How Much Startup Capital do You Need to Invest in Florida Real Estate

How Much Startup Capital do You Need to Invest in Florida Real Estate

Florida has one of the hottest real estate markets in the country and there are plenty of investors that flock here every year looking for a good deal.  If you’re an investor and you’re wondering how much startup capital do you need to invest in Florida real estate the answer is complicated.  Miami real estate can be pretty expensive while other parts of the state have a much lower barrier to entry.

What are Your Goals

Whether you’re investing in Florida or any other market in the country you need to know what you’re goals are.  Are you looking for a quick flip, rental property or some other type of real estate investment?  Is your goal to sit on property that is going to appreciate or are you after cash flow.  Next you have to take a look at the different areas of Florida and the price ranges in each.  Florida offers a variety of prices so there is something for every level of investor.

Location, Location, Location

You can probably find a property with a price point in and around $100,000, that could be a condo or a single family home that you can rent out and generate some cash flow.  Alternatively you can find property at that price point for a quick flip.  But at this price point you will be away from the coasts and the tourist hotspots.  Some of the smaller towns and communities in the interior of Florida is where you will find deals at that price.

Vacation Rentals

Florida attracts millions of visitors every year and that presents the savvy real estate investor a unique opportunity.  There is big money to be made in vacation rentals.  For vacation rentals you want to look at some of the more populated tourist spots, Miami, Fort Lauderdale, Orlando and Palm Beach.  In Orlando you may be able to find a property in and around the $250,000 range but other communities like Miami or Palm Beach then you can expect to pay $500,000 and more.  Be careful of municipal regulations and homeowners’ associations before you buy a vacation rental property.  If you are unsure how to make money with vacation rentals then here is a guide.

Work with a Realtor

Regardless of where or what type of investment property that you are looking for you will need to find yourself a good realtor that can help you find the right properties.  A good realtor can help you fill your portfolio with the exact type of properties that you are looking for.

The Florida Real Estate Market

The Florida Real Estate Market

Florida is filled with beaches, retirees from around the world and it is one of the hottest vacation destinations in the country.  The Florida real estate market is affected by all of that along with unemployment, taxes and the interest rates on mortgages.  So with the current conditions what does that mean for real estate in Florida for the rest of the year and in 2020?  Let’s have a look at the Florida real estate market and where you should invest.

What’s Happening in 2019

For the past decade every major metro area in the state has seen a jump in the population and that means greater demand for housing.  Greater demand has been driving housing prices up and it will continue to do so.  Housing prices in Florida have risen almost 5% over the previous year.  While the state has seen the population grow the economy is also doing quite well.   The unemployment rate sits below the national average and taxes are also low, Florida is one of the few states with no sales tax making real estate purchases even better. .

Mortgage Rates

If you had asked any expert in 2018 whether mortgage rates would climb in 2019 it would have been a resounding yes, however that didn’t happen.  Mortgage rates at an all-time low and they are predicted to stay that way well into 2020.  You still have plenty of time to get a great deal in 2019 if you shop around.

Housing Prices

The most important aspect that any investor looks at is of course the price.  While housing prices in Florida have been rising for some time it is expected that that growth will slow in the latter half of 2019 and into 2020.  Zillow estimates that housing prices will increase by a little less than 2%.  However the higher end markets like Miami and Fort Lauderdale will see a decline in housing prices.  The highlight of Florida’s market will be in Orlando, Jacksonville and Tallahassee they expect to lead the market growth with prices rising as much as 4%

Nearly half of home sales will go to first time home buyers as more and more millennials are finally entering the market.  Despite the slowdown in housing sales the competition for entry and mid-level priced homes is still going to be stiff.  Investors will have to be quick if they want to strike a bargain.  Sellers have the advantage for the next year or so.