In a recent study of real estate markets all over the U.S., seven of the top twenty cities for rental investment were located in the state of Florida. The study factored in housing prices, population size, economic health, and potential for housing to appreciate, and cities with strong economic growth were rated highly for their investment potential. Florida had more cities in the top twenty than any other state due to several factors that make Florida a unique opportunity for investors.
Not long ago, Florida was hard hit by the housing crisis. Communities throughout the state were devastated as incomes fell and more and more properties went into foreclosure. In fact, in 2008, one in 22 homes received a notice of foreclosure, with the effect of littering neighborhoods with abandoned properties that attracted crime. The retirees and vacationers that normally purchase many Florida properties each year stayed away during the crisis, causing housing prices to fall.
Fortunately, as the overall U.S. economy recovered from the crisis, Florida rebounded as well. According to recent measures, unemployment is down, consumer spending is up, and tourism is higher than ever. The recovery of the housing market is somewhat uneven, but in many parts of the state, house prices have climbed back up to their pre-crisis values. The return of retirees and vacationers has bolstered the economy considerably, creating new jobs in services, healthcare, and retail. Since these jobs are mostly low-paying, workers often can’t afford to buy a home and are more likely to rent.
The most favorable investments are single-family rentals, according to investment portfolio manager Jon Schechtman. With individual homes, the ratio of low prices to rental fees is good for investors in Florida. Single-family homes tend to have more stable tenants compared with multi-family housing, particularly since single-family homes are more likely to attract families and retirees. Another advantage of investing in single-family rentals is the lower cost to get started. With houses still priced below income level in many parts of the state, it is possible to get a low price on a house that will yield a high return as a rental property. To get more information about investing in Florida real estate, find Jon Schechtman on Twitter.