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Florida real estate investing guide

One of the fastest-growing states in the country, with low unemployment and strong property values, Florida’s housing market is poised for growth.

Overview of Florida

While California and New York shed residents, people are flocking to Florida for its good weather and growing economy. The state is one of the fastest-growing in the country, taking on roughly 250,000 new residents per year and adding new jobs at an annual rate of 5%.

Whether you’re looking for a multiplex in a major metro area,
a vacation rental property by the beach, or an income property you can also live in, you’ll find a profitable investment in Florida.

Quick Stats:
21.8 M
Total Population
$57.7 K
Median Household Income
2.5%
Unemployment rate
0.02%
Crime Rate

Real Estate Statistics

$406,876
Median Home Price
  • 13.8% below National Average
  • +25.0% Growth Rate YoY
$1348
Median Monthly Rent
$1,937
Average Property Tax (0.89%)
  • % Rent vs Own
  • Growth
  • % Vacant (vacancy rate)
25.15
Acquisition Price-to-Rent Ratio
6.5%
Rental Vacancy Rate
5.1%
Yearly Job Growth

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Investing in Florida

A guide to real estate investing in Florida

Florida is booming. With one of the fastest-growing populations in the country and an excellent jobs outlook, the Sunshine State is a popular spot to invest.

If you’re thinking about investing in rental property in Florida, this guide will show you why you’re looking in the
right place.

Benefits of Investing in Florida

Florida has a strong outlook for population growth and jobs growth, and it needs housing to keep up with demand. While the population is growing by an estimated 250,000 per year, U.S. Census Bureau data shows new housing starts are barely topping 130,000. The surging demand is putting upward pressure on home prices and rents, and creating lots of opportunities for developers and investors alike.
The benefits of investing in Florida real estate include:

A growing population

Florida is one of the fastest-growing states in the country. The population is growing by roughly 250,000 per year with no sign of slowing down. Research from the University of Florida projects the state will surpass 24-million residents by the year 2030 and top 26-million by 2040.


Leading the nation in net migration, Florida attracts more than 30,000 people each from the states of New York, Georgia, Pennsylvania and Ohio every year.


Florida is also attractive to immigrants from other countries. Roughly 4-million Floridians are foreign-born, the majority of whom come from Latin America.


Benefits for Real Estate Investors: As the population grows, so too does the demand for housing. Booming demand is already putting upward pressure on property values and rents, which bodes well for your return on investment.

Plenty of jobs

Florida’s employment outlook is almost as sunny as its beaches. While the labor shortage isn’t unique to Florida, its seasonally-adjusted unemployment rate of 2.5% is the lowest of the 10 most populous states and a full percentage point below the national average.

The state is projected to add 858,000 jobs by the year 2030 with hospitality, trades, education and health services leading the demand. The cities of Jacksonville, Orlando and Tampa are all expected to experience employment growth of 9% or more over the coming decade.

Benefits for Real Estate Investors: Employment growth is a sign of a healthy economy and a leading indicator for real estate demand.

No state income tax

While California and New York have some of the highest state income tax rates in the country, Florida has no personal income tax at the state level.


Florida’s tax climate is competitive for businesses, as well. The state’s corporate tax rate of 5.5% is among the lowest of the most populous states. And the state sales tax rate of 6% is right around the national average.


Benefits for Real Estate Investors: Low tax rates are good for businesses, which contribute to the local economy. They also attract residents and free up a larger portion of their paychecks to spend on things like rent.

Multiple major transportation hubs

As the gateway to Latin America, Florida is well positioned for logistics and accessibility. The state boasts 15 deepwater ports, including the country’s closest to the Panama Canal. Orlando and Miami are two of the busiest airports by passenger volume, and the interstate highway system keeps all of the state’s largest hubs within a 6-hour drive of each other.

Oh, and in case you ever need them, Florida has not one, but two spaceports connecting Planet Earth with wherever else you might want to go.

Benefits for Real Estate Investors: Shipping and logistics are vital for trade, keeping jobs local and property values high. And if you plan to live elsewhere while investing in Florida, you’ll be able to get in and out easily when you need to.

Rapidly rising rents

A recent study of rental trends found that 10 of Florida’s markets have seen prices rise at least 13% higher than expected based on past trends. The average rent in Miami-Fort Lauderdale has climbed to $2,846. And in the west coast city of Fort Myers, rents are up 32.38% year-over-year.

A co-author of the study points to a shortage of housing inventory as a major contributing factor, saying “we cannot build them fast enough” to meet demand.

Benefits for Real Estate Investors: Even if the trend turns out to be short-lived, rents could take years to normalize. In the meantime, investors will pocket the difference.

Low vacancy rates

The average rental vacancy rate in Florida is just 6.5%, meaning the average rental property is vacant for just 24 days per year.


Benefits for Real Estate Investors: Vacancy rates are inversely proportional with demand for rental housing. A low vacancy rate means you’ll have fewer vacancies, find new tenants faster, and be able to charge higher rent than in an area with a higher vacancy rate.

State Comparison

Real Estate Investing in Florida vs Ohio or Indiana

Florida, Ohio, and Indiana real estate markets all have attractive investment opportunities. If you’re deciding between Florida and comparable states, like Indiana and Ohio, we have some stats that can help you decide. creating lots of opportunities for developers and investors alike.

Freatures FloridaOhioIndiana
General
Total Popultion21,781,12829,527,94110,799,566
One Year Population Growth (%)+1.1%+1.3%+0.8%
One Year Job Growth (%)+5.1%+5.6%+5.0%
Median household income$59,734$67,404$61,497
Unemployment rate (%)2.50%4.0%2.80%
Crime Rate (combined crimes)0.02%0.02%0.03%
Tenant Occupied rate (%)31.0%34.0%34.0%
Real Estate
Median Single Family Home Value ($)$221,019$211,374$591,189
Above/below National Average (%)-51.65%-49.77%+141.10%
Growth rate YoY (%)14.62%13.53%18.20%
Median Monthly Gross Rent ($)$1,100$1,300$2,250
Above/below National Average (%)-3.79%-10.34%55.17%
Property Tax Rate (avg %)0.85%1.56%0.51%
Vacancy (avg %)8.7%4.6%3.4%
Acquisition price-to-rent ratio (Median home price/ median monthly gross rent)16.713.521.9
Landlord friendliness (out of 100)657067.5

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Top Cities in Florida to invest in Real Estate

Miami

The Miami-Fort Lauderdale-West Palm Beach metropolitan area is the largest in the state and attracts residents and tourists from around the world. Miami, in particular, has the strongest property values and rent prices of any major market in the state.

Tampa

Tampa is a big city with a small town feel. It consistently outperforms other parts of Florida in quality of life rankings and U.S. News ranks it the 6th-safest place to live in America.

Orlando

Orlando is known for theme parks and tourism, but the Orlando Economic Partnership says 80% of local jobs are outside of tourism and hospitality. Other major drivers for the area include Orlando International Airport, which directly employs over 25,000 people and supports almost 350,000 jobs according to the Florida Statewide Aviation Economic Impact Study.

Jacksonville

The state capital is an excellent choice for investors looking for a lower price point without compromising on potential.

Sarasota

Sarasota has been one of Florida’s biggest beneficiaries of the post-pandemic trend of young people moving to small- and medium-sized cities. According to Zumper, rents in Sarasota are up 12% year-over-year and have risen 47% since November 2020.

Resources

Network with Florida investors

Bigger Pockets: Florida Forum
FB: RE Investors
FB: Florida Multifamily Investors
FB: Florida RE Investors

Useful Links

Rental Data
Labor Statistics
Leases
State Taxes
Rental Property Insurance
Tenant Insurance
State Rental Laws

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Life in Florida

Florida has great weather, lots of diversity and a low cost of living. No matter where you are in Florida, you’re never far from a beach, golf course, or your new favorite restaurant.

Jobs are plentiful in Florida, and the state is projected to grow its workforce by close to a million over the next ten years. In addition to its venerable tourism industry, Florida’s growth will be driven by education and health services, financial activities, and information work.

Quality of Life

Florida is known for its quality of life and is renowned for its good weather and beautiful beaches. The website USA.com says Florida has the warmest average annual temperature out of the lower 48 states. And it would take the average person almost two full weeks to walk the state’s 825 miles of sandy beaches.

A study by WalletHub ranks Florida 5th for quality of life, factoring in quality of transportation, access to amenities, arts & culture, and physical fitness. The same study ranks Florida 5th for economy, 15th for safety, and 25th for education & health.

Residents also enjoy the absence of any state income tax. According to another WalletHub study, Florida has the 6th-lowest overall tax burden in the country.

Education


Florida has an excellent school system and according to Education Week, the state ranks above average in 15 of 18 K-12 achievement measures. Florida ranked 2nd for improving the high school graduation rate and 6th for proficiency in grade 4 math.


For higher education, Florida is home to three of the country’s best schools: University of Miami, University of Florida, and Florida State University. U.S. News ranks Florida first in the country for higher education, accounting for attainment, graduation rates, tuition costs and student debt.

Sports & Culture

Few places in the world have more to offer than Florida when it comes to professional sports. The state boasts three NFL teams, as well as two teams each in the NBA, MLB and NHL. And for baseball fans, Florida is the home of spring training’s “Grapefruit League” playing host to juggernauts including the Yankees, Red Sox, Phillies and Astros.


College sports fans are spoiled for choice in Florida as well. The state’s best-known college team, the Florida Gators, have won three national football titles and two basketball championships. According to FloridaSmart.com, the state has 13 division one colleges offering a full suite of sports.

And if you’re into golf, Florida hosts 5 PGA Tour events including the Players Championship or you can hit the links yourself at one of the state’s more than 1,250 courses.

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