Should You Consider a Rental Property in Florida?

Finding ways to make money is a very popular topic these days. From a few cents to potentially thousands of dollars a month, the internet is flooded with all kinds of ideas.

With the modern options aside, how well do the older money-making businesses, like renting places, fair? Surprisingly well. To be fair, any kind of investing in real estate is smart, but renting takes things to another level.

When it comes to renting, there are two types you’ll often hear people talk about: the short-term ones, aimed primarily at tourists, and the long-term ones, for people looking for a place to live but can’t afford their own.

Being a landlord is a rewarding business, and there are plenty of potential places you can consider for your next rental property. One of those is Florida, so the question is: should you consider it? Well, Florida has a growing population, beautiful weather, and a strong tourism industry, making it an attractive location for rental properties. However, one thing to keep in mind is the potential risk of natural disasters like hurricanes in certain parts of the state. Additionally, buying a house while separated from your spouse or partner can add an extra layer of complexity to the process, so it’s important to carefully consider all factors before making a decision.

Excellent Location

It doesn’t matter if we’re talking about short-term or long-term renting; Florida is one of the most popular states at the moment. It’s been a popular vacation destination for decades.

Tourists look at Florida from two perspectives – the beaches or the cities. Both have their charm, but you’ll need to pick which one you’ll want to go with. Going for a beach house or a condo in one of the larger cities can be a difficult decision, but you’ll need to pick one.

To be fair, if you’re able to get a loan, you might as well consider both for double the profit. There are multiple mortgage options to choose from, so you won’t struggle to find one that suits you the best. Considering everything and looking at the DSCR loan requirements, this would probably be your best bet. It’s the kind of loan aimed at real estate investors.

With the vacation aside, more and more people are moving to this state, and many of those will need a place to stay. They may not be able to afford their homes or don’t want to take that route, which works in your favor.

Even though we’re talking about a rental property, even if you decide to go to a vacation house that you’ll have access to, getting one is a good idea. The value of a property in a place like this won’t go down.

Favorable Climate

Florida is often called the Sunshine State and with good reason. As part of the US where the average temperatures in winter barely drop below 60 degrees Fahrenheit, with the summer ones almost hitting 90 degrees.

This is why it’s a popular vacation destination. The summer months are hot and sometimes humid, but vacationers don’t have to struggle with that too much.

People who decide to live in this state also favor the weather. Yes, they’re not there for vacation-related activities, but that shouldn’t stop them from experiencing the warm climate.

Attractive Taxes

Paying taxes is something none of us can escape, so as a potential rental property owner in Florida, you’ll need to consider this part of the process as well. The good thing is that the taxes are quite acceptable.

The average property tax in Florida is around 0.80%, which is below the country average of almost 1%. In addition to that, rental taxes are also favorable. You’ll need to pay the federal tax, regardless of the state. Speaking of state, unlike some other states, this one doesn’t have a state income tax.

Things to Consider Before Buying Your Rental Property in Florida

Owning a rental property in Florida can be a positive experience and you can make some money from it, as long as you play it right.

Choosing your property based on its location is crucial. Yes, the entire state is popular, but there are some locations that are popular with vacationers. Finding a property in those parts is a good way to be seen on the map and start making money by renting it.

Looking at your budget is also crucial, as it can help you decide which property to get and where. The cheaper places will probably be smaller and in a less attractive location. To get the most out of your purchase, it’s recommended to aim for a nice balance, especially if you have a slightly limited balance.

The rent price will determine how quickly you’ll get your investment back. Naturally, you’d want to list the property with at have a relatively quick return on investment. You may be tempted to do so, but it’s not a good idea.

People who are starting their rental business in a new state will probably need to wait a while before “recommending” prices. For now, your best course of action is to be just a bit more affordable compared with similar listings.