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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 real estate talk. But in 2023, when interest rates have spiked, and the markets are showing signs of slowdown and seasonality returning, is Miami still the hottest place to own a residential investment property? What about Central Florida’s boom cities Orlando and Tampa? Or are the better deals up north in Jacksonville?

In our third and final installment of market snapshots, BiggerPockets has teamed up with Belong to look at the Sunshine State. If you want guaranteed rent every month in popular cities like Miami, Orlando, Tampa, and Jacksonville—check out if you qualify for BelongX, the new app changing the way residential investors manage their rental homes. 

Only you know your financial situation and what you can take on, so this report is designed to support your research by presenting stats on median pricing, rents, and the current state of the market in Florida. The data published 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 already a favorable state for landlords before the massive pandemic-fuelled migration and spike in home appreciation. But after years of reported rent hikes and affordability issues, is Florida still an attractive option for investors and renters? 

In 2023 so far, the price hikes haven’t deterred eager residents. Between Jan-Mar 2023, Miami, Tampa, and Orlando have all taken out spots in Redfin’s top 10 migration destinations.

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

According to an analysis by MoneyGeek, six out of the 10 best cities for employment are in Florida, with high job and wage growth luring in job seekers. Jacksonville tops the list currently, with wage growth triple the national average. When taking into consideration the price-to-income ratio, Jacksonville, Tampa, and Orlando are the top three best cities for job growth. 

Looking at Florida’s price-to-rent ratio (median home price divided by median rent), most major cities are rated below 15. This rating usually signals that it’s more affordable to buy than to rent. But what this method doesn’t account for is the cost of lending. High interest rates are still pricing out many would-be homeowners, cementing long-term renting as an appealing option in Florida. This is good news for investors and cash buyers who can offset lending costs and take advantage of price drops in local markets. 

Keep 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% on last year, selling for a median price of $560,000. Despite inventory being considerably lower than last year, Redfin says the Miami market is “not very competitive” at the moment, with around 16.4% of homes selling under ask. Zillow lists the median rent in Miami at $3,700, which is $1,500 above the national median. 

Despite declines in house prices at the start of the year, the latest S&P CoreLogic Case-Shiller Indices report that Miami remains the leading market for year-on-year gains among the top 20 cities. Miami homes have increased 10.8% YoY, making it the best-performing city for the seventh consecutive month. 

In fact, price declines are doing little to improve affordability within the market. RealtyHop’s affordability index ranks Miami as the least affordable housing market in April 2023, beating out LA and New York. Affordability is calculated by the average earnings of Miami residents, estimating that potential buyers need to spend 80.46% of their monthly income on the cost of homeownership. That means even as one of the least affordable rental markets, it’s still a better option than trying to break into the buyer’s market for many residents. 

While all homes in the US achieved rapid appreciation with an average of 36.9% in the past three years, homes in Miami have outperformed this with an average appreciation rate of 49.3%. 

Miami numbers at a glance:

• Median house price: $562,000
• Median rent: $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% on last year, selling for a median price of $361,000. Orlando is ranked as a “somewhat competitive” market, with homes selling quickly with an average of 32 days on market—up from the breakneck pace of just eight last year. 

For those turning their attention to the long-term rental market, the median rent in Orlando is $2,192, which is about $47 higher than this time last year and a modest $42 above the national median. 

Though price growth is slowing, those who hold property in Orlando have enjoyed an average appreciation of 51% over the last three years. Like Miami, the price-to-rent ratio sits below 15, but lending costs are tipping the scales to make renting more affordable to those who don’t have a deposit above 20%. 

Orlando snapshot:

• Median house price: $361,000
• Median rent: $2,192
• Price-to-rent ratio: 13.72 
• Average appreciation 2019-2022: 51%

Rental Market Snapshot: Tampa

Tampa has been the winner after South Florida’s price explosion, as people flock to Central Florida to seek more affordable housing. This fuelled its own price growth, with the National Association of Realtors (NAR) reporting Tampa price appreciation of 59.6% in the last three years, well ahead of the US average of 36.9%.

According to the latest S&P CoreLogic Case-Shiller Indices, Tampa is second-only to Miami in terms of price growth, with a 7.7% increase YoY. Redfin reports the median sale price of Tampa homes is currently $409,000, which is up 9% from their figures last year. Like Orlando, Tampa is listed as a “somewhat competitive” market, with houses selling in around 31 days. Those who do invest in Tampa could achieve higher rent than Orlando, with a median rent of $2,295 ($145 above the national median). 

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

When calculating potential cash flow for a residential investment in Florida, it’s important to factor in 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 from First Street Foundation, up to 49% of Tampa properties are at risk of flooding, so it’s important to research your risk and factor in the cost of protecting your assets. 

Tampa snapshot:

• Median house price: $409,000
• Median rent: $2,295
• Price-to-rent ratio: 14.85
• Average appreciation 2019-2022: 59.6%

Rental Market Snapshot: Jacksonville

With high prices in South and Central Florida, what about the North? The median home price in Jacksonville is $295,000, making it a considerably more affordable option for investors. As with the other cities profiled, the National Association of Realtors (NAR) reports that Jacksonville’s price appreciation has outpaced the US average in the last three years, with homes increasing in value by 50.5%.

Zillow lists the median rent in Jacksonville at $1,750—less than half of the median rent in Miami. But there is still an opportunity to achieve cash flow here, thanks to a growing job market and the lure for those who can’t afford sky high rents. Jacksonville is enjoying low unemployment (2.1%) and strong job growth (5.7%). Paired with rents that are $400 below the national median and the city makes a strong case for migration, attracting new residents to fill rental vacancies.

Like Tampa, be sure to calculate the cost of protecting your Jacksonville investment from flood damage. FEMA has estimated that each inch of flooding on your property can lead to $25,000 in damages, so flood insurance is a must-have. 

Jacksonville snapshot:

• Median house price: $295,000
• Median rent: $1,750
• Price-to-rent ratio: 14.04
• Average appreciation 2019-2022: 50.5%

How Real Estate Investors Can Keep a Pulse on the Florida Rental Market

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

From ebooks to podcasts, BiggerPockets offers educational resources for every level of real estate investment 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 want to self-manage your properties. From guaranteeing rent to credit reporting and insurance, Belong has modern solutions for a market that is changing daily. 

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

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.