Here’s one word to describe Tampa real estate during the last several years: hot! The Big Guava’s real estate has been among the top for many years. Forbes and Trulia named it among the best real estate markets to watch for in 2017. Forbes also listed it among the best places to invest in housing. Also, GoBankingRates ranked Tampa as the second in the best cities to own an investment property. Not bad, Tampa, not bad at all.
Here’s what you need to know about traditional Tampa real estate, Airbnb in Tampa, and the five best neighborhoods in the city to invest in.
Traditional Tampa Real Estate
Tampa is among the top ten cities in the world for residential real estate. Here’s why.
Jobs, Jobs, and Jobs
According to WalletHub, Tampa is the third best city to find a job. Much of these jobs are in construction. This has been a trend for a while now. In fact, the city’s mayor said that over $2.4 billion worth of building permits were issued in 2015. And this trend seems to continue, as two new districts, the Heights and Vinik-Cascade, are under construction.
Construction isn’t all Tampa has to offer in terms of jobs. Education jobs are also common, as the University of South Florida and the University of Tampa are located nearby. You could also decide to rent to college students in the city.
Related: The Guide to Renting to College Students
Other sources of jobs in Tampa come from insurance, health care, finance, tourism, air and sea shipping, and national defense. The city’s employment status keeps Tampa alive and well, which boosts Tampa real estate opportunities.
Population Growth
Tampa’s real estate success is due, in large part, to the growing population there. As just mentioned, the plenty job opportunities cause many to relocate there. Those on the other end of the job spectrum are also interested in Tampa. Many retirees move to the cities of warmer states (like Florida). What makes Tampa, and Florida overall, a popular retiree destination is that there is no state income tax there.
Related: 4 Different Ways of Renting Out Your Property
Low Property Prices…For Now
Tampa’s home prices are cheaper than the national average, as you’ll see in the neighborhood list in this blog. The main reason why the city has had many cheap properties is that there has been a huge number of foreclosed homes. This situation won’t last forever, as you’d expect, and prices have been rising as of late. You know what that means, go buy properties now, before the prices increase!
High Returns
Like those in a fellow Floridian city, Tampa real estate investors enjoy high returns. To be exact, the fifth highest returns in 2016, at 17.62%. You’ll note these high returns and cap rates, for both traditional and Airbnb, in this blog. The cap rates and cash on cash returns represent averages, an actual property will likely be higher in these respects.
Related: Best Places to Invest in Real Estate: 7 Cities with Highest Returns
Top 5 Neighborhoods for Tampa Real Estate
1. Historic Ybor
- Median Price: $179,500
- Average Monthly Rental Income:
– Traditional: $1,381
– Airbnb: $2,105 - Cash-on-Cash Return:
– Traditional: 5.72%
– Airbnb: 11.44% - Cap Rate:
– Traditional: 10.21%
– Airbnb: 16.29% - Airbnb Occupancy Rate: 54%
2. South Seminole Heights
- Median Price: $335,000
- Average Monthly Rental Income:
– Traditional: $1,341
– Airbnb: $3,478 - Cash-on-Cash Return:
– Traditional: 1.96%
– Airbnb: 10.28% - Cap Rate:
– Traditional: 5.38%
– Airbnb: 14.23% - Airbnb Occupancy Rate: 49%
3. North Hyde Park:
- Median Price: $179,900
- Average Monthly Rental Income:
– Traditional: $2,300
– Airbnb: $2,252 - Cash-on-Cash Return:
– Traditional: 9.01%
– Airbnb: 9.27% - Cap Rate:
– Traditional: 13.32%
– Airbnb: 13.6% - Airbnb Occupancy Rate: 55%
4. Seminole Heights
- Median Price: $272,500
- Average Monthly Rental Income:
– Traditional: $1,220
– Airbnb: $1,915 - Cash-on-Cash Return:
– Traditional: 2.63%
– Airbnb: 6.04% - Cap Rate:
– Traditional: 6.37%
– Airbnb: 10% - Airbnb Occupancy Rate: 53%
5. Courier City
- Median Price: $309,400
- Average Monthly Rental Income:
– Traditional: $2,087
– Airbnb: $2,361 - Cash-on-Cash Return:
– Traditional: 3.5%
– Airbnb: 5.25% - Cap Rate:
– Traditional: 6.89%
– Airbnb: 8.75% - Airbnb Occupancy Rate: 33.6%
Airbnb Tampa Real Estate
Airbnb is becoming the new choice in vacation rentals in Tampa. And according to Airbnb itself, Tampa is among America’s nicest and most hospitable cities. Over 1.5 million people visited Florida in 2016 through Airbnb, many visiting Tampa. And as you have seen in the list of top neighborhoods above, Airbnb is a pretty profitable way of investing in Tampa real estate.
You’ll never be short of visiting tourists in Tampa. From fans of the multiple sports clubs in the city, the animal lovers visiting zoos and aquariums, and those simply looking to chill on the various beaches, your Airbnb tenant pool will be tremendous.
Related: Why invest in an Airbnb investment property over a traditional?
Not too long ago, Airbnb and the city of Tampa agreed on a tax deal. Airbnb hosts are required to pay sales and rental taxes. There are no particular legal issues with Airbnb Tampa real estate. Still, you want to avoid a common issue many cities in Florida have with Airbnb: zoning laws. Certain neighborhoods are not allowed to have Airbnb listings operating in them. The penalty is usually in the form of a hefty fine. Be sure to check your neighborhood’s zoning status and be aware of any legal implications you may face by running an Airbnb rental.
In summary . . .
Tampa real estate has long been among the best in the business. With a growing city, relatively cheap home prices, and popular tourist destinations, you’ll be in for a hot investment, whether it’s traditional or through Airbnb.
Tampa isn’t the only city with lucrative real estate opportunity. For many other U.S. cities, analyzed and updated frequently by Mashvisor, click here. Once you’ve selected a city, be sure to analyze and find properties using Mashvisor’s investment property calculator. You’ll learn everything you need to know about the property, from cash on cash return to rental strategy. For everything on real estate, visit us at Mashvisor.
