Real Estate Investing in Florida: Tips and Tricks

When thinking about real estate investments in Florida, people often recall Miami with its elite skyscrapers and snow-white beaches. However, there are other exceptionally good cities for investors, such as Orlando, Jacksonville, Tampa, Palm Bay, or North Port. Based on the most recent reports, it’s true that Florida has one of the hottest real estate markets in the country, with a constantly increasing number of real estate transactions. According to the Douglas Elliman portal, the demand for homes increased by more than 260% compared to the same period last year. Read on to learn about the key reasons to invest in property in Florida, as well as to find valuable tips on how to invest beneficially.

Why Invest in Florida?

Internal migration of the population in the US has stimulated interest in Florida as a possible final destination. More and more Americans are leaving the big cities for the suburbs or just moving from “overvalued” states to places where the cost of living and real estate is fair. In this regard, Florida with a great involvement of foreign capital and a booming coastline is one of the most attractive destinations. Besides, the ICG report indicates that in 2019, 950 people moved here daily from the northeastern states. The increased interest in Florida housing can also be tracked on – an AI-driven tool for real estate search. Home sales and prices are rising, and the reason is not just the warm climate but also the following key aspects.

Low Taxes

The choice in favor of Florida for American residents is evident as there is no state income tax for individuals, regardless of citizenship, as well as no interest being charged on dividends or salaries. Florida received numerous top rankings for its friendly tax climate, which makes the region attractive for permanent residence. For example, the local corporate income tax rate is 5.5%, which is about half that of Illinois.

Low Land Price

When stepping into the world of the Florida real estate market, one of the main advantages of investing in local housing. For example, land plots in North Port with an area of about ten acres will cost from $12,000 to $15,000 compared to the Staten Island district of New York, where the same plot will cost at least $300,000. At the same time, land in North Port annually adds 6-7% value. However, in Tampa or Jacksonville, the price will already be higher.

Low Construction Costs

While the property itself is important to consider, you must also keep in mind the cost of construction. In some cities of Florida, building a house with three bedrooms and two bathrooms with all the necessary utilities and amenities will cost from $200,000 to $250,000. Of course, compared to New York, it is very cheap, but the low construction cost is due to several reasons. The minimum wage for a worker in Florida is $10 an hour, in New York, it is about $15. Besides, the construction cost is also affected by seasonality: in Florida, the works are performed all year round.

How to Make More Money Investing in Real Estate?

If you’re wondering whether and how to invest in property, now is a better time to invest than any. And here are several ways to increase your return on investment:

• Divide a large apartment into small separate sleeping quarters and let separate rooms instead of the whole apartment. For example, you let a three-room apartment for $1000, but if you divide it into three bedrooms and take $500 from each tenant, you will receive $1500;
• Redevelopment allows not only to improve living conditions but also to increase the value of the real estate by 30-40%. However, it’s worth noting that any redevelopment must be coordinated with the responsible authorities;
• If you are the handy type and don’t mind living in a construction zone, you can buy a fixer-upper to move in, make repairs and improvements, and then sell it for the best price. However, this strategy requires money as you will need a down payment and funds for repairs, but your hard work can create a lot of equity.
• Renovation increases the cost of the apartment by 1.5-2 times, so by improving an apartment, you are investing the money to build equity in the property. For example, an apartment in poor condition costs $100.000, but as you make repairs the price can be raised to $150-200.000;
• The percentage of income is greatly affected by design. Today, more and more people are looking for European-style houses with wider windows and door openings, high-quality tiles or parquet on the floor. It’s true that the construction cost, in this case, will increase, but the value and price will also double.

Conclusion

One of the best things about real estate investing is that it’s open to everyone. However, to succeed in any business, be prepared to invest not only money, time, and knowledge and upgrade your skills. ​​As the world picks up the pieces from the lengthy pandemic, this is the right time to invest in Florida’s real estate market.