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Investing in real estate is a reliable way to save capital. With a competent approach to choosing a property, you get the maximum benefit with minimal risk. If you are going to invest in the US real estate, you’d pay attention to Florida. This unique state is perfect for not only the warm climate and resort entertainment enthusiasts but also for entrepreneurs attracted by the mild tax regime and the wide opportunities for business and investment.
According to the NeighborhoodScout analytical service, due to high demand, real estate in Florida has risen in price by 282.35% over the past decade (about 6.14% per year), which makes it one of the best options for long-term investments.
You will learn more about the specifics of the housing market and whether it is profitable to buy real estate in Florida in 2023 from our article.
Content:
Florida property types
Florida has a wide range of accommodation to suit all tastes and budgets. Let's take a look at the most popular housing types.
Single family houses
Single-family houses are traditional standalone detached houses. If you can afford such housing as an investment or residence, then you ensure the security of your investment. These houses in Florida tend to rise in price over time and generate the highest rental income.
- Average cost – $390,000 per property
- Maintenance – from $2500 per year, depending on the size of the house and the presence of a swimming pool
Pros of single-family houses:
- Privacy
- A private yard
- Large living space – an average of 211 m2, while the average area of such houses in other states is 176 m2;
- High demand for rent
- High profitability
Disadvantages:
- High price
- Expensive maintenance
- Time-consuming repairs
Multi-apartment buildings
Apartment buildings include condominiums and townhouses. Apartments in such facilities are usually cheaper than detached villas and less expensive to maintain. Let’s consider their main features.
Condos
This type of real estate, especially new developments in big cities like Miami, is a great option for investors.
In condominiums, each owner has their own personal apartments and shares ownership of common areas with other tenants. The Condominium Association is governed by a board of directors who are responsible for the maintenance and repair of common areas such as entrances, corridors, stairs, and rooftops.
- Average cost – $310,000 per apartment
- Maintenance – $50 to $1,000 per month depending on location and size of apartment
Pros of condominiums:
- More affordable than townhouses or single family homes
- Good profitability despite relatively low cost
- All issues related to the housing maintenance are taken over by the condo’s administration
Cons:
- Presence of neighbours
- No own land plot
- Common entrance
- Maintenance charges
Townhouses
Townhouses, often referred to as low-rise condominiums, are single-family homes that have side walls attached to other residential properties of the same type.
The cost of such properties is close to the price of condominiums, and the monthly fee is usually lower. Townhouses are also a good option for vacation rentals and seasonal rentals.
Multi-level townhouses can be a great choice for large families, each member of which needs their own space. Compared to a detached house, townhouses are cheaper.
- Average cost – $306,000 per property
- Maintenance – $338 per month on average, depending on location and size of the facility.
Pros of townhouses:
- A few neighbours
- Often there is an adjoining land plot
- Private entrance
- A parking space
- External maintenance is usually carried out by the Condominium Partnership.
Cons:
- Small area of land plots
- Presence of neighbours
The profitability of real estate in the state varies depending on the city, location, and the property’s features. So, for example, Key West shows the highest rates of return – 19.95% per year, and the lowest is Fort Myers with 7.99% per year.
The current situation in the housing market
For several years, the Florida real estate market has seen an unprecedented increase in prices. During the pandemic, the Sunshine State has faced increased demand from corporate investors, as well as a large influx of migrants, which has pushed home prices even higher. For 2 years (from Q3 2020 until Q3 2022), real estate has risen in price by 53.28%. Considering the past 12 months, the rate of increase in the cost of housing in Florida is still one of the highest in the US at 26.35%.
Today, the Florida housing market is undergoing major changes. In March 2023, prices rose by 3.2% year on year. At the same time, the number of houses sold decreased by 19.7%. The decrease in the number of sales is associated with an increase in mortgage rates (in April 2021, the mortgage rate was 3.12%, and in the last week of March 2023 – 6.32%).
The level of new single-family home listings for sale was lower than usual in early 2023, down about 5% year-over-year. The number of new offers of townhouses and condominiums decreased by 2.4% compared to the same period of the previous year.
Summing up
The choice between an apartment building and a detached house is a purely personal decision that depends on individual preferences and investment opportunities.
Regardless of what you are planning to buy: a house in Florida or an apartment, our experts will assist you with choosing a property and organizing its safe and secure purchase. Invest in Florida real estate wisely with Florida-RealEstate!