Florida Real Estate Investment: Best Places to Invest in 2021

If you are looking for a Florida real estate investment right now, you have the right idea. Since the Covid 19 Pandemic, people are flocking to warmer climates. Whether it is because they are permanently working remotely or simply had a quarantine epiphany that life is too short to be freezing for half of the year, people want to be south and particularly in the sunshine state. All this hype has caught the attention of domestic and international Florida real estate investors alike.

How to find the Best Florida Real Estate Investment Opportunities

What are the best places to invest in real estate in Florida? When evaluating your real estate investment opportunities in Florida, there are many factors that you should take into consideration beyond, “Does this investment property fit my budget?”–Yes, of course we will walk you through the best real estate deal in Florida, as well as dive deeper into how you should evaluate what are the best places to buy real estate in Florida for you.

1. Location

Location! Location! Location! This is the most important factor in evaluating the best places to invest in real estate in Florida or properties anywhere, in fact. Why?–because if the land that you own is worth a lot of money (and that would be because of its location) then nothing else matters. The asset is fool proof because of the finite nature of land. A “good” location could be proximity to cool local restaurants and the city center, it could be proximity to the nearest body of water or it could be the quality of the school district among other things. Regardless of what makes it a good location, know that location is what determines whether it is the best real estate investment in Florida or simply a money pit.

2. Residential Investment Types

Real Estate investing in Florida can be broken down into 3 types (excluding commercial–we will get into that next). Depending on which Florida market that you are planning to invest these have varying pros and cons, but pay attention to the national averages for each type.

  • Single-family homes: Take into consideration of the state of the housing market. To quote a recent Forbes headline, “America’s Housing Market is Officially Over-Heating Everywhere.”
  • Condominiums: The condo market is following suit of the housing market. While some worried people would turn away from this property type to avoid lobbies and elevators during the pandemic, the condo market has proven resilient.
  • Vacation Homes: In this case the national averages, do not matter because not every state is necessarily a vacation destination. Whether it be a single-family home or condo, short-term rentals and airbnbs are in high demand for vacationers, snow birds, and people looking to test the waters prior to relocating.

3. Commercial vs. Residential

While typically individual investors will invest in one of the three residential investment property types mentioned above, commercial real estate offers more opportunity to diversify (offset risk of financial market investments with real estate’s historically stable returns) and scale (get higher returns per capital deployed).

It’s possible you didn’t consider this avenue prior because you don’t have $20M liquid to buy a shopping center; however, crowdfunding real estate investment platforms like School of Whales, make it possible to become a stakeholder in a diversified portfolio of commercial real estate for only $500 initial investment. Check out your potential ROI for an investment that takes less than 3 minutes to set, and become one of the many Florida real estate investors, reaping the benefits of passive income.


4. Local Market Trends

When Florida real estate investors are trying to decide which city they should invest, it is important to study local market trends. For example, the property prices and potential rental income vary vastly when looking at Jacksonville vs. St. Petersburg vs. Orlando vs. Miami.

Factors such as cost of living, unemployment rate and job market and proximity to the coastline impact home prices and the rental market. As with any investment. Do your due diligence.

Joining a real estate investment group might be a great way to connect with experienced local investors who understand local market trends based on their experience and research.

5. Population growth

Population growth is a major impetus behind the rapidly increasing prices that we are seeing in the Florida market. If population growth is outpacing housing construction (which is currently is because of the mass migration south and high raw material prices), then the supply is unable to meet the demand, pushing prices higher. For this reason, real estate investing in Florida has skyrocketed

6. Job growth

Job growth and the U.S housing market are closely tied together. Where there is job growth, there is a growing economy and growing population. In particular, rental property owners benefit from job growth, as hypothetically these newly employed people are unable to take loans to purchase houses, so demand for rental properties goes up. Increase demand for rental properties leads to less vacancies, more competition and thus higher prices.

7. Real estate market

So this one is obvious: If you are investing in real estate in any market you should understand the current state and future projections of the real estate market in which you plan to invest. In a balanced housing market, buyer demand matches the inventory of homes for sale. In a seller’s market, there are more buyers in the market than there are homes for sale, so the market favors the seller–i.e. they have more power in the negotiating the terms of the sale. The opposite is true in a buyer’s market: there are more homes for sale than there are buyers, so the buyer has the upper hand.

8. Cap rates

Capitalization rates or Cap rates are calculated by dividing a property’s net operating income (an investment property’s profitability before factoring in any costs from financing or taxes) by the current market value (an opinion of what a property would sell for based on current market conditions).

This ratio, expressed as a percentage, is an estimation of an investor’s potential return on a real estate investment.

If you are debating between multiple properties, a Cap rate is a useful metric of comparison given that you cannot always compare apples to apples when looking at home values–Why? Factors like location and date of construction amongst others things must be taken into consideration.

Best places to invest in real estate in Florida in 2021

Miami, Florida (best real estate market in Florida for CRE)

Miami has some of the best deals in Florida real estate, especially if you’re looking to invest in commercial real estate. Why?–Well, to start three of the nation’s top 10 retail destinations are in Miami: Design District, Brickell City Centre and Miami World Center (which is currently under construction). The demand for retail space remains strong among national and international retailers that are lured to Miami’s tourist base, citing South Americans, specifically, who arrive with empty suitcases to fill with purchases.

But the value of Miami commercial real estate is not only about retail and shopping crazed tourists. Finance and technology companies are opening branches or just straight up moving headquarters to Miami, attracted to the laissez faire approach to the Covid 19 regulations and of course the year round balmy weather. Office building inventory is decreasing rapidly. This high demand in parallel with slowed down construction of new workplaces is driving prices higher. The time to get in is now, and School of Whales makes that possible with as low as a $500 investment.

Of course, viable Miami real estate investment is not limited to commercial real estate. Given it is the most densely populated metropolitan area in the state, there are an abundance of real estate opportunities.

Orlando, Florida (best residential real estate in Florida)

Orlando has the best real estate in Florida, if you are looking for residential investment opportunities. Located in Florida’s Sunbelt Region, the climate is agreeable (not as hot as Miami, but avoiding any sort of winter chills that Jacksonville may experience). Moreover, it is home the the world-famous Disney World and Universal Studios. Not to mention, cost of living is low. For all of these reasons, families looking to settle down and tourist looking to experience the amusement parks would serve as ideal short-term and long-term renters.

Fort Lauderdale, Florida

Just 35 minutes North of Miami (that is, without traffic), Fort Lauderdale offers the same hustle and bustle as its southern counterpart with a little more laid back vibe–think more flips flops and jean shorts and less heels and sun dresses. In Q1 of 2020, single-family home’s in Fort Lauderdale dollar volume rose 19.3%, from $1.4 billion to $1.7 billion and condo dollar volume increased 9.9%, from $805.3 million to $885 million. If you are looking for rental properties or vacation homes in south Florida, Fort Lauderdale offers some of the best waterfront properties, and is a great alternative, if Miami is not your thing.

St. Augustine, Florida

Located in the northeast coast of Florida, St. Augustine is the oldest city in the U.S. The city’s rich history is meticulously preserved with its Spanish colonial architecture and narrow brick streets and alleys. One of Florida’s most visited cities, makes this one of the best places to buy rental estate in Florida, if you are looking for short-term rental properties or vacation homes that can generate passive income when your not staying there.

Jacksonville, Florida

Continuing northward up the east coast of Florida, you will find yourself in Jacksonville. Jacksonville offers some of the the best real estate values in Florida. The median selling price for a single family home is $240,00, which is 6% less than the national average and well below that of the properties in South Florida. Jacksonville population continues to grow, appealing to those looking for a more suburban lifestyle in an affordable market. The Bureau of Economic and Business Research (BEBR) at the University of Florida predicts that over the next ten years more than 800,000 new residents will move to the area. Moreover, Forbes ranks Jacksonville, Florida as the 22nd best place for business and careers and one of the best places for job growth in the entire U.S with Fortune 500 companies like CSX Corporation, Fidelity National Finance, and Southeastern Grocers located here. So whether it’s residential rental properties or commercial real estate investments, Jacksonville offers the best real estate deals in Florida. Not to mention, home values in Jacksonville increased by 7.5% last year and are expected to grow by another 8.4% over the next 12 months.

Pensacola, Florida

If you’re looking for some Southern hospitality in the setting of a tropical paradise, Pensacola is your city! Perfect for a single family home investment property, during a period of normal Market Conditions, people buy and sell for reasons such as job transfers, up-sizing, downsizing and new home buyers entering the market for the first time. During this period, it’s a majority of Florida real estate investors that are looking for a market that has not yet been fully tapped into.

Destin, Florida

East of Pensacola, is the popular tourist destination, Destin. Trending in line with the rest of Florida’s booming real estate market, Destine is a great place to buy property for short term rentals.

Tampa, Florida

Located on the West coast of Florida, the housing market in Tampa is remarkable, as its population is growing 139% faster than the rest of the country. If you’re looking for a rental property investment, Tampa’s average home price is 9% below the national average, while its average monthly rent is only .7% below the national average. This means generating decent cash flow to pay yourself back faster.

St. Petersburg, Florida

Part of the Tampa Bay area, St. Petersburg is known as the Florida hub for art. Its waterfront parks host the Dali Museum, the Museum of Fine Arts and the Mahaffey Theater, home of the Florida orchestra. Regardless of your affinity to surrealist paintings and orchestra concerts, St. Petersburg is ideal for single family home investment properties. According to Redfin, in the last year, the median sale price rose over 26%, the number of homes sold rose over 83% and homes were on the market for a 73% shorter timeframe than last year (8 days vs. 31 days).

Sarasota, Florida

Located south of Tampa and known for its miles of stunning beaches with shallow waters, Sarasota offers some of the best vacation home or rental property investments. Just like the other Florida cities, the real estate market is booming. In April of 2021, inventory was down 87.2% and sale price up 43.4% year-over-year. Not to mention these west coast cities offer unbeatable sunsets over the gulf!

Naples, Florida

About 2 hours south of Sarasota, we find ourselves in Naples. Naples is a quiet oasis of high-end shopping, golf courses and country clubs and miles of white sand beaches. Naples’ single family home median sale price is well above the state average at $500,000, but don’t let the price tag deter you. Demand here also trends above the state average and if sales volume slow, its only due to lack of inventory. Whether it’s a single family home or condo, the value is predicted to continue to appreciate due to the high demand and finite supply making the ideal investment property.

Key West, Florida

Florida’s southern most point, Key West is a unique community that embraces Caribbean culture and gives it a Floridian twist. There is something for everyone whether it be exploring the crystal clear waters with a diving, snorkeling or sailing expedition or taking a stroll down where you can grab a drink and listen to a local band, It is no wonder that this little treasure of a city is a top tourist destination making it the perfect place for a rental investment property.

Key takeaways

Word is out and real estate investing in Florida is booming! The real estate opportunities in Florida are abundant. It is clear regardless of which city you choose to purchase your Florida real estate investment, the market is indicating that properties will continue to appreciate. The best places to invest in real estate in Florida depends on whether you are looking for a single family home, condo or commercial real estate investment. First pick your type then work on narrowing down the many options.