Florida is an intriguing state when it comes to buying and owning rental property. On one hand, demand for homes — especially single-family homes — has been consistently on the rise in Florida. Yet despite the demand, it doesn’t necessarily convert to more homebuyers. Instead, even though Florida boasts fairly low housing prices statewide, many people are still opting to rent instead of buy. As a result, rental rates are skyrocketing.
Now add into the mix low property taxes and insurance, as well as no state income tax. Great climate and top-of-the-line healthcare are bonuses that help make Florida one of, if not the best, states for America’s retiring Baby Boomer masses.
Here’s a look at the best places in Florida to own rental property and turn a solid profit.
Tampa
Although Tampa home prices have risen in recent years, the city still has plenty of neighborhoods and zip codes where investors can find properties at affordable prices, and rent them out for $1,405 to $1,527 a month on average.
Tampa’s economic prospects really boost the city’s appeal to rental property owners. Tampa’s year-over-year employment growth beat the U.S. average. According to Bureau of Labor Statistics data, U.S. nonfarm employment increased approximately 1.6% from 2017 to 2018, while Tampa managed a 2.3% increase.
Healthcare and social assistance is the dominant employment sector in Tampa. This isn’t a bad thing considering jobs such as home health aides, personal care aides, physician assistants and nurse practitioners all rank among the top-10 fastest growing occupations in the country, according to BLS Employment Projections.
Here’s a breakdown of some important figures to consider before buying property in Tampa:
- Median list price – All Homes: $312,995
- Median list price – Condo: $239,900
- Rent list price: $1,527
- Median rent: $1,405
- 1-year job growth rate: 2.3%
- 5-year population growth: 12%
- Average 30-year fixed mortgage rate: 4.40%
- Rental yield: See rental yields for Tampa
The trajectory of Tampa’s population growth is very conducive to potential future property owners. Since 2013, Tampa’s population has risen by an impressive 12%, one of the highest rates in the country. With a local economy worth well over $130 billion, Tampa is easily one of Florida’s best markets to buy and own rental property. For a more in-depth look, or just to explore, take a look at this interactive map of the Tampa real estate market.
Jacksonville
Robust job and population growth as well as great affordability greet prospective investment property owners in Jacksonville. Florida’s largest city is also home to a first-rate healthcare system, and burgeoning biological sciences sector. The population in Jacksonville has grown about 8% from 2013 to 2018, and 24% since the year 2000. Plus, the median home price is $210,000 in Jacksonville, which is 33% cheaper than the national average, $278,900.
Jacksonville’s average rental yield is among the highest in the U.S. Rent growth is also healthy. The city’s 2.6% increase is better than the national year-over-year average of 0.5%. Specific markets within the Jacksonville metro area, such as Butler Beach, are displaying rent growth rates in excess of 10%.
Here’s a breakdown of some important figures to note before buying property in Jacksonville:
- Median list price – All Homes: $210,000
- Median list price – Condo: $134,950
- Rent list price: $1,250
- Median rent: $1,345
- 1-year job growth rate: 3.2%
- 5-year population growth: 8%
- Average 30-year fixed mortgage rate: 4.40%
- Rental yield: See rental yields for Jacksonville
The reasons for all this growth and development are manifold. Jacksonville’s cost of living is below the national average. And to this is we can add the usual Florida amenities, like warm weather, conducive business climate and no state income tax.
See interactive map of Jacksonville real estate market >>
Orlando
In terms of both employment and population growth, Orlando really outshines. From summer 2017 to 2018, employment increased 4.3%, which is almost three times the U.S. average growth rate. Its population surged by 14% from 2013 to 2018.
The most common employment sectors for those who live in Orlando are accommodation and food service (12.3%), which includes workers of Orlando’s world-class resorts like Disney World and Universal Studios Orlando. Second most common sector is healthcare and social assistance (11.9%), followed by retail trade (11%).
Here’s a breakdown of some important figures to consider before you buy property in Orlando. Also, here's an interactive map of Orlando's real estate market to help out.
- Median list price – All Homes: $285,000
- Median list price – Condo:$140,000
- Rent list price: $1,600
- Median rent: $1,478
- 1-year job growth rate: 4.3%
- 5-year population growth: 14%
- Average 30-year fixed mortgage rate: 4.40%
- Rental yield: See rental yields for Orlando
Rents grew 2.3% in the last year, which is well ahead of the U.S. overall growth rate. Rent yield in Orlando is markedly higher than in most other cities. Comparatively low home prices combine with relatively higher rent prices to create a city that is especially suitable to owning rental property.
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