Tampa is a major city located on the West Coast of the state of Florida near the Gulf of Mexico on Tampa Bay. With a population of nearly 392,890 people, it is the largest city in the Tampa Bay Area and the third most populous city in Florida after Jacksonville and Miami. The Tampa Bay Area, also known as the Tampa-St. Petersburg-Clearwater Metropolitan Statistical Area, is a large metropolitan area encompassing Tampa City and the nearby cities of St. Petersburg and Clearwater, with over 3.1 million residents. This makes it the fourth largest metro area in the Southeastern U.S. after Miami, Washington, D.C., and Atlanta.
The Tampa real estate market benefits from the fact that Tampa is one of the fastest growing cities in the U.S. (as reported by Forbes), with a population growth rate well above the national growth rate. This growth is especially due to the strong annual net migration over the past five years. Additionally, more than half of the population (53% according to NeighborhoodScout) are renters rather than homeowners, meaning that Tampa rental properties enjoy particularly high demand.
Tampa is the industrial, commercial, and financial hub of Florida’s West Coast. While the city is best known for its beaches and tourist attractions, such as Busch Gardens, it is not only a center for tourism; Tampa also enjoys a diversified economic base that includes finance, health care, insurance, retail, technology, construction, and maritime industry. Large corporations such as banks and telecommunication companies have regional offices in the city. A number of Fortune 1000 companies are headquartered in the metropolitan area, with Publix Super Markets being the largest employer in Tampa Bay. Tampa is witnessing an influx of young and highly educated people owing to the growth in employment opportunities; most of them seek to live close to their place of work. This is particularly beneficial to those considering to invest in the Tampa real estate market, especially when it comes to traditional rental properties. Tampa is a decidedly white collar city with an employment growth rate well above the national rate. The Tampa housing market is also boosted by the numerous residential and commercial development projects being built in Downtown Tampa and in the suburbs.
For the first time in forty years, the Tampa real estate market made it into the Top 10 U.S. Markets to Watch rankings by PWC in its annual Emerging Trends in Real Estate: United States and Canada 2019 report. It was noted that Tampa is particularly attractive to real estate investors for its demographic growth, friendly business climate, and attractive cost structure.
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The Tampa housing market has witnessed a strong real estate appreciation in the last ten years. Since Q1 of 2000, Tampa properties have experienced a total appreciation of 129.39% at an average annual rate of 4.41% according to NeighborhoodScout.
Zillow reports that Tampa property values have gone up 5.5% over the past year and are predicted to rise 1.6% within the next year. Still, the Tampa real estate market remains one of the most affordable in the state and in the U.S. in general when it comes to property prices.
The Tampa housing market is currently a buyer’s market as there are more homes for sale on the market than people looking to buy. The prices are moving slow, making it the best time to buy an investment property in Tampa.
The vacation rental market has been booming in Tampa in recent years. The Tampa Bay Area market generated a total of $113 million in Airbnb revenue in 2018, accounting for nearly 14% of the state’s total Airbnb income.
The good news for Airbnb Tampa investors is that Airbnb is legal in Tampa on the state level, and there are no official short-term rental laws in place at the city level. Under state law, no city in Florida can prohibit short-term rental investing. However, Airbnb has an agreement with Hillsborough County, the county Tampa is located in, which requires Airbnb Tampa investors of non-owner occupied properties to pay three taxes: the Florida Transient Rental Tax (6%), Florida Discretionary Sales Surtax (1%), and a County Tourist Development Tax (5%). Hosts of vacation rentals must also register the rental property with Florida’s Department of Business & Professional Regulation (DBPR) in order to obtain a rental license, unless the host remains in the home during the guests’ stay.
Hosts using short-term rental platforms other than Airbnb will have to collect those taxes from tenants and remit them to the city themselves. Airbnb, however, collects and remits the taxes on behalf of hosts using its platform.