Florida Real Estate Investing - How Does The Sunshine State Stack Up?

Florida real estate investing is a great topic. Florida is an interesting market. I love Florida which is why I live here. As you may have read in previously posts, “I believe you should live where you wish but invest where it is best.” So to this note I am continuously asked, “What do you think of Florida as a real estate investing location?” Of course I do the unthinkable. I answer the question by asking another question. I ask, “What is your primary objective with your real estate investment?" Are you a lifestyle investor, a cash flow investor or a capital growth (appreciation investor)?

There are many people who love to invest in Florida. These are the people who are "life style investors". The lifestyle investors are flocking to acquire property in Florida because they plan to use it as a second home or to at least stake a claim while they finish out their working years at their current job. These investors greatest desire is to own in Florida to fulfill their lifestyle goals.

The "second home buyer" loves the many beaches and golf courses and year around heat. If you are a lifestyle investor these benefits will be your number one objective within your investment and the cash flow and or capital growth (appreciation) benefits come in second or third place as they relate to priorities within your investment. If this fits you, then you would be a lifestyle investor and this would be a great investment choice for you.

The trade offs:

Florida is a state with no state income tax: to replace the revenue from state income tax the state relies on tourist income and revenue from property tax. Property tax varies by county and tends to run high compared to many parts of the country. This high property tax cuts into the cash flow of the investor.

Also it is a state with high insurance bills: one indicator we always watch for is, "what are the insurance premiums within an area". Insurance companies have actuaries whose job is to assess (based on history) the probability of insurance claims coming in. In areas prone to weather challenges such has hurricanes, tornados, flooding, earthquakes, etc. These areas tend to have high insurance premiums. These high premiums also cut into the cash flow of the investor.

Florida is still trying to get its unemployment under control: we are still running higher than national average for unemployment which is negative indicators for our capital growth investors.

Please do not take me wrong. Florida is a wonderful place to live and to acquire second homes. From a speculative point of view it has the capability to have great future capital gains (appreciation) due to the high demand for real estate here. For the lifestyle investor it is a great choice.

For the cash flow investor and the capital growth (appreciation) investor, they will find their goals accomplished in different markets. So to answer the question, Is Florida a great place to invest? My answer is, “what is your primary objective for investing in real estate?”

If you would like to find out more about Florida real estate investing as a second home investment opportunity, give me a call today! 941-718-7761