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Forget basketball and even the weather—when anyone mentions the Miami “heat” in recent years, it’s more likely to be talking about real estate. But in 2023, when interest rates are on the rise, and markets are showing signs of recession and the return of the season, is Miami still the best place to own a residential investment property? What about Orlando and Tampa, the boom cities of Central Florida? Or are there better deals further north in Jacksonville?

In our third and final installment of Market Snapshots, BiggerPockets joins hands with Belong to look at the Sunshine State. if you want Guaranteed Rent Every Month In popular cities like Miami, Orlando, Tampa and Jacksonville – see if you qualify BelongXThe new app changing the way residential investors manage their rental homes.

Only you know your financial situation and what you can afford, so this report is designed to support your research by presenting statistics on average pricing, rents and current market conditions in Florida. Published data is accurate as of April 2023.

Is Florida Still An Attractive Market For Real Estate Investors?

The land of sunshine and low taxes, Florida has long been an attractive state for real estate investors. With strong rental demand and no rent control laws, it was a favorable state for landlords even before the massive pandemic-fuelled migration and surge in home appreciation. But after years of reports of rising rents and affordability issues, is Florida still an attractive option for investors and renters?

So far in 2023, the hike in prices has not disappointed the eager residents. Between January-March 2023, Miami, Tampa and Orlando have all taken out spots Redfin’s Top 10 Migration Destinations,

This is likely due to the strong jobs market in Florida, with major cities enjoying lower-than-average unemployment and above-average job growth. As a real estate investor, the job market can be a good indicator of where to invest for the long term, knowing that rental demand will remain strong and your residents will be able to pay the rent.

according to an analysis done by moneygeek, Six of the 10 best cities for employment are in Florida, with high job and salary growth attractiveness among job seekers. Jacksonville currently tops the list, with wage growth triple the national average. Considering the price-to-income ratio, Jacksonville, Tampa and Orlando are the top three best cities for job growth.

looking at florida price-to-rent ratio (median home price divided by median rent), most major cities are rated below 15. This rating usually indicates that it is more economical to buy than to rent. But this method does not account for the cost of lending. While solidifying long-term rental as an attractive option in Florida, high interest rates are still pricing out many landlords. This is good news for investors and cash buyers who can offset the cost of borrowing and take advantage of falling prices in local markets.

Continue reading for a drill-down into the numbers on Miami, Orlando, Tampa and Jacksonville.

Rental Market Snapshot: Miami

According to redfin, Miami home prices are up 6.7% over the last year, selling for a median price of $560,000. Despite inventory being significantly lower than last year, Redfin says the Miami market is “not very competitive” at the moment, with about 16.4% of homes selling under demand. Zillow The median list rent in Miami is $3,700, which is $1,500 higher than the national average.

Despite a drop in home prices at the start of the year, the latest S&P CoreLogic Case-Shiller Index Report that Miami remains the leading market for year-over-year gains among the top 20 cities. Miami homes are up 10.8% year-over-year, making it the best-performing city for the seventh month in a row.

In fact, the drop in prices is doing little to improve affordability within the market. RealtyHop’s Affordability Index ranks miami least economical housing market in April 2023, overtaking LA and New York. Affordability is calculated using the median earnings of Miami residents, estimating that potential buyers need to spend 80.46% of their monthly income on home ownership costs. This means that as one of the Least Affordable Rental MarketIt’s still a better option for many residents than trying to crack the buyer’s market.

While homes across the US have experienced rapid appreciation with an average of 36.9% over the past three years, homes in Miami have outperformed the average. Appreciation rate of 49.3%,

Miami numbers at a glance:

• median home price: $562,000
• Average Fare: $3,700
• Price-to-rent ratio: 12.65
• Average Appreciation 2019-2022: 49.3%

Rental Market Snapshot: Orlando

According to redfin, Orlando home prices are up 5.3% over the last year, selling for a median price of $361,000. Orlando ranked as a “somewhat competitive” market, with homes selling fast with an average of 32 days on the market, up from a breakneck pace of just eight last year.

For those with a focus on the long-term rental market average fare Orlando has $2,192, which is about $47 higher than last year and a slight $42 higher than the national average.

Although price growth is slowing down, property owners in Orlando enjoy average praise 51% in the last three years. Like Miami, the price-to-rent ratio sits below 15, but borrowing costs are tipping the scales to make rent more affordable for those with no more than a 20% deposit.

Orlando Snapshot:

• median home price: $361,000
• Average Fare: $2,192
• Price-to-rent ratio: 13.72
• Average Appreciation 2019-2022: 51%

Rental Market Snapshot: Tampa

Tampa has been a winner after South Florida’s price explosion, as people flock to Central Florida in search of more affordable housing. It fueled its own price rise National Association of Realtors (NAR) reports Tampa prices have increased 59.6% over the past three years, well ahead of the US average of 36.9%.

as per latest S&P CoreLogic Case-Shiller IndexTampa is second only to Miami in terms of price growth, with an increase of 7.7%. redfin The median sale price of Tampa homes currently stands at $409,000, up 9% from last year’s figures. Like Orlando, Tampa is listed as a “somewhat competitive” market, with homes selling out in about 31 days. Those who invest in Tampa can get higher rents than in Orlando, with a average fare $2,295 ($145 above the national average).

While price growth is slowing, it remains an attractive market long term that will continue to attract new residents, with the NAR also reporting that job growth is sitting above the national average of 4.8% and the unemployment rate is at a low 2.2%. Running on %. ,

When calculating the potential cash flow for a residential investment in Florida, it is important to take into account the cost of insurance and the risk of severe storm damage to properties. This is especially true when investing in flood and storm-prone Cities like Tampa.

according to climate research First Street FoundationUp to 49% of Tampa properties are at risk of flooding, so it’s important research at your own risk And factor in the cost of protecting your assets.

Tampa snapshot:

• median home price: $409,000
• Average Fare: $2,295
• Price-to-rent ratio: 14.85
• Average Appreciation 2019-2022: 59.6%

Rental Market Snapshot: Jacksonville

With prices higher in South and Central Florida, what about the North? The median home price in Jacksonville is $295,000, making it a much more affordable option for investors. As with other city settings, National Association of Realtors (NAR) reports that Jacksonville’s price growth has exceeded the US average over the past three years, with homes increasing in value by 50.5%.

Zillow The median rent in Jacksonville lists $1,750—less than half the median rent in Miami. But there’s still an opportunity to gain cash flow here, thanks to a booming job market and attractiveness for people who can’t afford the high rents. Jacksonville is enjoying low unemployment (2.1%) and strong job growth (5.7%). Coupled with rents $400 lower than the national average and the city makes a strong case for migration, attracting new residents to fill rental vacancies.

Just like in Tampa, be sure to calculate the cost of protecting your Jacksonville investment from flood damage. FEMA has estimated Because every inch of flooding on your property can cause up to $25,000 in damage, flood insurance is essential.

Jacksonville Snapshot:

• median home price: $295,000
• Average Fare: $1,750
• Price-to-rent ratio: 14.04
• Average Appreciation 2019-2022: 50.5%

How Real Estate Investors Can Track The Florida Rental Market

Whether you’re new to the real estate investing game, working with a troubled property management company, or self-managing your rental home, BiggerPockets and Belong can help.

From eBooks to podcasts, BiggerPockets offers educational resources for every level of real estate investing experience and strategy. When it comes to managing your home, Belong has industry-first fintech solutions to manage your cash flow more effectively – even if you choose to self-manage your assets. From guaranteeing rent to credit reporting and insurance, belong There are modern solutions for a market that is changing daily.

Learn more and find out if your home qualifies (even if you’re mid-lease):

Note by BiggerPockets: These are the views expressed by the author and do not necessarily represent the views of BigPockets.