Tampa is in the middle of the state, part of Central Florida, sitting on the Gulf Coast. It’s metropolitan amenities, beautiful weather and proximity to tourist attractions make it a great place to live. The cost of the houses in Tampa Bay also makes it the best place to buy rental houses and other investment properties.
Last year, Graham Wood wrote an article detailing how foreign investors are buying Florida real estate SITE UNSEEN. While that trend has eased a lot, the deals that drove such care free investing have not.
With rents that have barely risen at all in the last 2 years, Orlando, Fla., is still the most magical place on Earth.
Tourism continues to bolster Orlando’s business and has helped drop the unemployment rate from 11% a 4 years ago to 6.3% today, which is well above the national average. With those kinds of numbers, rentals are easy to fill, even if rents aren’t increasing much.
Florida has plenty of great real estate investment deals left, and Tampa is the hotbed of most of those deals.
Jacksonville, Fla.’s, average rent is up only 1.3% over the last year, and it’s labor and housing market was hammered by the recession. Median housing prices dropped from $174,600 in 2008 to $120,800 today and fell 2.5% in the past year alone. Unemployment has made new buyers a bit scarce as well, with the unemployment rate climbing as high as 11.2% last March before coming back down to 9.7%.
Jacksonville has a fairly stable economic base as home to the third-largest military presence in the country. A submarine base, naval air station, naval station and Marine base provide stability, while rent prices have risen in the past year to help stabilize the rental market even more.
RealtyTrac Vice President Daren Blomquist says Florida’s seesawing housing market — which boomed in the early 2000s, then went bust around 2007 — hit Tampa so hard that the downturn spilled over to Lakeland, a 590,000-population metro area located almost directly between Orlando (56 miles) and Tampa (51 miles).
“A lot of times, ‘exurban’ communities around a really hot area are very affected by a boom and bust,” he says. “There’s a lot of home-building in such places during the boom, but then there’s an oversupply of houses when the bust hits.”
As a result, Lakeland — best known as the Detroit Tigers’ spring-training home — saw foreclosure filings rise 95.7% during 2012.
2.5 hours due east from Tampa, this metro area along the Atlantic coast is home to the Kennedy Space Center — which is fitting, because its market soared toward the moon during the housing boom, then fell back to Earth in the bust.
“You have still some leftover wreckage from the housing bubble — bad loans, a slow foreclosure process and lots of people who are ‘underwater,’” Blomquist says.
The Kennedy Space center has also cut thousands of jobs in the past couple of years or so after the space-shuttle program’s termination, adding to the 540,000-population area’s problems. “A soft underlying job market only aggravates [the Palm Bay region’s] foreclosure problems,” Blomquist says.
With a student body of roughly 50,000 students, and located just 2 hours from Tampa, the University of Florida provides a steady clientele for landlords big and small.
Even though the area has recovered from the housing meltdown, there are still plenty of bargains to be found. Combine that with fairly high rents, and the math for investors is pretty favorable.
The Gainesville-area market, in particular, has been attracting a lot of doctors, attorneys, accountants and other professionals looking to diversify their investment portfolios, according to real estate broker Jay Parrish. There are also parents buying places for their kids who are attending the university.
THE MEANING OF ALL THIS…
Tampa is in the middle of the best real estate markets in the state. That makes the Tampa Bay real estate market the perfect place to buy investment properties to sell or rent.