It goes without saying that the Florida real estate market is one of the hottest and most rewarded in the nation. There are various cities in the state, each with its own unique market that makes it a great location for buying an investment property. Some of the most popular cities in Florida for investors are Jacksonville, Orlando, Miami, and Tampa. But, there’s a hidden gem located 17 miles south of Orlando that you should consider investing in – Kissimmee. Keep reading find out what the deal with the Kissimmee real estate market is and why you should buy an investment property here in 2020.
Kissimmee House Prices
Just like the entire area of Central Florida, Kissimmee is a desirable investment location thanks to the affordable house prices. According to Mashvisor’s property data, the median price for Kissimmee homes for sale right now is $265,055 and the median price per square foot is $155. This is below the national average and significantly below Florida’s median price of $464,078. Moreover, Redfin data shows that Kissimmee house prices in 2020 went up by 9.5% since last year and the price per square foot went up 5.5%.
In addition to the affordability of the Kissimmee housing market, Kissimmee real estate investors also benefit from the overall affordable cost of living here. Kissimmee’s cost of living is 22.6% lower than Miami’s, 7.1% lower than Orlando’s, 6.3% lower than Tampa’s, and 6.4% lower than Jacksonville’s. Many families choose to live in Kissimmee as an alternative to Orlando due to this affordability, making it a great real estate market for buying and renting out single-family homes or multi-family properties.
To start looking for and analyzing the best Kissimmee investment properties for sale, click here.
Kissimmee Real Estate Appreciation
The fact that Kissimmee house prices went up from last year tells us that the city has a strong real estate appreciation rate. NeighborhoodScout data support this. Data shows that Kissimmee, FL real estate appreciated 107.98% over the last 10 years (an average annual home appreciation rate of 7.60%). This puts Kissimmee in the top 10% for real estate appreciation across the nation. Relative to Florida, Kissimmee’s annual appreciation rate is higher than 80% of the other cities and towns in the state.
Looking at just the last 12 months, the Kissimmee real estate appreciation rate remains to be one of the highest in America, at 8.32%. This is higher than appreciation rates in 87.22% of cities and towns in the US housing market 2020. This tells property investors that they can find good long-term investment opportunities in Kissimmee. So if you’re looking for a location with a track record of having a strong appreciation over the last ten years, make sure to check out the Kissimmee, Florida real estate market in 2020.
Related: 5 Best Cities for Real Estate Appreciation in 2020
Florida Mortgage Interest Rates
One of the best benefits for investors in the US housing market today is that mortgage rates are at an all-time low in 2020. When it comes to buying real estate in Kissimmee FL, you’ll be happy to learn that Florida ranks in the 10 states with the lowest mortgage rates across the nation! Data shows that the 30-year fixed mortgage rate in Florida is 3.48% and the 15-year fixed mortgage rate is 2.82%.
Low rates combined with the affordability of houses for sale in Kissimmee Florida mean investors can stretch their budgets. You also have the chance to find great Kissimmee real estate deals for reasonable prices. Financing a Kissimmee investment property with a mortgage that comes with a lower interest rate will result in a shorter repayment period, lower monthly costs and expenses, as well as an overall higher rate of return!
Check this list of States with the Highest and Lowest Mortgage Rates in 2020.
Florida Landlord/Tenant Laws
Another benefit you’ll enjoy if you invest in Kissimmee real estate is the favorable environment for landlords and owners of rental properties. Florida is one of the few landlord-friendly states in 2020. For starters, Florida law bans rent control and has no restrictions on late fees. Furthermore, there is no limit on how much you can charge for a security deposit, but it must be returned within 15 – 60 days after the tenant moves out. Landlords also have the right to deduct from security deposits to cover the costs of repairing excessive damage caused to the rental property (beyond normal wear and tear).
When it comes to evicting a tenant for not paying rent, landlords provide written notice with only a 3-day grace period before landlords can file for eviction. To evict a tenant for causing intentional damage to the investment property or for constantly violating the lease, landlords need to give an “Unconditional Quit Notice”. This gives the tenant 7 days to move out before proceeding with the eviction in court. In some cases, you also have the right to continue the eviction process even if the tenant submits partial rent payments.
Besides the landlord-friendly laws, owning a long-term rental property in Kissimmee also makes good rental income. According to Mashvisor’s real estate data and predictive analytics, Kissimmee real estate investors can expect $1,588 of traditional rental income per month. If you know how to manage your expenses, this rental income can cover the costs of owning the property and leave extra money that goes to your pocket (positive cash flow).
Airbnb Kissimmee Real Estate Investments
Wondering whether you should buy a Kissimmee rental property to rent out traditionally or as a short-term rental on Airbnb? According to Mashvisor’s data, Airbnb is actually the optimal rental strategy in the Kissimmee real estate market 2020. Our Airbnb data shows that rental property in Kissimmee will generate an Airbnb rental income of $2,824, have an average daily rate of $146, an Airbnb occupancy rate of 72.5%, and cash on cash return of 4.2%. Of course, these are just city-level data. You can find Kissimmee Florida homes for sale with higher profitability.
Related: The 7 Best Places to Buy a Vacation Home in Florida
A question to ask before buying an Airbnb investment, however, is: is Airbnb legal in Kissimmee? Fortunately, the answer is yes – but it’s not that simple. There are some Airbnb regulations that real estate investors must know before investing in Airbnb Kissimmee. Generally, vacation rentals are only allowed in what’s called the STRO (short-term rental overlay district). If your property is not in an area zoned for short-term residential use, you must apply for and obtain a conditional use permit.
Moreover, one of the most important Airbnb laws in Kissimmee, FL is that operators of short-term rental properties must apply for and obtain a business tax receipt. Airbnb Kissimmee hosts need to collect and pay Florida’s general sales and use tax of 6%, Osceola County’s Tourist Development Tax of 6%, as well as Osceola County’s Discretionary Sales Surtax of 1.5% on the listing price and cleaning fee for rentals of 182 nights or less. Regardless of these regulations, investors will enjoy a good Airbnb return on investment in Kissimmee as it’s a popular tourist destination year-round.
The Bottom Line
As you can see, the Kissimmee real estate market makes for a good location for buying investment properties whether to rent out traditionally or on Airbnb. So if you’re still unsure where you want to invest in real estate in 2020, Kissimmee should definitely be on your list of places to consider. If you’re ready to start searching for and analyzing Kissimmee real estate for sale, make sure to use our online search tools. Mashvisor offers a Real Estate Heatmap that’ll help you identify the best neighborhoods in Kissimmee and a Rental Property Calculator to analyze the profitability of any property you find and get the data you need to make wise investment decisions.
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