Florida is the third-largest state in the US and the biggest state in the southeast. It also has the fourth-highest GDP in the country.
It boasts a booming tourism industry, and other thriving sectors like healthcare, international banking, aerospace, and the military.
These stats make it a great place for investing, thanks to a lot of demand for real estate in Florida. Owning properties here is a worthwhile investment.
But, you need to understand how the market here works so that you can invest wisely and profitably. This article will show you a few tips that will help you do this effectively.
Determine Your Investment Goal
It’s not enough to have the cash or financing for investment. You also need to figure out what your goals are. This will help make sure your investment in real estate in Florida works out well.
Are you buying and holding? If yes, for how long? Do you just want to flip and fix? Are you interested in building from scratch?
These are questions you need to answer before dabbling at all. Cities in Florida can be quite profitable for real estate investment. The same goes for its rural areas. But, your investment goals and strategies will ultimately determine if you will profit from it or not.
Whether you’re interested in rentals, fix and flip or build to sell, the truth is it is always best to figure it out first before dabbling.
Choose the Best Location
In real estate investing, location is everything. It is the difference between making and losing money. So, look at cities with a decent-sized population in Florida. These are Miami, Tampa, West Palm Beach, and Jacksonville.
Wherever there’s a solid population, you will often find real estate investing success. The good news is that there’s a consistent demand for single-family homes in Florida. These homes are more preferable because of their relative affordability.
Consider investing in northwest Florida for quieter homes. The people who like the cities prefer being away from the tourist crowd.
If you prefer cities like Miami, Fort Lauderdale, and Palm Beach, the properties are going to cost you. But, a smart way to still invest in these cities is to move away from where the ultra-rich live.
You’ll find 3-bed single-family homes with a pool for $250k-$300k even in cities like Miami and Palm Beach.
However, because of the cost of owning a home, most people can only afford to live as tenants and renters. This is probably why the cost of renting an apartment or home in the state is considerably higher.
Look for Neighborhoods with Affordable Properties
The Florida real estate market boasts of many affordable properties. But, you’ll have to look properly before buying. As a result, downtown areas and the heart’s city tend to have more expensive properties because there’s a huge demand for them.
If you’re on a budget, what we recommend is look at suburbs and maybe semi-rural areas in parts of the state. Some folks are making a killing catering to the residential demand of these places.
Tampa for instance still has a lot of affordable properties that you can buy and give out to renters for between $1400 and $1600 monthly. The official average is over $1800
Home buying isn’t really huge in this city because the bulk of employers are in the healthcare and social assistance sectors. This is not necessarily a bad thing.
It just implies that the bulk of residents may not be able to afford a home in the short term. The median price for homes in Tampa is around $313,000. Single-family homes and condos average at $240,000.
If you can afford these properties, just buy and hold, while you wait for appreciation. And that’s likely to happen, given Tampa’s population growth potential.
Understand That Rent Is More Commonplace
As earlier stated, Floridians are largely renters. Homeowners aren’t as many. This is in part because of the economy, the population, the fact that it’s a tourist-friendly state, and cost of living.
Miami, for instance, is an expensive city to live in. In fact, a family of four would need to earn about $85,000 a year to be comfortable.
Compared to cities like Naples, Jacksonville, Tampa, and Pensacola, that’s quite expensive. So, when you’re thinking of investing in real estate in Florida, consider the specific cities.
You’ll probably be better off building rentals or buying homes and turning them into rental properties. And then charge higher during the summer and spring break, to cover relatively low patronage during the fall and winter.
This even as the cost of houses and properties in the state have remained considerably lower, compared to similar states in the country.
If you’ll be looking to invest for the sake of selling, consider building or buying to rent for now. Then wait a few years before selling. If you want the best locations, consider Tampa, Miami, Palm Beach, Fort Lauderdale, and Orlando.
Of course, because the demand for accommodation is consistent, just have a 3-5 year holding plan. You can always sell after that.
Baby Boomers Love the State
The majority of homeowners in the state are baby boomers who just want a nice, warm, friendly state to retire in. The appeal of the beaches, perpetual sunshine, and natural beauty are why they love the state.
Most of them are retirees who just want to spend their retirement in peace. Of course, there are young professionals who also call the state home. But still, consider the retirees and senior citizens when you’re investing in real estate in Florida.
So, your properties should have the necessary amenities, as well as ambiance to attract this demography.
Investing in Real Estate in Florida
At the end of the day, investing in real estate in Florida can be quite profitable if done right. The value of real estate in Florida is bound to continually appreciate, so you’ll be in profit for a long time.