Florida has long been a popular destination for real estate investors looking to buy rental properties. The sunny climate, beautiful beaches, and booming tourism industry make Florida an ideal location for both short-term vacation rentals as well as long-term residential rentals. When searching for the best places to buy rental property in Florida, there are several key factors investors should consider. Location, population growth, job growth, median rents, and housing affordability all play an important role in determining which Florida cities offer the highest returns on investment property. Taking these factors into account, here are the 10 best places to buy rental property in Florida for 2023:
1. OrlandoOrlando tops the list as one of the best places to buy rental property in Florida. Fueled by tourism to popular attractions like Walt Disney World and Universal Studios, Orlando has experienced rapid population growth averaging 2% annually over the past decade. The metro area now has over 2.6 million residents. This population boom has led to strong demand for rentals. Orlando’s median rent for a 1-bedroom unit is $1,295. With high occupancy rates, investors can expect strong cash flow from Orlando rentals. The market is dominated by single-family homes, townhomes and condos making Orlando ideal for out-of-state investors.
2. TampaCombining affordable housing with steady population gains, Tampa emerges as an excellent market for rental property. The Tampa metro area has added over 362,000 new residents since 2010 for a growth rate of 1.7% per year. Tampa real estate also remains relatively affordable compared to other Florida cities. The median home price is $259,000. With the median gross rent around $1,550 for Tampa rental properties, investors can secure attractive cap rates. The market has a balanced mix of single-family homes and multi-family options.
3. JacksonvilleBenefiting from its large size as Florida’s most populated city, Jacksonville offers investors several desirable neighborhoods to target for rental property. The metro population now tops 1.6 million residents. Jacksonville real estate is very reasonably priced with median home values around $235,000. Rents are also affordable at a median of $1,480 for a 3-bedroom rental unit. Investors will find the most inventory among single-family homes in Jacksonville. With steady 1% annual population growth, demand should remain strong.
4. Cape CoralLocated along Florida’s Gulf Coast in the growing Fort Myers region, Cape Coral has emerged as a top destination for rental property investors. The city has experienced rapid expansion of its residential housing market in recent years. The population of Cape Coral has doubled since 2000. Cape Coral offers investors affordable home prices, with medians around $322,000. The median rent is very reasonable as well at $1,500 per month. Demand comes from the city’s popularity among families, retirees relocating to the warm climate and tourism. Single-family homes and duplexes are most common.
5. Palm BayAnother affordable option for rental property is found along Florida’s Atlantic Coast in Palm Bay. With population growth outpacing the rest of the state in recent years, Palm Bay has seen housing demand rise. Located just south of Melbourne and north of West Palm Beach, the city benefits from its central location. Palm Bay median home prices are around $259,000 currently. Average rents are also lower than other Florida cities at $1,345 per month for a 3-bedroom rental. Investors will find mainly single-family homes, townhomes and duplexes available. Strong projected population growth should keep rents rising.
6. DeltonaConveniently situated between Daytona and Orlando, Deltona has many positive attributes for real estate investors targeting the rental market. Home prices are reasonable with medians near $268,000. Average rents are affordable at $1,350 per month. Deltona has exhibited strong population growth over the past decade, expanding by over 20%. The demand for rentals remains robust as new residents flock to the area for its quality of life and business-friendly environment. Single-family homes make up much of Deltona’s rental housing stock.
7. Pembroke PinesIn South Florida’s Broward County, Pembroke Pines stands out as an affordable suburb relative to neighboring Miami. The median home price of $380,000 is well below Miami. Rental demand is strong with medians around $1,750 per month for a 3-bedroom unit. Pembroke Pines has a well-balanced housing market featuring modest single-family homes, upscale golf communities and multifamily apartment complexes. The area appeals to young families and retirees alike. With little land left for new development, existing rental properties benefit from limited housing supply.
8. Palm CoastLocated along the northeast Atlantic coast between Daytona and St. Augustine, Palm Coast is a hidden gem for rental property. Home prices are affordable at a median of $305,000. Average rents are also lower than other cities on this list at $1,350 per month currently. Palm Coast has exhibited stellar population growth of over 40% since 2000. Retirees are attracted to its climate, golf courses and proximity to the beach. Strong projected growth should continue to support demand for rentals going forward. Single-family homes and townhomes are most prevalent.
9. KissimmeeKissimmee borders Orlando to the south and shares in the region’s fast-paced growth due to Disney World and other theme parks. Rental property investors benefit from Kissimmee’s affordable housing prices and close proximity to major employment centers. With median home values around $300,000, Kissimmee is more reasonably priced than Orlando while still offering convenient access. Average rents are on par with Orlando at $1,300 per month for a 3-bedroom unit. Investors will find a mix of single-family homes, townhomes and multi-family condos available.
10. Port St. LucieRounding out the list is Port St. Lucie, located along Florida’s east coast in St. Lucie County. Strong population growth over the past decade has boosted housing demand. The city’s median home price is $335,000, while average rents go for $1,500 per month. Port St. Lucie offers investors relatively affordable real estate prices compared to more expensive coastal cities in South Florida. There is a good mix of single-family and multifamily rentals available. With its business-friendly environment and recreational amenities, demand should remain high.
Buying Tips for Florida Rental PropertyWhen searching for the best places to buy rental property in Florida, keep these tips in mind:
- Target areas with sustained population and job growth to ensure ongoing rental demand. Avoid seasonal markets dependent on tourism.
- Seek out affordable cities where cap rates and cash flow will be strongest. High priced markets squeeze returns.
- Focus on neighborhoods popular with families and retirees who make up the bulk of Florida’s renters.
- Evaluate the mix of single-family homes, townhomes, condos and apartments in your chosen market. Diversity helps mitigate risk.
- Run the numbers to calculate your total monthly expenses for any prospective rental to confirm the cash flow works.
- Inspect all homes thoroughly yourself before purchasing – don’t trust sellers’ claims or cosmetic fixes.