The Florida housing market is home to dozens of profitable rental investment markets. In fact, some of them have even been named the best places to invest in real estate in 2020 like the Orlando real estate market and the Tampa real estate market. However, there are many other smaller markets in Florida worth checking out. Today, we’ll focus on one such market: the Clearwater real estate market.
So, should you invest in Clearwater real estate in 2020? We’ll help you answer this question by taking an in-depth look at:
- Clearwater housing market data
- Clearwater real estate trends
Read our Airbnb Clearwater 2022 analysis here.
Clearwater Real Estate Market: Mashvisor’s Investment Data
Is an income property in Clearwater FL any good? Will it make you any money? The best way to find out is through the city’s real estate data. Where can you obtain access to such data? Look no further! With Mashvisor’s real estate investment tools, you can analyze any rental market in the US! Check out Mashvisor’s data for Clearwater below:
- Median Property Price: $416,493
- Price per Square Foot: $236
- Price-to-Rent Ratio: 20
- Traditional Rental Income: $1,778
- Traditional Cap Rate / Cash on Cash Return: 1.9%
- Airbnb Rental Income: $2,914
- Airbnb Cap Rate / Cash on Cash Return: 3.9%
- Airbnb Occupancy Rate: 54%
CLICK HERE to learn more about Mashvisor’s investment tools!
Clearwater Real Estate Market Forecast for 2020
What are the trends of the Clearwater real estate market 2020? And do they make it a good place to invest in real estate this year? Let’s take a look at 5 of the most important trends of the 2020 forecast.
Clearwater Florida real estate rentals will be profitable in 2020
Let’s take a step back and look at the real estate data above as it is key to our first trend: profitable rental properties. Fortunately, for Clearwater landlords, the housing market is very lucrative. According to Mashvisor’s data, Clearwater’s average traditional rental income is $1,778. Its average Airbnb rental income is $2,914. For comparison, it’s important to note that Clearwater real estate investing stands out in the state of Florida:
- Clearwater’s traditional return on investment (ROI) is twice that of Florida.
- The average Airbnb Clearwater ROI is 1.56% higher than Florida’s average.
With such high ROI figures, the Clearwater Florida real estate market will be profitable in 2020.
Clearwater real estate will experience a high appreciation rate
Clearwater Florida real estate is also profitable in another sense: appreciation or the increase of property value over time. The market’s appreciation rate will be high in 2020. Zillow projects an appreciation rate of 3.9%
Clearwater’s high appreciation is nothing new. According to NeighborhoodScout, Clearwater house prices increased by 62.9% in the last 10 years. This placed the market in the top 10% nationwide. In 2019, Clearwater properties appreciated by 3.1%. This was well above the national average. So looking at historical trends, Clearwater real estate will continue to appreciate in 2020 and beyond.
The city’s strong economy will bolster its real estate market
Clearwater Florida real estate benefits from a strong local economy. For starters, the city’s unemployment rate is relatively low (3.2%). This is significantly less than the US average of 3.9%. Clearwater is also experiencing economic growth. Over the last year, the city’s job market increased by 2.3%. Once again, this was better than the US average of 1.6%. There is also projected long-term growth in Clearwater. In the next 10 years, the job market is expected to grow by 41%. These economic trends will increase the demand for traditional Clearwater rental properties in 2020 as more people are attracted to the city.
Airbnb regulations in the Clearwater real estate market will remain very strict
In theory, Clearwater Florida real estate would be perfect for Airbnb. The presence of Clearwater Beach and the Florida sun should generate high tourist buzz and plenty of Airbnb income for investors. However, this is unfortunately not true and the reason lies in the strict Airbnb regulations.
Clearwater short-term rentals are permissible in the city’s Tourist District. Rental properties in residential neighborhoods, however, face severe restrictions. For starters, they cannot be rented on a daily or weekly basis. Instead, such properties can only be rented on a monthly basis. In addition, Airbnb hosts must possess a City Business Tax Receipt. They must also pay a 6% County Tourist Development Tax. Violators have been hit with heavy fines as of late. First-time offenders will receive a $3,000 lien. A repeat violation lien may reach $31,500.
Even with non-owner occupied rentals being allowed, Airbnb Clearwater is very restrictive. There have been recent calls for the City Council to alter these laws. However, there is no expected development for 2020. Investors in Clearwater real estate should keep an eye out for any change.
Clearwater rental properties will be in high demand in 2020
We touched on the demand for Clearwater rental properties earlier. Due to its economic success, long-term tenants will increase in the market. However, there are other factors contributing to the market’s high appeal. For example, Clearwater is the 2nd best city to retire in the country. As a result, rental demand is very high in Clearwater. This is evident with 42% of its residents renting out a Clearwater investment property.
With such a high demand for rental properties, however, comes more investors looking to buy. This is definitely the case with Clearwater houses for sale. According to Zillow, Clearwater is a very hot seller’s market in 2020.
So, Should You Invest in Clearwater Real Estate in 2020?
As long as you wish to buy a rental property and rent it out traditionally, then yes, Clearwater real estate for sale is a good choice. Even though it’s a seller’s market, a Clearwater real estate investment will be a wise one for 2020 and beyond as you can still find a good deal here on a profitable rental property. According to Redfin, although Clearwater real estate for sale receives two offers on average, it tends to sell for 3% below list price.
Best Neighborhoods in Clearwater for Real Estate Investing
So, where should you buy Clearwater houses for sale? According to Mashvisor, these are the best neighborhoods in the city:
Seville Condo No. 11
- Median Property Price: $119,400
- Price per Square Foot: $106
- Price-to-Rent Ratio: 9
- Traditional Rental Income: $1,138
- Traditional Cap Rate / Cash on Cash Return: 4.3%
Alcove Homeowners Association Inc
- Median Property Price: $167,481
- Price per Square Foot: $154
- Price-to-Rent Ratio: 10
- Traditional Rental Income: $1,417
- Traditional Cap Rate / Cash on Cash Return: 4.1%
Sunshine Tower Apartment HOA
- Median Property Price: $143,820
- Price per Square Foot: $156
- Price-to-Rent Ratio: 11
- Traditional Rental Income: $1,058
- Traditional Cap Rate / Cash on Cash Return: 3.8%
Seville Condominium No. 7 Association
- Median Property Price: $74,900
- Price per Square Foot: $97
- Price-to-Rent Ratio: 7
- Traditional Rental Income: $887
- Traditional Cap Rate / Cash on Cash Return: 3.7%
Morningside-Meadows Homeowners Association
- Median Property Price: $246,280
- Price per Square Foot: $146
- Price-to-Rent Ratio: 12
- Traditional Rental Income: $1,680
- Traditional Cap Rate / Cash on Cash Return: 3.0%
The Bottom Line
The Clearwater real estate market is an underrated market in the Sunshine State. With its excellent long-term growth, it’s a must-invest location for 2020. To start searching for Clearwater houses for sale, CLICK HERE to start your 14-Day FREE trial with Mashvisor! Not only can you find an investment property, but with our rental property calculator, you will be able to analyze any selected rental property!