Blog Post 003: Buying Investment Properties in Florida
Blog Post 003: Buying Investment Properties in Florida
As home prices increase across the US, investors (and any residential home buyer) cannot find good investment opportunities. That’s why you should consider Florida houses. WHY? Read on, both investors, and, home buyers!
Are Florida Houses Cheaper Than Other US States?
All throughout the United States, property prices continue to rise in 2022. With this increase in median house prices, it can be more difficult for investors to find successful properties. But even though prices continue to increase in other states, Florida houses continue to stay relatively low.
Mashvisor’s latest data shows that the median property price for houses in Florida is $686,642. Though to some this number may appear high, it actually is quite low compared to most other states. Below are some other US states and their median property prices:
Alabama – $770,777
Arizona – $754,536
California – $1,162,820
Colorado – $973,123
DC – $754,434
Idaho – $796,283
Massachusetts – $895,543
As you can see from the Mashvisor.com data above, many other states have much higher median property prices than houses in Florida for sale. This makes Florida houses great for real estate investing.
5 Reasons Why Florida Houses Are Cheaper
Now that we have reviewed the data and can see that Florida houses for sale are much cheaper than other states’ properties, we will look into why this is the case.
1. Insurance and Property Taxes
One of the first reasons that the median property prices for Florida houses are cheaper than in other states is because, in some areas, the insurance and property taxes are very high. Florida is known to experience unstable weather conditions throughout the year. Different natural disasters like tornados, hurricanes, sinkholes, and severe thunderstorms are prone to happen in this state.
Due to these questionable weather conditions, insurance and property taxes for Florida houses tend to be higher than in other states, especially in the cities and towns near the coast of Florida. Property prices are therefore lower to sort of offset the insurance and property taxes.
2. Lots of Underdeveloped Lands
Even though you can find plenty of Florida real estate available along the coastline and shore, there is actually a lot of underdeveloped land in the middle of the state. Developers have been purchasing these plots for cheap and building new properties. This helps the rural areas of Florida become more urbanized.
This is also a great opportunity for investors. While houses on the coast may be a little pricy, purchasing and developing your own property can be a great way to make money in real estate. These properties can then be used for traditional or Airbnb rentals, or you can even sell them to make a quick profit.
3. Lower Median Income
Median property prices in Florida are lower than in other states due to the fact the median income in Florida is also lower than in other states. In the real estate market, Florida houses cannot be too expensive, or else the average buyer wouldn’t be able to afford any property. Keeping prices low in the area can make homeownership more obtainable.
Investors can capitalize on these cheaper property prices for Florida homes for sale to increase their profits. Purchasing a property in Florida will be less expensive than in other states, and therefore create more of an opportunity to generate a higher return on investment.
4. Smaller Houses
Florida houses also tend to be smaller in size than other homes in different states. As these properties are smaller, median property prices will be lower as well. Additionally, houses for sale in Florida tend to be older homes. This factor contributes to the lower property prices as well.
Investors can capitalize on these smaller homes. You will be buying listings for a lower price with the opportunity of generating a high income.
5. Large Supply of Properties
Generally, there is typically a large supply of properties available in the housing market. This makes the houses less expensive, as there are more to choose from, and makes finding a Florida investment property easier. The property supply in Florida always has many kinds of income properties for investors to choose from.
RECAP
If you are an investor (and home buyer!) wondering how to invest in real estate, a good place to start would be to look at Florida properties. Any investor should consider Florida houses for their next real estate investment property due to lower median property prices. Not only is there a large profit to be made just from the low property prices, but metrics such as cap rate and cash on cash return show high profit potential for all rental properties in Florida.
Resources:
https://www.mashvisor.com/
https://www.biggerpockets.com/