The South Florida Rental Market Is Hot!South Florida is America’s own little patch of tropical Caribbean paradise—a fact that is currently reflected in its booming rental market. According to a recent report compiled by Altisource’s RentRange, which analyzed the fastest-growing rental markets across the United States, South Florida is one of the “breakout stars” in the growing trend toward renters preferring properties in the South and West of the nation: “The RentRange data shows that cities in the South and West generally had the greatest increases in home rental rates, while cities in the Midwest and Northeast experienced smaller increases,” states the report. “California and Florida were particularly strong, accounting for seven of the top 10 markets on the list.”What’s So Hot About South Florida?South Florida is a landlord’s dream come true for manifold reasons, but primary among these reasons is certainly its idyllic climate and scenery: Because of its appeal as a holiday destination, SouthFlorida benefits from a high rental demand throughout the year, as both workers in the tourism industryand the tourists themselves need accommodation. Additionally, while many markets continue to suffer the after-effects of the economic decline of the early 2000s, it is believed that South Florida’s status as atourism magnet has helped it to bounce back quickly and completely.However, for all that South Florida is in high demand, landlords can still invest in this market without breaking the bank (so long as they choose the right area in which to do so); the Tampa-St Petersburg-Clearwater area, for example, has a median house price of just $78,000, yet the average market rent in the same area is $1,270—meaning that savvy landlords who invest in this area will enjoya gross rental yield of more than 20%. Even with additional expenses like property taxes, maintenance costs, vacancy-related costs, etc., all factored in, most landlords in this part of South Florida end up taking home a respectable income. Additionally, those landlords who are willing to work with local property managers in order to manage diverse short-term rental properties in major cities like Orlando can reap even greater rewards from the lucrative vacationer market. While the average house in urban Orlando sells for $170,500 while pulling in only the same long-term rental rates as Tampa homes do (about $1,250 per month, on average), a short-term holiday rental in this area can pull in more than $100 per night. (Note, however, that if you’re a landlord interested in the short-term rental market, you’ll need to be aware that there’s more work involved in managing short term rentals—hence the need for a property manager. Higher turnover rates mean more paperwork, more cleaning and renovation costs, and more marketing costs.)Miami, too, is worth a look, whether you’re planning to invest in short-or-long-term rental units:Though the metro Miami area was harder-hit during the recession than many parts of Florida, it would appear that the crisis is now well and truly over. Property prices in downtown Miami are once again soaring, with homes having a median sale price of $331,000, meaning that they are close to being on par with pre-2007 levels once again. Some other “up and coming” areas of interest in South Florida include Doral, which boasts a low rate of unemployment and high population growth in addition to affordable property prices, Hialeah Gardens, another safe investment thanks to high property demand, and—for those landlords who have a bit more money to invest—Lauderdale-By-The-Sea is currently providing a booming luxury property market. (Expect to pay around $400,000 for a property in Lauderdale-By-The-Sea,
knowing that its value is likely to keep increasing by about 5% per year if present trends continue.) While investing in real estate is always something of a gamble—and that’s part of what makes being a landlord such a dynamic and rewarding profession—it’s safe to say that the South Florida market is hot and likely to stay that way for some years to come. Just make sure to do your due diligence before investing in any given property and you’re likely to enjoy substantial rewards from your South Florida homes and multi-unit dwellings.