Do you want to invest in real estate in Florida? If YES, here are 10 best cities in Florida with lots of opportunities to buy investment rental property.
Real estate is no doubt one of the businesses that any investor that intends expanding his investment should consider. Good enough, Florida happens to be one of the choicest destinations when it comes to buying investment rental properties.
One of the major reasons why an investor should consider investing in properties in Florida is the fact that the economy ranks among the largest in the world. As of 2018, the gross state product (GSP) is about $1.0 trillion, the fourth largest economy in the united states. Florida is responsible for 5.0 percent of the United States’ $20.9 trillion gross domestic product (GDP). As of 2018, Florida’s nominal GDP is larger than all but 15 countries.
You can hardly get it wrong when you buy rental property in Florida due to the fact that Florida boasts of fairly low housing prices, and loads of people in the state prefer to rent a property as against buying. Hence it is normal for rental rates to be on the increase.
Studies recently released by Forbes earlier this year, shows that Florida has the largest number of investment-friendly cities among other 49 states. Four out of 10 best cities for housing investment in 2019 are actually the cities in the Sunshine State.
Having said that, in no particular order, here are the ten best cities in Florida that you can buy an investment rental property.
10 Best Cities in Florida to Buy Investment Rental Property
- Orlando, Florida
Orlando is one of the best places to buy rental property in the state of Florida from available data released in 2019. Orlando is a city that is located in Florida’s “sun belt” region, the area is known for its warm climate, beautiful beaches, world famous amusement parks, entertainment, and attractions.
With a growing population of over 2.5 million residents, the Orlando real estate market is driven by job applicants, baby boomer retirees, and students who want to live in a “cheap and cheerful” area that offers quality living at reasonable cost.
Statistics show that rents grew by 2.49 percent in the last 12 months, which is 17 percent higher than the national levels and Metro Orlando is the 4th largest metro area in the country, and it’s also the 16th fastest growing metro in the nation. In Orlando, it is still possible to purchase fully renovated 3-bedroom properties in good neighborhoods for as little as $156,117.
When it comes to employment and population growth, Orlando comes top and the most common employment sectors for those who live in Orlando are accommodation and food service (12.3 percent) This includes workers of Orlando’s world-class resorts like Disney World and Universal Studios.
The second most common sector is healthcare and social assistance (11.9 percent), followed by retail trade (11 percent). Important Statistics for Orlando Investment Rental Property Market that should serve as a guide to potential investors;
- Median list price – All Homes: $285,000
- Median list price – Condo: $140,000
- Rent list price: $1,600
- Median rent: $1,478
- Population: 2.5 M
- 1-year job growth rate: 4.3 percent
- 5-year population growth: 14 percent
- 6-Year Equity Growth Rate: 66 percent
- 7-Year Population Growth: 17 percent
- Unemployment Rate: 2.9 percent
- Average 30-year fixed mortgage rate: 4.40 percent
- Tampa, Florida
Tampa is yet another booming destination to invest in rental properties in Florida. It is also a popular tourism city. It’s a popular option for retirees as well, providing for many short-term rental opportunities. Located on the west coast of Florida, Tampa Bay is a densely populated metropolitan area (second only to Miami), with a population of more than 3 million people.
Major cities in this area include St. Petersburg, Largo, Clearwater, New Port Richey, Holiday and Tampa. An area with mostly high-priced homes, Tampa still has pockets where investors can find homes at affordable prices, even as low as $120,000 and turn around to rent them for $1,075 a month to $1,400 a month, above the national average.
Tampa’s economic projections really improves the city’s appeal to rental property owners. The local economy is worth over $130 billion and the metro area has been ranked as one of the top 20 fastest growing in the country. Tampa also has a strong local economy with a strong focus on job growth in areas such as financial services and healthcare.
Tampa’s year-over-year employment growth beat the U.S. average. According to Bureau of Labor Statistics data, U.S. nonfarm employment increased approximately 1.6 percent from 2017 to 2018, while Tampa managed a 2.3 percent increase.
Despite the fact that Tampa home prices have risen in recent years, the city still has plenty of neighborhoods and locations where investors can find investment rental properties at affordable prices, and rent them out for $1,405 to $1,527 a month on average.
Important Statistics for Tampa Investment Rental Property Market that should serve as a guide to potential investors;
- Median list price – All Homes: $312,995
- Median list price – Condo: $239,900
- Rent list price: $1,527
- Median rent: $1,405
- Metro Population: 3.1 M
- 1-year job growth rate: 2.3 percent
- 5-year population growth: 12 percent
- 6-Year Equity Growth Rate: 61 percent
- 7-Year Population Growth: 10.85 percent
- Unemployment Rate: 3.4 percent
- Average 30-year fixed mortgage rate: 4.40 percent
Jacksonville is one of the leading cities when it comes to investing in rental properties in Florida because available statistics shows that Jacksonville’s average rental yield is among the highest in the U.S. In Jacksonville, the median home price is about $171,000, which is 15 percent less than the national average. A typical 3 bedroom home can rent for 15 percent more than the national average.
Other interesting stats that should guide an investor is the fact that Jacksonville city’s 2.6 percent increase is better than the national year-over-year average of 0.5 percent. Specific markets within the Jacksonville metro area, such as Butler Beach, are displaying rent growth rates in excess of 10 percent.
Aside from job availability in the city, the population in Jacksonville has grown about 8 percent from 2013 to 2018, and 24 percent since the year 2000. Plus, the median home price is $210,000 in Jacksonville, which is 33 percent cheaper than the national average, $278,900.
The Jacksonville metro also has a world-class health care system, with more than 20 hospitals and a growing bioscience community. Important Statistics for Jacksonville Investment Rental Property Market that should serve as a guide to potential investors;
- Median list price – All Homes: $210,000
- Median list price – Condo: $134,950
- Rent list price: $1,250
- Median rent: $1,345
- Metro Population: 1.5 M
- 1-year job growth rate: 3.2 percent
- 5-year population growth: 8 percent
- 6-Year Equity Growth Rate: 42 percent
- 7-Year Population Growth: 11.55 percent
- Unemployment Rate: 3.4 percent
- Average 30-year fixed mortgage rate: 4.40 percent
- Fort Lauderdale, Florida
Fort Lauderdale is yet another booming market for rental properties in Florida. For decades, the Fort Lauderdale metro area experienced rapid growth, which attracted families from all over the southern United States. The average rental price of properties in the city is $2,122 / month and the median home value for the city is $318,141.
Despite the fact that the rental price in Fort Lauderdale is one of the highest among Florida cities, median home value seems to be the average. Going forward, rental property prices in the city are expected to increase steadily in the next few years, which means now might be the very right moment for your property investment.
Fort Lauderdale also offers great opportunities for investors today. This is especially true for those who are looking for an affordable investment, strong monthly cash flow, and a good chance for equity growth.
- West Palm Beach, Florida
West Palm Beach real estate investment markets can boast of having three factors in common for attracting investors and they are job growth, population growth and affordability. The average rental price for West Palm Beach is $2,569 / month and the median home value is $250,784.
If you are interested in investing in rental properties along beaches, then you should consider heading to West Palm Beach. West Palm Beach is commonly referred to as one of the best beach cities for rental property investment. The local market is dynamic and characterized by a variety of housing options from highly-priced homes facing the ocean and relatively affordable ones deeper to the west.
Reasonable prices and exceptional location are two things making West Palm Beach such a hot market for real estate investing. Investing in West Palm Beach real estate is a wise cash flow and appreciation investment strategy. Rents are commonly above 1 percent of purchase price.
- Cape Coral, Florida
Cape Coral is one of the top 50 markets in the country for the coveted millennial renter. An appreciable percentage of current tenants are millennials because of close proximity to employment, retail and recreation hubs. The average rental price for the city is put at $1,404 / month and the median home value is put at $215,201.
A key factor that attracts investors to Cape Coral is the exceptional affordability of local properties in the city. As matter of fact, in Cape Coral, one can find a relatively new and nice home priced under $100,000, although the majority of properties on the market cost slightly more. Another factor that attracts investors to Cape Coral, is the fact that the city is good for vacation rentals especially for international tourists.
Another positive factor for investors is that renters make a good return of the market, which is slated to only increase as young educated millennials continue to migrate to Cape Coral for its affordable housing market. Investing in Cape Coral real estate market is a wise cash flow and appreciation investment strategy. Rents are commonly above 1 percent of purchase price.
- Doral, Florida
Doral is yet another city in Florida that attracts investors who are interested in investing in rental properties and good enough, the city is just 15 miles inland from Miami. The average rental price for Doral is $1,937 / month and the median home value for the city is $422,970. The economy of the city is driven by tourism, logistics, finance and trade because the city is close to Miami’s seaport.
Due to a healthy growth in the job market, a constantly growing population, and low unemployment rates, this north-central city attracts the attention of potential investors especially real estate market. The value of homes in Doral, Florida, is higher than in most of the cities statewide, and it is projected to grow in the years to come giving room for increase in returns for investment rental properties.
- Key West
Another thriving market for rental properties in Florida is Key West. Key West is popular among real estate investors because of its stable economy, growing technology hub, large metro population, and most especially, its affordable housing market.
The city is one of the most popular tourist destinations not only in Florida but also across the United States hence the attraction for real estate investors. The truth is that, real estate investors can expect high occupancy rates, a high rental income, and positive cash flow from renting out their vacation homes for the short – term. Important Statistics for Key West Rental Property Market that should serve as a guide to potential investors;
- Median Property Price: $937,028
- Price Per Sq / Ft: $723
- Airbnb Rental Income: $8,675
- Occupancy Rate: 75 percent
- Airbnb Cap Rate: 7 percent
Gainesville is yet another booming market for rental properties in Florida. For decades, the Gainesville metro area experienced rapid growth, which attracted families from all over the southern United States as well as the Midwest. It also offers great opportunities for investors today. This is especially true for those who are looking for an affordable investment, strong monthly cash flow, and a good chance for equity growth.
Gainesville is one of the liveliest college towns in the Sunshine State. The student population in Gainesville makes the city lively and also the city is known for its major cultural attractions, museums, and exhibits. While there’s a buzzing nightlife that vacationers enjoy, the area is also known for its serene, natural beauty, and opportunities to spot wildlife.
Real estate investors renting out a house on Airbnb in Gainesville enjoy high occupancy rates and the opportunity to host for different types of short-term guests. Another positive factor for investors is that renters make a good return on the market, which is slated to only increase as young educated millennials continue to migrate to Gainesville for its affordable housing market.
Important Statistics for Gainesville Investment Rental Property Market that should serve as a guide to potential investors;
- Median Property Price: $263,213
- Price Per Sq / Ft: $140
- Airbnb Rental Income: $2,444
- Occupancy Rate: 46 percent
- Airbnb Cap Rate: 5 percent
As stated earlier in this article, most of the best real estate investment markets have three factors in common: job growth, population growth and affordability. Clearwater is no exception. Clearwater is popular among real estate investors because of its stable economy, growing technology hub, large metro population, and most especially, its affordable housing market.
As one of the key cities of Tampa Bay, Clearwater allows for easy access to city amenities while enjoying a coastal community. Clearwater is home to some of the highest ranked beaches in the US and, thus, has a high demand for vacation rentals and a profitable environment.
Investing in Clearwater real estate market is a wise cash flow and appreciation investment strategy. Important Statistics for Clearwater Investment Rental Property Market that should serve as a guide to potential investors;
- Median Property Price: $362,803
- Price Per Sq / Ft: $203
- Airbnb Rental Income: $2,562
- Occupancy Rate: 55 percent
- Airbnb Cap Rate: 4 percent
The cities listed above have their own advantages and disadvantages that can impact on your return on investment which is why it is important to conduct your due diligence before investing in rental property in Florida.