The Florida housing market is one of the best places to invest in real estate in 2020. In fact, four major Florida rental markets are among the PwC’s top 25 markets for overall real estate prospects:
- Orlando real estate market
- Tampa-St. Petersburg real estate market
- Miami real estate market
- Jacksonville real estate market
There are, however, other profitable markets in the Sunshine State. One of the most underrated of these is the Hollywood Florida real estate market. In this blog, we’ll focus on why you should invest in Hollywood Florida real estate. We’ll also show you where to invest in this Southern Florida market, according to Mashvisor’s real estate data.
Related: 5 Best Cities in the Southern Florida Real Estate Market
Why You Should Invest in Hollywood Florida Real Estate
So, should you consider buying Hollywood real estate in 2020? There is a variety of positive economic, demographic, and social trends that explain why the answer is yes. Let’s dive into the 5 most important Hollywood real estate trends:
1. Traditional and Airbnb Hollywood rental properties are lucrative
We wouldn’t recommend investing in Hollywood Florida real estate if it wasn’t profitable. Hollywood rental properties are actually great money-making machines. Both traditional and Airbnb Hollywood rental properties fit this role nicely. Mashvisor’s profitability data for the average income property in Hollywood proves this:
- Traditional Rental Income: $2,308
- Traditional Cap Rate / Cash on Cash Return: 1.2%
- Monthly Airbnb Rental Income: $2,780
- Airbnb Cap Rate / Cash on Cash Return: 1.4%
- Airbnb Occupancy Rate: 54%
While it is clear that investing in Airbnb Hollywood is the more profitable choice, you can’t go wrong with either rental strategy. As a result, either a traditional or Airbnb real estate investor can earn a profit in the Hollywood housing market in 2020.
2. Hollywood house prices are average for the Florida real estate market
Profit is a must-have for real estate. However, it isn’t the only important feature that rental properties should have. Reasonable house prices are another key aspect of property investing. Once again, Hollywood Florida real estate delivers on this front. According to Mashvisor, the median price of a Hollywood investment property is $447,072. Hollywood’s median property price is obviously not the cheapest around. For instance, it is considerably higher than the national median of $245,193. It is, however, in-line with the Florida median. According to Mashvisor, the median property price in the Florida housing market is $443,483. With relatively affordable prices, Hollywood rental properties will be accessible to Florida real estate investors in 2020.
Related: Invest in the 5 Cheapest Housing Markets in 2020
3. Properties in the Hollywood housing market will undergo high appreciation
In real estate, house prices are never static. An increase in value over time, or appreciation, raises the value and price of a property. A high real estate appreciation rate, therefore, is a benefit for a property owner.
Appreciation is not a new trend in the Hollywood Florida real estate market. In the last decade, properties in the Hollywood real estate market appreciated by 76.95%. With an annual average of 5.87%, Hollywood was in the top 10% for national appreciation. This trend has persisted for many years. For instance, Hollywood house prices increased by 2.4% in 2019. The projected rate for 2020 is expected to surpass the previous year’s rate. According to Zillow, Hollywood prices will increase by 3.7% this year.
4. Hollywood, FL will be a cool buyer’s market in 2020
One might believe that a high appreciation rate puts buyers at a disadvantage. After all, an increase in property prices means a more expensive purchase. However, that is not necessarily the case with Hollywood Florida real estate. According to Zillow, Hollywood, FL will be a cool buyer’s market in 2020.
So, how is Hollywood a buyer’s market despite rising property prices? Simply put, a market’s status as a buyer’s or seller’s market depends on many factors. Mortgage rates and housing inventory, for instance, play a huge role. With these factors in mind, Hollywood is a conducive market for buyers. The same cannot be said for the Florida and US housing market, however, both of which are hot seller’s markets.
Related: Will the 2020 US Housing Market Be a Seller’s Market or a Buyer’s Market?
5. Airbnb Hollywood will remain legal in 2020
Buying property in Florida for Airbnb is a great real estate investment strategy. However, Airbnb regulations vary across the state. So, what is the status of Hollywood Airbnb laws? Fortunately, Airbnb Hollywood Florida real estate rentals are legal. Most importantly, a non-owner occupied property can be used as an Airbnb rental. Hollywood vacation rentals can operate in RS and RM zones. These properties also require a Vacation Rental License. The license comes with an application and application fees, which differ based on the property type. Finally, hosts must pay two taxes. These include a 6% State Transient Rental Tax and a 6% Broward County Tourist Development Tax.
Best Neighborhoods in Hollywood: Traditional Rental Strategy
You now know why you should invest in Hollywood Florida real estate. Naturally, another question arises. Where can you buy Hollywood homes for sale? The answer differs whether we are discussing traditional or Airbnb real estate in Hollywood Florida. For the former, the following neighborhoods are the best, according to Mashvisor:
- Median Property Price: $371,931
- Price per Square Foot: $183
- Price-to-Rent Ratio: 12
- Traditional Rental Income: $2,522
- Traditional Cap Rate / Cash on Cash Return: 3.3%
- Median Property Price: $304,614
- Price per Square Foot: $215
- Price-to-Rent Ratio: 13
- Traditional Rental Income: $1,991
- Traditional Cap Rate / Cash on Cash Return: 2.8%
- Median Property Price: $287,297
- Price per Square Foot: $202
- Price-to-Rent Ratio: 13
- Traditional Rental Income: $1,888
- Traditional Cap Rate / Cash on Cash Return: 2.6%
Best Neighborhoods in Hollywood: Airbnb Rental Strategy
What about an Airbnb Hollywood real estate investment? For Airbnb real estate listings, Mashvisor lists these neighborhoods as the best of the best:
Lake Emerald Hills
- Median Property Price: $535,380
- Price per Square Foot: $187
- Price-to-Rent Ratio: 16
- Monthly Airbnb Rental Income: $4,336
- Airbnb Cap Rate / Cash on Cash Return: 7.7%
- Airbnb Occupancy Rate: 52.1%
- Median Property Price: $262,433
- Price per Square Foot: $173
- Price-to-Rent Ratio: 15
- Monthly Airbnb Rental Income: $3,125
- Airbnb Cap Rate / Cash on Cash Return: 4.9%
- Airbnb Occupancy Rate: 53.4%
- Median Property Price: $247,238
- Price per Square Foot: $189
- Price-to-Rent Ratio: 14
- Monthly Airbnb Rental Income: $2,924
- Airbnb Cap Rate / Cash on Cash Return: 4.9%
- Airbnb Occupancy Rate: 64.0%
Start your search for a Hollywood investment property for sale in the neighborhood of your choice.
All in all, Hollywood is one of Florida’s best rental markets. It’s profitability, appreciation, reasonable house prices, and lenient Airbnb regulations make it a top housing market in the Sunshine State.
Want to find Hollywood Florida real estate for sale? Whether you’re looking for condos or SFRs, we got you covered! CLICK HERE to start your FREE trial with Mashvisor!