Rental property in Florida is experiencing a boom year with rental rates rising steadily and demand showing no signs of dropping. A recent report in Forbes looked at the market and highlighted the three cities with the best returns for buy-to-let investment: Tampa, Jacksonville and Orlando.
Market drivers
The author of the Forbes report, Andrew DePietro, calls Florida “an intriguing state when it comes to buying and owning rental property”. He points out that demand for homes continues to rise and prices for property in Florida are “fairly low”. However, instead of buying a home, many people prefer to rent. The result is plain to see – “rental rates are skyrocketing”.
A significant proportion of demand for rental property in Florida comes from the baby boomer generation. The Sunshine State ticks all the boxes for those coming up to retirement (or already retired) and as a result, attracts this age group in droves. Given this ever-increasing demand, DePietro turns his attention to where you buy and own rental property “and turn a solid profit”.
Tampa rental property
His top pick for rental property in Florida is Tampa. This metro area combines three crucial factors for buy-to-let investment – a buoyant economy, the right demographic trends and affordable property.
DePietro points out that the Tampa economy is worth “well over US$130 billion” and that job creation is booming. In addition, the metro area has seen a 12% growth in its population over the last five years. Add to this good-value properties and Tampa is one of the most attractive places in Florida to buy rental property.
“Tampa is easily one of Florida’s best markets to buy and own rental property,” he says. “Investors can find properties at affordable prices and rent them out for US$1,405 to US$1,527 a month.”
Jacksonville rental property
Next up on the Forbes list of the best places to invest in rental property in Florida is Jacksonville. Highlights in this metro area for the buy-to-let investor include average rental yields that are “among the highest in the country”.
In addition, median prices for property in Jacksonville come in at 33% below the national average and demand remains consistent. The population has grown by 8% over the last five years.
Orlando rental property
The final pick in the Forbes trio is Florida’s theme park capital. In Orlando too, rental property is an extremely attractive investment proposition. “In terms of both employment and population growth, Orlando really outshines,” says DePietro.
Backing up his choice of Orlando as one of the best spots to buy rental property in Florida are figures such as 14% population growth over the last five years. He also cites the 4.3% job creation rate in the 12 months to July this year, almost triple the national rate. And finally, Orlando offers exceptional rental yields, which are “markedly higher than in most other cities”.
Buy-to-let in Florida
So far in 2018, Florida has consistently posted higher employment creation and population growth than the national average. The state also recently registered the 80th consecutive month of house price rises, proving that the property market crash has been left far behind.
Analysts point to more of the same economic success over the short to medium-term. Florida also offers other attractions to new residents. These include no personal income tax, a pleasant year-round climate and a relatively low cost of living. Combined, they ensure the Sunshine State will continue to grow making rental property in Florida a very attractive investment proposition.
(Source: Forbes)
