the country. Similarly, cities such as Tampa Bay, Miami, and Fort Lauderdale made it into the top 20 emerging markets.
Excellent Location Makes For Good Investments
Another reason why rental properties are a good investment in Florida is their excellent location. There’s no denying that researching a potential investment property’s structure is essential. However, its location is just as crucial — maybe even more. And Florida happens to be an excellent place for rental property investment.
Besides its many resorts, several neighborhoods come with unique charms and advantages. Florida is also home to tourist destinations. These include:
- Disney World
- Kennedy Space Center
- Universal Studios
- SeaWorld Orlando
- Everglades National Park, among others.
Your strategy could involve investing in rental properties that are close to these destinations.
Growing Demand For Rental Properties In South Forida
With roughly 21.5 million residents, Florida is the third most populous state in the United States — behind California and Texas. This 14.5 percent growth from 18.8 million residents in 2010 isn’t surprising. The state has become a popular destination for college students, professionals, and retiring baby boomers.
But what exactly does this population surge mean for the state’s rental property market? One word — demand. Thanks to the rising mortgage interest rates, the monthly costs of owning a home have increased significantly.
Besides, the COVID-19 crisis has resulted in fewer buyers looking for homes and fewer sellers willing to list their properties. As a result, more Florida residents opt to rent the houses they live in. And that brings us to another point — high rent prices.
Rising Property and Rental Prices In South Florida
This is another excellent reason to invest in Florida rental properties.
Since more people are moving to Florida, property investors expect property prices to increase as well. According to Zillow, the median property value in the state has risen to $313,217 — a 20.1 percent increase over the last year. What’s more, real estate experts expect this number to grow in the coming years.
In other words, the value of your investment property should continue to appreciate.
Similarly, the rent prices in Florida have also been on an upward trajectory. According to Rent Data, the median rent price is $1,800 — relatively higher than the national median rent price of $1,637.
The bottom line is that rental properties in Florida can generate high rental income and positive cash flow. you’ll enjoy an excellent yield on your investment.
Multiple Rental Strategy Options Drive Good Investments
The real estate market in Florida offers various rental strategy options to investors. After buying an investment property, you can pick the rental strategy that willl yield a high return on investment.
For example, you could consider investing in long-term, single-family or multi-family homes. Another option is to rent out your Florida investment property as a vacation rental on Airbnb.
Strong Economy and Job Growth
Florida has a strong economy that property investors find attractive. With a GDP of over $1 trillion, the Sunshine State has the fourth-largest economy of any U.S. state and 16th largest globally. And there’s room for more growth!
Similarly, the unemployment rate in the state is lower than the national average. As of May 2021, Florida had an unemployment rate of 4.9 percent — significantly lower than the national rate of 5.2 percent. It means the state employs more people than other parts of the United States.
As every real estate investor knows, a state’s economic trend can have a significant impact on its housing market. In other words, there are no downsides to owning rental properties in Florida.
Wrapping Up: Buy an Investment Property in the Sunshine State
The reason to invest in Florida rental properties is simple. Besides its excellent location, Florida cities rank high on the list of real estate markets to watch. Also, the Sunshine State has one of the strongest economies in the United States and steady job growth.
Thanks to it’s stable economy, Florida’s population has increased steadily in the past decade. As a result, there’s a higher demand for rental properties, rising property costs, and growing rental prices.
Now you know why many investors find owning an investment property in Florida attractive. Get in touch with us to find out how we can help you own your dream property in South Florida. Contact us online or call 954-800-4433 and ask our experienced property managers about our FREE market analysis.
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