2019 is expected to be a strong year for the Florida real estate market. Known as the Sunshine State and renowned for its beaches and beautiful ocean views, Florida has quite a lot to offer for property investors. Across the state, a perfect combination of demand, economic growth, and other factors make buying rental property in Florida a great investment. In this blog post, we’ll break down these factors and present data for the best cities to buy investment properties in the Florida housing market 2019.
Florida in the PwC’s Emerging Trends Report
The PwC’s Emerging Trends in Real Estate® report is a highly regarded market forecast, highlighted by its list of “Markets to Watch” for real estate investing in the US. The Florida housing market is a noteworthy story in this year’s report. To begin with, the report presents various factors contributing to the positive outlook for a Florida real estate investment. These include demographic growth, a friendly business climate, and an attractive cost structure.
In addition, numerous Florida cities ranked high in the list of markets to watch in 2019. Orlando made it in the top five, Tampa Bay/St. Petersburg in the top ten, and Miami and Fort Lauderdale in the top 20. The report claims that these cities “have fully rebounded from the disruption caused by the global financial crisis.” These should be your top picks for buying rental property in Florida.
Related: 2019 Will See These 3 Cities in the Florida Housing Market on Top
Strong Economy and Job Growth
As every real estate investor knows, economic trends in each state of the US can have a great impact on its housing market. When it comes to Florida, its strong economy is a major factor for attracting property investors. According to USNews, Florida’s economy has topped $1 trillion last year and there’s still room for more growth!
In addition, Florida has a favorable unemployment rate in the state. As of June 2018, the Sunshine State had an unemployment rate of 3.8%, lower than the national rate of 4%. This means that there are more people employed in Florida than other states in the US. Furthermore, the employment growth rate in 2019 is projected to be well above the national rate in numerous cities in Florida, according to the Emerging Trends Report.
This strong economy and employment growth directly translate to an equally strong housing market. So, for a real estate investor, there’s no reason to believe there’s a downside to buying rental property in Florida this year. Use our Property Finder to find lucrative investment properties in any Florida city that match your criteria in a matter of minutes!
Growing Population + Demand for Rentals
Florida is the 3rd most populous (after California and Texas) and the 8th most densely populated state in the US. For numerous reasons, Florida is one of the best states to live in and it welcomes new residents every day. As a matter of fact, the 2019 population growth rate is, once again, projected to be well above the national rate. Moreover, the Emerging Trends in Real Estate Report named seven housing markets in Florida that are expecting population growth rates at least 85% higher than the national average!
Florida is a popular destination for young professionals, college students, and retiring baby boomers. This population growth is increasing the demand for housing and rentals of all types at different price points in the Florida real estate market 2019. However, one trend experts see is the increasing demand for rental properties, especially multi-family homes. This is because rising interest rates have pushed up the monthly costs of owning a home. As a result, more residents are opting to rent the houses they live in. This is another reason why buying rental property in Florida is a smart investment in 2019!
To learn more about the trends affecting the real estate market, read our blog post: US Housing Market Predictions: What’s to Come in 2019.
Increasing Property and Rental Prices
A good indicator for real estate investors buying rental property in Florida is price trends for investment properties. Since a higher number of people are moving to the Florida housing market, property investors can expect prices to become higher as well.
According to Zillow, the median property value in Florida is now $230,000, which is an 8.1% increase over the past year and Zillow predicts it will rise by 5.0% in 2019. So, if you own an investment property in Florida, your property should appreciate in value over the coming years.
The rising property prices and mortgage interest rates make it tougher to own a home and, thus, push up the rental demand. In effect, vacancy rates of rental properties are falling across the state once again. This is further keeping rent growth on an upward trajectory in Florida where, according to Zillow, the median rent price is $1,800 – higher than the national median rent price of $1,637. This shows you that rental properties in Florida can generate high rental income, positive cash flow, and yield a good return on investment.
Furthermore, Zillow’s data shows that the median price of homes currently listed in Florida is $292,500 but the median price of properties that sold is $220,300. Savvy property investors see this as a sign of a buyers’ market – sellers cut down their listing prices and buyers can score great deals at lower prices. So if you’re thinking of buying rental property in Florida, now is a good time to start looking for properties for sale!
Ready to start searching for investment properties in Florida to make money in real estate? Start out your 14-day free trial with Mashvisor now and use our tools to find lucrative properties in your city of choice!
A Choice of Rental Strategy
After buying an investment property, a real estate investor has to decide on the best rental strategy that will yield a high return on investment. Should you rent out your Florida investment property traditionally or as a vacation rental on Airbnb? As an investor, you’ll be happy to learn that BOTH strategies have great potentials. Our aforementioned trends all point to the fact that the Florida real estate market is one of the best places to consider for investing in long-term single-family and multi-family homes.
In addition, based on data from Mashvisor’s Investment Property Calculator, Florida is home to some of the best cities to buy vacation rentals! This doesn’t come as a surprise seeing that tourism is the backbone of its economy and the Sunshine State is a top destination for travelers in the US and worldwide. So, buying rental property in Florida to rent out on Airbnb is a great rental strategy for real estate investors in 2019.
Related: Real Estate Investing: Traditional vs. Airbnb Investments
Where Should You Invest in Florida Real Estate 2019?
Keep in mind that a real estate market analysis is a must to find which cities are best to invest in traditional rentals and which are best for an Airbnb rental investment. Because there are plenty of good markets in Florida to choose from, we’ve analyzed our real estate data to provide you with the best cities to consider for each rental strategy. To learn more about our product and investment tools, click here.
Buying Rental Property in Florida to Rent Out Traditionally
Key West
- Median Property Price: $973,004
- Price Per Sq/Ft: $716
- Monthly Rental Income: $5,765
- Price-to-Rent Ratio: 14
- Traditional Cash on Cash Return: 5%
Bradenton
- Median Property Price: $282,771
- Price Per Sq/Ft: $162
- Monthly Rental Income: $1,731
- Price-to-Rent Ratio: 14
- Traditional Cash on Cash Return: 3%
Venice
- Median Property Price: $348,798
- Price Per Sq/Ft: $199
- Monthly Rental Income: $2,037
- Price-to-Rent Ratio: 14
- Traditional Cash on Cash Return: 3%
Buying Rental Property in Florida to Rent Out on Airbnb
Key West
- Median Property Price: $973,004
- Price Per Sq/Ft: $716
- Monthly Rental Income: $8,710
- Airbnb Occupancy Rate: 71%
- Airbnb Cash on Cash Return: 7%
Bradenton
- Median Property Price: $282,771
- Price Per Sq/Ft: $162
- Monthly Rental Income: $2,162
- Airbnb Occupancy Rate: 51%
- Airbnb Cash on Cash Return: 4%
Lakeland
- Median Property Price: $246,430
- Price Per Sq/Ft: $122
- Monthly Rental Income: $1,957
- Airbnb Occupancy Rate: 48%
- Airbnb Cash on Cash Return: 3%
Orlando
- Median Property Price: $317,030
- Price Per Sq/Ft: $172
- Monthly Rental Income: $2,178
- Airbnb Occupancy Rate: 55%
- Airbnb Cash on Cash Return: 3%
Clearwater
- Median Property Price: $357,557
- Price Per Sq/Ft: $209
- Monthly Rental Income: $2,437
- Airbnb Occupancy Rate: 55%
- Airbnb Cash on Cash Return: 3%
Whether you want to invest in an exciting city like Orlando or a quiet getaway like Key West, the Florida housing market has you covered. With the many benefits that come with buying rental property in Florida, it’s no wonder why so many real estate investors consider it one of the top markets for 2019. To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
