If you’re looking for the best real estate investment opportunities at the moment, you should check out the Tampa housing market forecast 2023.
Traditionally, Tampa has always been one of the top US markets for investing in both short and long term rental properties. But is this still the case in 2023? Is the Tampa real estate market worth it this year? Or should investors look elsewhere?
Table of Contents
- How Has the Tampa Housing Market Performed So Far in 2023?
- Tampa Housing Market Forecast 2023: 6 Trends
- Top 10 Tampa Housing Market Neighborhoods to Invest in 2023
- How to Find a Profitable Investment Property in Tampa
In this article, we’ll answer all the significant questions above, as well as all the other vital questions that real estate investors have regarding the Tampa housing market. We’ll start by checking out how Tampa has done so far in 2023. We’ll see where the city stands in the middle of the year, and then we’ll move on to the trends investors can expect for the rest of 2023.
To spare you from the anxiety, we’ll tell you right away that Tampa is once again a great location to invest in real estate this year. Thus, we’ll highlight the best Tampa areas for buying rental properties in 2023, and we’ll give you the specific steps you need to take in order to land the most profitable opportunities.
Let’s get started!
How Has the Tampa Housing Market Performed So Far in 2023?
Tampa is one of the best-performing markets throughout the US in 2023, with multiple profitable investment opportunities. Whether you are interested in buying long term or short term rentals for sale, Tampa can be a great choice as long as you invest carefully and smartly.
Since property investing is a number-driven business, let’s first look at the performance of the Tampa real estate market in terms of figures. The data below is provided by Mashvisor and reflects the current state of the Tampa market in mid-May 2023.
Tampa Real Estate Market Data 2023
- Median Property Price: $671,127
- Average Price per Square Foot: $590
- Days on Market: 121
- Number of Long Term Rental Listings: 2,515
- Monthly Long Term Rental Income: $2,770
- Long Term Rental Cash on Cash Return: 3.45%
- Long Term Rental Cap Rate: 3.51%
- Price to Rent Ratio: 20
- Number of Short Term Rental Listings: 3,730
- Monthly Short Term Rental Income: $2,699
- Short Term Rental Cash on Cash Return: 2.15%
- Short Term Rental Cap Rate: 2.18%
- Short Term Rental Daily Rate: $160
- Short Term Rental Occupancy Rate: 47%
- Walk Score: 46
What do these numbers mean for rental property investors?
Here are the four most important trends that investors should consider when evaluating the performance of the Tampa market so far in 2023:
Tampa Housing Market in Mid-2023: Home Prices
According to Mashvisor real estate data, the median Tampa home prices currently are $671,127. This is significantly higher than the US average of $339,048, as reported by Zillow. Actually, this is about double the national median property price. The relatively high demand and low inventory are causing real estate prices in Tampa to shoot up.
Nevertheless, the prices of Tampa residential properties are still considered affordable compared to other cities in the country. So, even beginner investors can enter the market, especially if their rental property searches focus on more affordable neighborhoods and listings for sale.
In terms of appreciation, Tampa is one of the fastest-appreciating markets in both Florida and the US. Since September 2022, home values have increased by 9.22%. This means that if you’re thinking of investing in the Tampa market, you should act fast before prices go even higher. This strong appreciation is an important indicator that you will be able to make money in the long term.
Tampa Housing Market in Mid-2023: Inventory
According to our data, there are around 1,800 available listings for sale in the Tampa real estate housing market as of May 2023. With the current population of 394,809 continuously growing at a steady pace of 1.26% annually, the number of available houses for sale may not be sufficient.
Overall, inventory in the Tampa housing market in 2023 has grown. U.S. News & World Report estimates the current inventory at 2.4 months. This is more than this time last year, as the number of available homes for sale is slowly growing. But this number is below the required minimum for a neutral, balanced market. So, Tampa remains a hot seller’s market throughout 2023.
Tampa aims to create around 10,000 homes at affordable prices by 2027, which could help ease the low inventory in the city. Until then, investors considering this market need to be ready to move fast as soon as they see a potentially profitable deal.
Tampa Housing Market in Mid-2023: Demand
While inventory remains low, demand is high, pushing property prices to continue to rise in 2023.
But where exactly is the demand coming from?
Many people from other states move to Florida because of the warm weather, favorable tax laws, and beautiful scenic views. Remote work trends also open opportunities for individuals to relocate to a better city without leaving their jobs. In addition to its pleasant weather, the state’s affordable housing also attracts out-of-state residents.
Another factor driving demand in the Tampa housing market in 2023 is investors. While Florida was majorly hit by the pandemic, now that this is over, investors are back, with increased interest in this hot market.
Tampa Housing Market in Mid-2023: ROI
The final Tampa housing market trend for 2023 that we should discuss is the profitability of real estate investments. Mashvisor data shows that both long term and short term rental properties enjoy a high ROI in Tampa whether we look at cash on cash return or cap rate. Long term rentals are particularly profitable, with an average return on investment above 3%.
Investors are used to thinking that a good cap rate should be between 8% and 12%, but this is at the property level. At the city level, rates around and above 3% are excellent. Our nationwide real estate market analysis shows that there aren’t many major US cities that offer this kind of return on investment at the moment.
Of course, to guarantee good ROI, you still need to choose the right Tampa neighborhood and locate a profitable property for sale. But the city averages reveal that Tampa is an excellent location to invest in rental properties in 2023.
Tampa Housing Market Forecast 2023: 6 Trends
As per the Tampa, Florida housing market predictions for 2023, the local residential market will remain hot. Experts believe home prices will continue to go up amid the rising demand. New inventories are not expected to catch up with demand from homeowners and investors any time soon. Rental activities will also see an increase.
What does all this mean for investors?
Let’s take a look at the six most important trends in the Tampa real estate market forecast 2023 and what they indicate for rental property investors:
1. Tampa Home Prices Will Remain Relatively High
One of the most significant trends in the US housing market in 2023 is the slowdown in previously skyrocketing residential real estate prices. However, this is not so much the case in Tampa. As we’ve shown above, property values in Tampa are well above the US average, with no intentions to slow down before the end of the year.
The Tampa housing market will remain one of the hottest real estate markets in the US in 2023 and beyond. With the thriving economy, growing job opportunities, and steady population growth, the demand for housing will continue to surge.
New residents needing a home will continue to arrive in Tampa. However, the current housing inventory in Tampa cannot keep up with the demand for residential properties from both homebuyers and investors. It means that as buyers will continue with their bidding wars, home appreciation rates in Tampa are growing faster than in most other cities.
According to ABC Action News, plans to build new homes are now in place, but the new homes will not be available in 2023 or any time soon. If all goes well, experts expect to see newly built homes added to Tampa’s for-sale inventory by 2027.
Meanwhile, new investors should not be discouraged from trying to benefit from the profitable opportunities in Tampa because of the property prices. There are still ways to buy a short term rental or a long term rental in Tampa, even with a limited budget. We’ll discuss those shortly.
2. The Tampa Housing Market Will Experience Strong Appreciation
Long term appreciation is one of the most critical factors in the decision of real estate investors. It allows them to make money in the long term as well, not only in the short term, via rental income.
Our Tampa housing market forecast for 2023 shows that appreciation will continue to be a positive indicator. Since September last year, Tampa home values have gone up by 9.22%, while the US average property price has dropped slightly.
Importantly, this is not a new trend in the Tampa housing market. According to NeighborhoodScout data, since 2000, residential property prices in Tampa have increased by 304.58%, resulting in an average annual appreciation rate of 6.27%. This exceeds both the Florida and the US average appreciation rates.
With the still low inventory and growing demand, Tampa real estate prices will continue their upward movement in 2023 and even beyond. What this means for real estate investors is that they can rely on stable investment opportunities in the Tampa market. Whether you go for buy and hold or rent out, you are guaranteed to make money in the long term.
3. Tampa Will Remain a Hot Seller’s Market
While the US housing market is leveling off and becoming more neutral, this cannot be said about Tampa. All the forces are at play to maintain the status of Tampa as a seller’s market where buyers still don’t have the upper hand.
The Tampa housing market forecast in 2023 is that the city will retain this condition. With 2.4 months of inventory, the supply of listings for sale cannot keep up with demand from investors and homebuyers. This increased interest is leading to climbing home prices.
From an investor’s point of view, this means one thing. They need to enter the market prepared and be ready to close a deal fast before another savvy investor snatches it from them.
4. The Tampa Real Estate Market Will Present Challenges to New Investors
Beginner real estate investors are tempted by the opportunities available in the Tampa housing market in 2023. However, they should know that getting a top-performing property will not be easy. There are three main challenges to tackle.
First, the status of Tampa as a seller’s market for the rest of 2023 is something that needs to be considered. Investors should be pre-approved for a mortgage loan and pair up with the best local real estate agent to be able to act quickly once they see good rental properties for sale. They need to be prepared to get into and win a bidding war in order to get the listing that they like.
Second, the Tampa sales price is high for new rental property investors, at least compared to the national average. At the same time, they are worth it for the opportunities the Tampa market presents, as demonstrated by the solid ROI long term and short term rental data.
Third, mortgage rates in the US will remain high in 2023. According to Freddie Mac, the interest rate on 15-year fixed-rate mortgages is 5.97% at the end of May 2023 and 6.57% for 30-year fixed-rate mortgages. While this is below the peak in November 2022, it is significantly above the level this time last year. Moreover, the expectation is that mortgage rates will stay high throughout 2023.
The combined effect of above-average property prices and high-interest rates on mortgages is that Tampa real estate investors should look for alternative financing methods. There are plenty of best loans for investment property beyond conventional mortgages. So, make sure to check them out and see whether you qualify if you’d like to invest in Tampa in 2023.
5. The Tampa Long Term Rental Market Will Continue to Thrive
Everything we’ve discussed so far leads to the conclusion that long term rentals will continue to be a great investment strategy in Tampa. It is an important part of the Tampa housing market forecast 2023 for real estate investors.
There are a number of factors that contribute to this trend. On the one hand, we have a continuously growing population as a result of the affordable cost of living and new job opportunities. These attract both US residents from other states and migrants. More population translates into more robust rental demand.
On the other hand, as our data shows, the price to rent ratio in the Tampa Bay housing market is high at 20, and it will not go down for the rest of 2023. This signifies that it makes more financial sense for people to rent rather than buy a home. It is further testified by the fact that 51.5% of the Tampa population are renters, less than the number of homeowners, as reported by NeighborhoodScout.
Yet another indicator to consider is the high city-level cash on cash return and cap rate for long term rentals. Furthermore, an average Tampa landlord can expect to make $2,770 per month, which is significantly more than what other top markets for real estate investments offer.
6. The Tampa Short Term Rental Market Will Continue to Grow
The last Tampa housing market trend for 2023 is the continuous growth of the vacation rental industry. In the first quarter of 2023, Florida experienced a record number of visitors, at 37.9 million, and a lot of them came to Tampa for everything that it has to offer. A few of the local attractions include the Florida Aquarium, Busch Gardens, ZooTampa at Lowry Park, and the historic Ybor City neighborhood.
With the official end of the Covid-19 pandemic declared by the WHO, tourism in Florida in general and in Tampa in specific is expected to accelerate further in the remaining 2023. This means better Airbnb daily rates and high Airbnb occupancy rates for short term rental investors.
Another positive indicator is the legislative environment in Tampa. In 2023, Tampa remains one of the cities with no Airbnb regulation restrictions to prevent a viable short term rental business. To learn more about the specific requirements, you can check out the Mashvisor short term rental regulations page.
Top 10 Tampa Housing Market Neighborhoods to Invest in 2023
Our Tampa housing market forecast for 2023 shows that this promises to be one of the best locations to buy a rental property this year, both for short term and long term benefits. However, not all Tampa neighborhoods offer the same opportunities for real estate investing.
Thus, we’ve looked at up-to-date Mashvisor data (from mid-May 2023) to rank the five best Tampa areas for each rental strategy. We’ve focused on markets with a sales price below $1,000,000 to ensure more affordability for beginner investors. We’ve also considered neighborhoods with established rental markets, as indicated by the number of active listings.
5 Best Tampa Neighborhoods for Long Term Rentals
The best Tampa neighborhoods for long term rental property investments are those close to basic amenities and public transportation. Places with several job opportunities are also ideal for investing in these rentals. It is because most of the working residents would love to stay somewhere near their job locations.
Here are the top five Tampa neighborhoods that are best for long term rentals, arranged from those with the highest to the lowest cash on cash return:
1. Northeast Macfarlane
- Median Property Price: $438,508
- Average Price per Square Foot: $282
- Days on Market: 121
- Number of Long Term Rental Listings: 25
- Monthly Long Term Rental Income: $3,103
- Long Term Rental Cash on Cash Return: 5.99%
- Long Term Rental Cap Rate: 6.07%
- Price to Rent Ratio: 12
- Walk Score: 82
2. Ybor City
- Median Property Price: $372,551
- Average Price per Square Foot: $260
- Days on Market: 115
- Number of Long Term Rental Listings: 26
- Monthly Long Term Rental Income: $2,335
- Long Term Rental Cash on Cash Return: 4.97%
- Long Term Rental Cap Rate: 5.05%
- Price to Rent Ratio: 13
- Walk Score: 59
3. Oakford Park
- Median Property Price: $602,417
- Average Price per Square Foot: $372
- Days on Market: 134
- Number of Long Term Rental Listings: 15
- Monthly Long Term Rental Income: $3,432
- Long Term Rental Cash on Cash Return: 4.06%
- Long Term Rental Cap Rate: 4.10%
- Price to Rent Ratio: 15
- Walk Score: 61
4. South Seminole Heights
- Median Property Price: $488,687
- Average Price per Square Foot: $474
- Days on Market: 125
- Number of Long Term Rental Listings: 30
- Monthly Long Term Rental Income: $2,536
- Long Term Rental Cash on Cash Return: 4.05%
- Long Term Rental Cap Rate: 4.10%
- Price to Rent Ratio: 16
- Walk Score: 71
5. Historic Ybor
- Median Property Price: $400,535
- Average Price per Square Foot: $324
- Days on Market: 64
- Number of Long Term Rental Listings: 46
- Monthly Long Term Rental Income: $2,164
- Long Term Rental Cash on Cash Return: 3.90%
- Long Term Rental Cap Rate: 3.97%
- Price to Rent Ratio: 15
- Walk Score: 83
5 Best Tampa Neighborhoods for Short Term Rentals
When choosing the best Tampa neighborhoods for vacation rentals, you should consider how strong the tourism industry is in the area. It’s best to find a location that is close to a variety of tourist attractions. Also, the neighborhood’s walkability, as well as the available access to public transportation, can significantly affect your profitability as a short term rental property investor.
Moreover, your local market selection should be guided by Airbnb laws and regulations. Tampa has specific zoning requirements where non-owner-occupied short term rentals are permitted only in certain areas.
Here are the top five Tampa neighborhoods for vacation rentals based on our Tampa housing market forecast 2023:
1. Ybor City
- Median Property Price: $372,551
- Average Price per Square Foot: $260
- Days on Market: 115
- Number of Short Term Rental Listings: 655
- Monthly Short Term Rental Income: $2,264
- Short Term Rental Cash on Cash Return: 3.17%
- Short Term Rental Cap Rate: 3.23%
- Short Term Rental Daily Rate: $152
- Short Term Rental Occupancy Rate: 45%
- Walk Score: 59
2. Wellswood
- Median Property Price: $456,961
- Average Price per Square Foot: $284
- Days on Market: 150
- Number of Short Term Rental Listings: 542
- Monthly Short Term Rental Income: $2,652
- Short Term Rental Cash on Cash Return: 2.97%
- Short Term Rental Cap Rate: 3.00%
- Short Term Rental Daily Rate: $143
- Short Term Rental Occupancy Rate: 54%
- Walk Score: 39
3. Northeast Macfarlane
- Median Property Price: $438,508
- Average Price per Square Foot: $282
- Days on Market: 121
- Number of Short Term Rental Listings: 655
- Monthly Short Term Rental Income: $2,378
- Short Term Rental Cash on Cash Return: 2.65%
- Short Term Rental Cap Rate: 2.68%
- Short Term Rental Daily Rate: $172
- Short Term Rental Occupancy Rate: 45%
- Walk Score: 82
4. Historic Ybor
- Median Property Price: $400,535
- Average Price per Square Foot: $324
- Days on Market: 64
- Number of Short Term Rental Listings: 560
- Monthly Short Term Rental Income: $2,166
- Short Term Rental Cash on Cash Return: 2.25%
- Short Term Rental Cap Rate: 2.29%
- Short Term Rental Daily Rate: $180
- Short Term Rental Occupancy Rate: 47%
- Walk Score: 83
5. Old West Tampa
- Median Property Price: $635,951
- Average Price per Square Foot: $361
- Days on Market: 123
- Number of Short Term Rental Listings: 762
- Monthly Short Term Rental Income: $2,508
- Short Term Rental Cash on Cash Return: 2.14%
- Short Term Rental Cap Rate: 2.17%
- Short Term Rental Daily Rate: $154
- Short Term Rental Occupancy Rate: 53%
- Walk Score: 47
How to Find a Profitable Investment Property in Tampa
Knowing that the Tampa housing market promises profitable opportunities for investors in 2023 – and beyond – is a great beginning. However, it is not enough to start making money from this fact.
After going through a detailed Tampa housing market forecast for 2023, we’ll show you how to take advantage of all the positive forces supporting rental property investments there.
Here are the four steps you need to follow to find the best long term and short term rentals for sale in Tampa:
Step 1: Conduct a Neighborhood Analysis
Real estate investing is highly localized. Wanting to invest in Tampa is not enough; you need to know where to buy a rental property to maximize results. A good starting point for beginner investors is the top neighborhoods highlighted above.
Once you identify an area that fits your preferred rental strategy, rental income expectations, and ROI requirements, you can use Mashvisor’s neighborhood analysis pages. These are available for every US neighborhood with active real estate listings, like those above. There you will find detailed information to help you confirm if this area is the best choice for your investment aspirations.
To start analyzing the potential of neighborhoods across the Tampa housing market, sign up for a 7-day free trial of Mashvisor.
Step 2: Perform Investment Property Search
The second step in the process of finding the best Tampa rental property investments is to actively look for listings for sale that match your criteria. There are many ways to do that, including reading newspapers, talking to other investors, driving for dollars, and hiring an agent. However, the most efficient way is to use the Mashvisor Property Finder.
This tool uses AI and machine learning algorithms to help you find properties that align perfectly with your needs. All you have to do is enter basic criteria like budget, rental strategy, property type, and property size. Immediately, you’ll be provided with a list of properties for sale that meet these requirements.
The best part is that they are ordered starting with the highest cash on cash return. So you’ll see the most profitable opportunities first without wasting time going through thousands of useless listings.
Step 3: Do a Rental Property Analysis
Next, you will have to analyze in detail the investment potential of your selected properties in the Tampa housing market. This is referred to as rental property analysis and is needed to ensure strong rental income, positive cash flow, and high ROI. Doing this the conventional way means collecting and calculating data for weeks or even months.
Alternatively, you can use the Mashvisor rental property calculator, which works with both long term and short term rental properties. You can use this Mashvisor tool right on the properties highlighted by the Property Finder. In this way, you will see what income, expenses, cash flow, occupancy, cash on cash return, and cap rate to expect from any US property in a matter of seconds.
The analysis is based on the performance of active rental comps, which means rental properties similar to the one you’re investigating. At the same time, the data comes from reliable sources like the MLS, Zillow, Redfin, Airbnb, and public records. All in all, the estimates provided by the Mashvisor investment property calculator can be trusted.
Step 4: Apply Dynamic Pricing (to Short Term Rentals)
This last step refers to managing your Tampa income property post-purchase and applies only to vacation rentals. To optimize the performance of your Tampa short term rental, you need to apply a dynamic Airbnb pricing policy. This means that your nightly pricing should be constantly adjusted to reflect changes in supply and demand.
Mashvisor has the most efficient tool on the market for this purpose. The Mashvisor Dynamic Pricing tool helps Tampa Airbnb hosts in two ways. First, it provides the most appropriate daily rates for each night when your property is available for booking. It is done in a way that maximizes rental income and returns on investment, not occupancy rate, as done by competitors.
Second, the tool allows you to automate your Airbnb pricing strategy. As soon as you connect your Airbnb listings to your Mashvisor account, you can have the Mashvisor tool take over the pricing management of your rentals.
Awareness of the Tampa housing market forecast 2023 is made better with Mashvisor’s Dynamic Pricing tool. It lets Airbnb investors and hosts set reasonable yet competitive nightly rates to optimize their Airbnb income.
Take Advantage of the Positive Tampa Real Estate Market Forecast 2023
In conclusion, Tampa promises to be an excellent location for real estate investing in the rest of 2023 as well as beyond this year. While investors might face some challenges related to bidding wars and financing, the Tampa housing market forecast for 2023 is highly optimistic for both rental strategies. It means that you should definitely consider adding a Tampa investment property to your portfolio.
If you’re not sure where to begin, the top local markets we’ve highlighted above are a great starting point. As long as you conduct your investment property search diligently, these neighborhoods are guaranteed to bring you top-performing short term or long term rentals.
The most crucial point is that you must use the best tools for real estate investors to make profitable decisions, whether you invest in the Tampa rental market or elsewhere. The Mashvisor platform has all the tools that you need at your disposal to look for and analyze both neighborhoods and properties for sale.
You can easily turn three months of real estate market research and analysis into 15 minutes on your computer or mobile.
To learn more about how Mashvisor can help you find the best rental property investments in Tampa, schedule a demo with our team of experts.