Investing in a Florida rental property is well worth it paired with an established plan and a clear understanding of the property management process. Florida’s beautiful beaches, strong economy, and sunny skies contribute to a high rental demand and high rent prices. Florida is one of the best states for investment rental properties, whether it be a single-family home or a multifamily duplex.
While the state sells itself, your investment property requires proper management to turn into a prosperous and occupied rental property. Luckily for Florida investors, there are thousands of online resources and property management companies to choose from; rental property success is easily attainable with the right knowledge and approach.
At The Listing Real Estate Management, we find value in taking time to educate, align, and guide rental property investors of all experience levels. Today we’ll share why investing in a Florida investment property is worth it, and give you some pointers to do so successfully!
Benefits of Investing in a Florida Rental Property
There are significant benefits to investing in a Florida rental property that make doing so worth it for both first time and seasoned investors.
High Rental Demand
There is a consistently high rental demand in the state of Florida — one of the most significant reasons to purchase an investment property in this state. The COVID-19 pandemic sparked a mass migration to Florida, and though it has slowed, the rapid population increase contributed to a thriving rental market.
One of the main factors of a high rental demand is the lack of Florida state income tax. Having no income tax significantly reduces the amount of taxes an individual has to pay, and increases their overall income. In the United States, there are only nine states with no income tax; Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Renting a home in Florida provides significant financial benefits, cutting out the cost of income tax and property taxes. While Florida does have property taxes, renters do not have to worry about that cost unless they own a property of their own.
While rent prices have decreased over the past two years, Florida cities remain steady in population growth. The U.S. News and World Report stated that 11 Florida cities are among the top 25 fastest growing cities in the United States. These cities include:
- #1 Fort Myers, FL
- #3 Port St. Lucie, FL
- #4 Daytona Beach, FL
- #5 Tallahassee, FL
- #6 Ocala, FL
- #9 Orlando, FL
- #10 Sarasota, FL
- #12 Naples, FL
- #13 Tampa, FL
- #18 Lakeland, FL
- #24 Miami, FL
Purchasing a rental property in one of the fastest growing cities in the United States will play a pivotal role in the success of your investment. With large population and infrastructure increases come high rental demand and a competitive rental market. Competitive markets call for higher prices; if your property is priced and managed correctly, you will receive a high return on your investment and achieve high tenant retention rates.
Florida’s Strong Economy and Commitment to Creating Jobs
Florida’s government is highly committed to fostering a strong economy and high employment rate. According to Flgov.com, Florida’s statewide unemployment rate has been lower than the national rate for 45 consecutive months at only 3.3%. A low unemployment rate is a crucial factor to consider when selecting an investment property location. Areas with high employment rates are more likely to attract financially healthy renters, offering investors a stable rental income and peace of mind.
In addition, Governor Ron DeSantis has granted millions of dollars towards infrastructure growth to support tourism, business opportunities, and creating jobs throughout Florida:
In an effort to support the manufacturing industry, the governor recently awarded $4,873,788 to the City of Umatilla, and $5,500,000 to the City of Plant City through the Florida Job Growth Grant. These projects are expected to create about 4,000 jobs while increasing access to commercial and industrial sites.
In addition, Governor Ron DeSantis awarded over $5.8 million to the Titusville-Cocoa Airport Authority through the Florida Job Growth Grant Fund. This project will create over 900 high paying jobs.
As a rental property investor, it is essential to consider the local economy and evaluate the government’s approach to maintaining a high employment rate. Florida’s government shows a high commitment to constant growth and expansion while creating jobs for residents. High employment rates and a thriving economy bring more residents to the state, increasing the rental demand and, therefore, increasing rent rates.
What Areas of Florida Should I Invest in?
Florida is a geographically diverse and large state, which may make it difficult to decide where to invest in a rental property. Although various Florida cities are expanding exponentially, I highly recommend investing in the Tampa Bay area right now.
Investing in the Tampa Bay Area
Tampa Bay is one of the hottest rental markets and a highly sought after area because of its presence of major employers, unique lifestyle, and rapidly growing city infrastructure. Located on the gulf coast, the Tampa Bay area provides residents a vacation-like atmosphere, while offering easy access to competitive employment opportunities, school systems, and endless recreational activities.
Tampa’s many neighborhoods offer a multitude of investment opportunities, whether it be a multifamily complex in the city, or a single-family home in a residential neighborhood.
South Tampa
South Tampa neighborhoods are residential areas that include many houses, apartment complexes, and condos.
Seminole Heights:
Seminole Heights is a historic neighborhood that has recently drawn in new residents and has become a thriving community. Seminole Heights is filled with eclectic shops and boutiques, including vintage thrift stores, themed restaurants, and trendy dessert shops.
Channel District:
With its recent development, the streets of the Channel District are lined with high-rise residential buildings, drawing in a large crowd of renters.
St. Petersburg:
Because of its peninsular geographical location, the further development of St. Petersburg is limited. Now is the perfect time to invest in St. Petersburg as the city is experiencing a significant population increase, high rental rates, and an almost fully developed status. The lack of space available for further development will create a competitive rental market with high rent prices and rental demand, significantly benefiting rental property owners.
Temple Terrace:
Investing in a rental property in Temple Terrace presents a profitable opportunity for Tampa rental property investors. Temple Terrace is a suburban neighborhood home to the University of South Florida. Investing in a rental property in close proximity to a large university, such as USF, offers investors a secure and stable income stream.
New Tampa:
New Tampa is a suburban area located northeast of downtown Tampa. It is a rapidly growing area that includes many newer residential developments, shopping centers, recreation areas, and commercial spaces.
How to Start Investing in Properties
One of the most important aspects of purchasing a Florida investment property is conducting proper research; a rental property investment requires strategic planning to ensure a high level of success. Potential Florida property investors should research the following:
- Local real estate and rental market conditions
- Economic status and growth potential for the location
- Local property management companies
- Exact location and surrounding neighborhoods
- Future development in the area
It is essential to consider whether you prefer to purchase a fixer-upper or a turn-key property. A fixer-upper is a property that is not move-in ready; it requires work, whether it be redoing the kitchen or knocking down some walls. This property will be cheaper upfront but will require time and dedication to get it to move-in ready status. A turn-key property is a property in livable condition and ready to rent right away. A turn-key property will be more expensive upfront, but allows property owners to rent the property quickly with little to no maintenance or repairs.
In addition, another aspect to consider is what type of investment property to purchase. Whether it’s a single-family home, a multifamily duplex, a condo, or an apartment complex, all types of Florida investment properties thrive with the right research and management approach.
Should I Hire a Florida Property Manager?
Hiring a Florida property manager ensures long-term success and profitability for your rental property. Professional property management provides both new investors and seasoned investors with expertise and proven systems that aid in the high-level of operational efficiency. A rental property cannot thrive without diligent management and immense knowledge of each step of the rental process.
At The Listing Real Estate Management, we work with residential property investors of all types. As a full-service property management provider, we at The Listing ensure a smooth operation of your rental property, optimizing your income and financial returns. Our property management services include:
- Marketing and leasing
- Tenant screening
- Rent collection
- Maintenance and repairs
- Rental property accounting
We are proud to be a trusted source for Tampa property management services. With over 15+ years of property management experience, you can feel at ease knowing all aspects of your Tampa rental property are protected. At The Listing Real Estate Management, our rental property managers are licensed by the Tampa Regional Realtors Association and the National Association of Regional Property Managers.
If you have any questions about the investment or property management process, our property managers will be more than happy to assist you. Contact us today for more information!
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