Are Florida Houses Cheap for Investing in 2022?
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As home prices increase across the US, investors cannot find good investment opportunities. That’s why you should consider Florida houses.
Table of Contents
- Are Florida Houses Cheaper Than Other US States?
- 5 Reasons Why Florida Houses Are Cheaper
- Top 10 Cities With the Lowest Median Property Prices
- To Recap
In this article, we will look into all of the reasons why houses for sale in Florida are less expensive than in other surrounding states. We will also explore why these homes for sale in Florida could be great investment opportunities. Lastly, we will discuss the top cities in Florida with the lowest median property prices.
Are Florida Houses Cheaper Than Other US States?
All throughout the United States, property prices continue to rise in 2022. With this increase in median house prices, it can be more difficult for investors to find successful properties. But even though prices continue to increase in other states, Florida houses continue to stay relatively low.
Mashvisor’s latest data shows that the median property price for houses in Florida is $686,642. Though to some this number may appear high, it actually is quite low compared to most other states. Below are some other US states and their median property prices:
- Alabama – $770,777
- Arizona – $754,536
- California – $1,162,820
- Colorado – $973,123
- DC – $754,434
- Idaho – $796,283
- Massachusetts – $895,543
As you can see from the Mashvisor data above, many other states have much higher median property prices than houses in Florida for sale. This makes Florida houses great for real estate investing.
Related: Top 10 Cheapest Places to Buy a Home to Invest in
5 Reasons Why Florida Houses Are Cheaper
Now that we have reviewed the data and can see that Florida houses for sale are much cheaper than other states’ properties, we will look into why this is the case.
1. Insurance and Property Taxes
One of the first reasons that the median property prices for Florida houses are cheaper than in other states is because, in some areas, the insurance and property taxes are very high. Florida is known to experience unstable weather conditions throughout the year. Different natural disasters like tornados, hurricanes, sinkholes, and severe thunderstorms are prone to happen in this state.
Due to these questionable weather conditions, insurance and property taxes for Florida houses tend to be higher than in other states, especially in the cities and towns near the coast of Florida. Property prices are therefore lower to sort of offset the insurance and property taxes.
Related: How to Check Property Tax History Before Buying
2. Lots of Underdeveloped Lands
Even though you can find plenty of Florida real estate available along the coastline and shore, there is actually a lot of underdeveloped land in the middle of the state. Developers have been purchasing these plots for cheap and building new properties. This helps the rural areas of Florida become more urbanized.
This is also a great opportunity for investors. While houses on the coast may be a little pricy, purchasing and developing your own property can be a great way to make money in real estate. These properties can then be used for traditional or Airbnb rentals, or you can even sell them to make a quick profit.
3. Lower Median Income
Median property prices in Florida are lower than in other states due to the fact the median income in Florida is also lower than in other states. In the real estate market, Florida houses cannot be too expensive, or else the average buyer wouldn’t be able to afford any property. Keeping prices low in the area can make homeownership more obtainable.
Investors can capitalize on these cheaper property prices for Florida homes for sale to increase their profits. Purchasing a property in Florida will be less expensive than in other states, and therefore create more of an opportunity to generate a higher return on investment.
4. Smaller Houses
Florida houses also tend to be smaller in size than other homes in different states. As these properties are smaller, median property prices will be lower as well. Additionally, houses for sale in Florida tend to be older homes. This factor contributes to the lower property prices as well.
Investors can capitalize on these smaller homes. You will be buying listings for a lower price with the opportunity of generating a high income.
5. Large Supply of Properties
Generally, there is typically a large supply of properties available in the housing market. This makes the houses less expensive, as there are more to choose from, and makes finding a Florida investment property easier. The property supply in Florida always has many kinds of income properties for investors to choose from.
Top 10 Florida Cities With the Lowest Median Property Prices
Investors considering Florida for their next investment property should look at these 10 cities for their low property prices, according to Mashvisor’s latest data.
1. Citrus Springs
- Median Property Price: $268,746
- Average Price per Square Foot: $180
- Monthly Traditional Rental Income: $1,724
- Traditional Cash on Cash Return: 5.12%
- Traditional Cap Rate: 5.28%
- Price to Rent Ratio: 13
- Monthly Airbnb Rental Income: $2,993
- Airbnb Cash on Cash Return: 7.41%
- Airbnb Cap Rate: 7.64%
- Airbnb Daily Rate: $173
- Airbnb Occupancy Rate: 59%
- Walk Score: 21
Located in Citrus County, Citrus Springs is just a few miles east of the coast of the Gulf of Mexico. This town has one of Florida’s lowest median property prices at $268,746. It has low crime and mild winters, so rental investors can easily find tenants for their Florida houses.
According to Mashvisor’s latest data, the listing price of available Florida houses in Citrus Springs range from $279,000 to $512,000.
2. Hialeah
- Median Property Price: $326,567
- Average Price per Square Foot: $271
- Monthly Traditional Rental Income: $1,999
- Traditional Cash on Cash Return: 4.05%
- Traditional Cap Rate: 4.17%
- Price to Rent Ratio: 14
- Monthly Airbnb Rental Income: $2,725
- Airbnb Cash on Cash Return: 4.52%
- Airbnb Cap Rate: 4.66%
- Airbnb Daily Rate: $137
- Airbnb Occupancy Rate: 63%
- Walk Score: 73
This city is located in Miami-Dade County, just a few miles away from Miami. Hialeah borders the Atlantic Ocean and is also just a few miles away from one of the most popular beaches in Florida, Miami Beach. This city has a median property price of $326,567, which would be great for Airbnb investors. You will never have a problem finding renters for your Hialeah Airbnb.
3. Lake Placid
- Median Property Price: $330,714
- Average Price per Square Foot: $221
- Monthly Traditional Rental Income: $1,517
- Traditional Cash on Cash Return: 3.55%
- Traditional Cap Rate: 3.66%
- Price to Rent Ratio: 18
- Monthly Airbnb Rental Income: $2,664
- Airbnb Cash on Cash Return: 4.96%
- Airbnb Cap Rate: 5.11%
- Airbnb Daily Rate: $180
- Airbnb Occupancy Rate: 50%
- Walk Score: 50
Lake Placid is located in Highlands County. This town borders some of Florida’s lakes, offering travelers the experience of swimming in warm waters without the crowds. With a median property price of $330,714, Florida houses in Lake Placid are very affordable to investors.
4. Dundee
- Median Property Price: $335,167
- Average Price per Square Foot: $221
- Monthly Traditional Rental Income: $1,455
- Traditional Cash on Cash Return: 2.46%
- Traditional Cap Rate: 2.52%
- Price to Rent Ratio: 19
- Monthly Airbnb Rental Income: $4,247
- Airbnb Cash on Cash Return: 8.52%
- Airbnb Cap Rate: 8.73%
- Airbnb Daily Rate: $113
- Airbnb Occupancy Rate: 79%
- Walk Score: 37
Located in Polk County, Dundee looks like a great location for an Airbnb rental property. With a median property price of $335,167 and an Airbnb cash on cash return of 8.52%, Dundee can be a profitable location.
5. Deltona
- Median Property Price: $336,229
- Average Price per Square Foot: $210
- Monthly Traditional Rental Income: $1,560
- Traditional Cash on Cash Return: 2.98%
- Traditional Cap Rate: 3.06%
- Price to Rent Ratio: 18
- Monthly Airbnb Rental Income: $3,233
- Airbnb Cash on Cash Return: 5.96%
- Airbnb Cap Rate: 6.11%
- Airbnb Daily Rate: $137
- Airbnb Occupancy Rate: 71%
- Walk Score: 27
This city located in Volusia County has a median property price of $336,229. Deltona is very close to popular coastlines such as Daytona Beach, making it a desirable spot for a vacation rental. Investors can generate huge profits here
6. Fort White
- Median Property Price: $352,523
- Average Price per Square Foot: $232
- Monthly Traditional Rental Income: $1,609
- Traditional Cash on Cash Return: 2.95%
- Traditional Cap Rate: 3.02%
- Price to Rent Ratio: 18
- Monthly Airbnb Rental Income: $3,023
- Airbnb Cash on Cash Return: 5.31%
- Airbnb Cap Rate: 5.45%
- Airbnb Daily Rate: $121
- Airbnb Occupancy Rate: 51%
- Walk Score: 34
One of the cheapest towns to purchase investment properties in is Fort White. This town is located in Colombia County and has a median property price of $352,523. With great Airbnb rental data, investors can take advantage of short term vacation rentals in Fort White.
7. Deland
- Median Property Price: $388,216
- Average Price per Square Foot: $210
- Monthly Traditional Rental Income: $1,858
- Traditional Cash on Cash Return: 3.26%
- Traditional Cap Rate: 3.34%
- Price to Rent Ratio: 17
- Monthly Airbnb Rental Income: $4,440
- Airbnb Cash on Cash Return: 7.61%
- Airbnb Cap Rate: 7.79%
- Airbnb Daily Rate: $149
- Airbnb Occupancy Rate: 70%
- Walk Score: 2
Deland is another great location for investors. This city is located in Volusia County and has a median property price of $388,216. Investors can purchase these listings to use as either traditional or Airbnb rental properties.
8. Mount Dora
- Median Property Price: $469,079
- Average Price per Square Foot: $240
- Monthly Traditional Rental Income: $1,550
- Traditional Cash on Cash Return: 1.89%
- Traditional Cap Rate: 1.94%
- Price to Rent Ratio: 25
- Monthly Airbnb Rental Income: $3,217
- Airbnb Cash on Cash Return: 4.07%
- Airbnb Cap Rate: 4.16%
- Airbnb Daily Rate: $151
- Airbnb Occupancy Rate: 54%
- Walk Score: 66
Florida houses in Mount Dora have a median property price of $469,079. Investors can capitalize on these low prices and generate a passive income with Airbnb properties in this city. With Airbnb returns above 4% and an occupancy rate of 54%, you will have no problem finding guests here.
9. Niceville
- Median Property Price: $522,771
- Average Price per Square Foot: $254
- Monthly Traditional Rental Income: $1,965
- Traditional Cash on Cash Return: 2.59%
- Traditional Cap Rate: 2.64%
- Price to Rent Ratio: 22
- Monthly Airbnb Rental Income: $4,677
- Airbnb Cash on Cash Return: 6.08%
- Airbnb Cap Rate: 6.19%
- Airbnb Daily Rate: $173
- Airbnb Occupancy Rate: 53%
- Walk Score: 45
Located in Okaloosa County, Niceville has lower property prices of around $522,771. Investors seeking Airbnb properties should look to this Florida city. With a cap rate of 6.19%, Airbnb investors will see a great rate of return in this city.
Related: The 2022 Guide to Investing in Airbnb Florida
10. Newberry
- Median Property Price: $527,958
- Average Price per Square Foot: $246
- Monthly Traditional Rental Income: $2,351
- Traditional Cash on Cash Return: 3.21%
- Traditional Cap Rate: 3.27%
- Price to Rent Ratio: 19
- Monthly Airbnb Rental Income: $3,156
- Airbnb Cash on Cash Return: 3.40%
- Airbnb Cap Rate: 3.48%
- Airbnb Daily Rate: $163
- Airbnb Occupancy Rate: 54%
- Walk Score: 52
Lastly, Newberry has a median property price of $527,958. With both good metrics in traditional and Airbnb properties, any kind of rental will be successful in this city.
To Recap
If you are an investor wondering how to invest in real estate, a good place to start would be to look at Florida properties. Any investor should consider Florida houses for their next real estate investment property due to lower median property prices. Not only is there a large profit to be made just from the low property prices, but metrics such as cap rate and cash on cash return show high profit potential for all rental properties in Florida.
While the housing market can be difficult, Mashvior helps investors with all aspects of real estate investing. We use only the most accurate data from sites such as the MLS database and Airbnb and make it easier to understand. Our algorithms filter through all of these sites’ data and use only the most profitable and successful properties our users will love.
To get access to our real estate investment tools, click here to sign up for a 7-day free trial of Mashvisor today, followed by 15% off for life.
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