Florida is considered one of the top destinations around the United States. Its touristic scene and climate are a primary cause for its high ranking in the US real estate market. This is causing many Americans and foreign investors alike to invest in Florida real estate properties. The climate, the economy, the population, and the affordability make it one of the best places to buy an investment property for an affordable price. To invest in Florida real estate, the real estate investor must have a specific idea about the best cities that generate profit for investors in the state. The aim when investing in Florida real estate is to buy rental properties that can start accumulating profits as soon as possible.
Rental properties are considered the most profitable form of investment in the Florida real estate market. To invest in Florida rental properties means that the property buyer must be prepared for the high demand of dealing with a rental property. The rental strategies that are being utilized in Florida include both long-term rentals (traditional rentals) and short-term rentals like Airbnb or HomeStay. Rental properties find success in Florida because of the large tourism influx every year, with the climate and economy of the state making all of that possible.
Where to Invest in Florida for Rental Properties?
There are different areas or cities in Florida where investing in rental properties can generate profits easily. The best places to invest in Florida must take into consideration the return on investment when calculating average property prices and rental income per year. The best places to invest in Florida can be shortlisted to the cities of Orlando and Tampa.
Related: The 7 Best Places to Buy a Vacation Home in Florida
Orlando Rental Properties
There are two reasons why Orlando is one of the best places to invest in Florida. The city satisfies the two important segments of the rental real estate industry.
When it comes to tourism and short-term visitors, the city is an attractive destination due to the fact that it has 5 out of the 10 most visited theme parks around the world. This makes short-term rentals like Airbnb a very demanded option that can generate higher profits during the high seasons in Orlando. The average Airbnb rental income is between $1,500 and $2,000, depending on the neighborhood the investment property is situated in.
On the other hand, Orlando’s traditional rental market has shown more growth in recent years due to its booming economic situation. This is why now is the perfect time to invest in Florida real estate. Major cities like Orlando are growing, which results in more jobs and more people moving into the city. This means that traditional long-term rentals are higher in demand than ever before. This growth in population will not only increase the profits for real estate investors not only through long-term renting but also through real estate appreciation because values of investment properties are on the rise due to the higher demand.
These are another two benefits of investing in Orlando real estate. Orlando real estate investors received an impressive 14.9% in overall returns in the past year. This high return on investment percentage was due to above average rental prices in the city, again – something real estate investors take advantage of. Orlando also has relatively low home prices compared to the national level. The average home price in the city is a little over $200,000, while the national average for the past year has hovered around $350,000.
The higher rental incomes coupled with the affordable values of rental properties has made Orlando one of the top places to invest in Florida. Using Mashvisor’s interactive property search, you can find the best-valued properties and how much profit you can make off of them.
Related: Investing in Orlando Real Estate: The Real Deal
Tampa Rental Properties
The second hottest place to invest in Florida is the Tampa area. Tampa is expected to be on the best real estate markets list for the year 2017. There are many factors that are making this prediction a reality, with low property prices, high population growth, more jobs, and high rental income all being a part of that.
As is the case with Orlando, short-term rental platforms in Tampa are witnessing unparalleled success in the last few years. This is all due to the high tourism rate that is flowing down the state, making it more lucrative for people to invest in Florida. When it comes to Airbnb rentals, the average rental income is ranging between $2,000 and 3,000, depending on the neighborhood, with South Seminole Heights being the most profitable area. While Miami is still the most visited city by tourists in the State of Florida, Tampa is becoming a better choice for tourists who are looking to avoid the hassle and expenses of bigger cities like Miami.
In terms of traditional rentals, the causes of their rise are almost identical to those in Orlando. With the population growth and increased jobs becoming a statewide economic development, it is not hard to see why Tampa’s traditional rental market will witness a sudden rise. Rental properties are a great way to make money in Tampa because there is a swift increase in the population every year. An increasing number of people are moving there in order to work in the new jobs that have refreshed the city’s economy. This ultimately leads to more leverage for real estate investors and better profits in general. The increased profits are obvious in the short term through rental profit or long term through real estate appreciation (buy and hold strategy). The future of Tampa’s real estate is rising making more people vying for the opportunity to invest in Florida.
Related: Here Are the Top 10 Real Estate Markets for 2017
Conclusion
The rise of Orlando and Tampa in the world of real estate investing has elevated the housing market in Florida in general. As a result, real estate investors face more options and new opportunities to invest in Florida. If you are looking for an affordable real estate investing opportunity that can generate profit and has limited risk, then it is time to invest in Florida for your first real estate property. Use Mashvisor’s interactive rental property calculator in order to get the best results and predictive data analysis for your future investment property. The Florida real estate boom is here, so don’t miss out on it.