Retiring and relocating to Florida is a dream for millions of Americans, but the allure of the Sunshine State extends far beyond its year-round splendid weather and pristine golf courses. In recent years, it's not just affluent Americans flocking here, but also expats and investors from around the globe. This state is a fantastic place to live, which naturally makes it a promising investment hotspot. Its property market is among the hottest in the US, with many areas witnessing a surge in housing prices, despite a nationwide dip.
If you're considering overseas investments, homes and flats in Florida could indeed offer a swift return on investment. In this article, you will discover the advantages of investing in property in this state.
Content:
- Property purchase in Florida
- A host of tax advantages
- Robust property market
- High demand for housing
- No shortage of urban and resort amenities
- Thriving job market
- Conclusion
Property purchase in Florida
For a long time, buying property has been seen as a sound decision for those leaning towards long-term investments. The most popular way to maximise returns from housing investments is either through rental income or through reselling at a higher price. Florida's tax incentives make it a sought-after location for investment properties. Additionally, the consistent influx of tourists and the high standard of living add to its appeal. If you're after sunshine, access to luxurious beaches, and promising real estate, here are reasons why you should consider buying a house in Florida.
A host of tax advantages
Florida stands out as one of the few states in the US without a personal income tax. While the state does tax commercial corporations, there are exemptions for sole proprietors, partnerships, and certain types of organisations. This means that you could save on property investments if you operate under such entities.
For those considering buying property to let, the absence of personal and corporate income tax makes Florida an even more enticing location. Coupled with high demand and a robust market for both long-term and short-term rentals, investing in local real estate can be highly profitable. While the US rental market sees an average increase of just 3-5% annually, Florida showcases a much higher rate: some areas of the state have seen rental costs rise by a staggering 18.81% compared to the previous year.
As an owner of property in Florida, you might also be eligible to claim back the following expenses on your tax return:
- mortgage insurance premiums;
- mortgage interest;
- property taxes;
- closing costs and loan origination fees.
Another tax benefit in Florida is the absence of inheritance tax. This means that anything bequeathed to an individual won't be subject to mandatory levies.
There are also tax benefits if you declare the property as your primary residence or the sole residence of one of your dependents, allowing for a reduction in the taxable value of the property by up to $50,000. The state also operates the Save Our Homes (SOH) programme, which offers tax exemptions. The SOH programme caps the annual increase in assessed value at 3%.
Robust property market
Florida's housing market remains resilient. Even during economic downturns, the local market consistently outperforms many other regions in the US. Currently, while house price growth in many US areas is slowing, property prices in this state have surged by 8.9% year-on-year. In contrast, national housing prices have only risen by 3.1%. Homes in Florida typically fetch a higher resale value compared to many other parts of the US.
High demand for housing
Florida's population is on the rise each year, and with the widespread shift to remote working post-pandemic, this growth has been even more pronounced. Florida isn't just a popular holiday destination; it's a prestigious location where people move to start families, kick-start careers, or retire. As a result, buyer demand consistently surpasses many other regions, ensuring your property's value will appreciate faster.
No shortage of urban and resort amenities
With its pristine sandy beaches, stunning natural beauty, top-rated national amusement parks, and rapidly developing cities, Florida offers something for everyone. It's a favoured holiday and retirement spot for people worldwide. If your property isn't your primary residence, it's easy to leverage it for income through short-term and long-term rentals.
Thriving job market
Year after year, Florida's job market is touted as one of the best in the country. Beyond being a popular travel destination, the state is home to numerous tech, medical, financial, and manufacturing firms. Around 20 mega-corporations from the Fortune 500 list have their headquarters here.
Conclusion
Real estate remains a reliable investment avenue, especially during economic downturns. For long-term investments, it's wise to opt for properties in popular tourist and business hubs. Thanks to its high standard of living, pleasant climate, abundance of business centres, and tax incentives, Florida stands out as an excellent choice for capital investment.