Florida property report – buying a Florida villa and Florida villa rentals

The price of Florida property has risen by 87% in just five years. As with any area experiencing a property boom, there have been dire warnings that the investment value of your Florida villa will collapse for a few years. In fact, capital growth has reached unprecedented levels in some areas and the Florida villa rental market has been exceptionally profitable for investors.

Florida property report – a tourist driven market

If you find the right Florida villa or other home, in the right location, then Florida property can be one of the best housing investments you can make. There are 49 million visitors to Orlando and central Florida annually and the Florida villa rental and second home markets have grown considerably as a result.

In 2005, statewide average house prices passed $200,000 for the first time. The biggest tourist destination in the US continues to grow in popularity, pushing up the price of a Florida villa in the process.

Other factors underpinning the Florida property boom

All the prerequisites of a burgeoning property market; growing job market, low mortgage rates and favourable rates of inward investment, are in place. The popularity of the state as a retirement destination remains undiminished. Over 1000 people relocate to a Florida villa or condo each day and the population demographic of the United States suggests this trend is set to continue.

Investors losing faith in stocks and bonds have seen them turn their attention to Florida property, and Florida villa rental, in particular.

Florida property prices and Florida villa rental returns

Florida property values vary greatly depending on where you are buying. A four-bedroom, three-bathroom Florida villa in Tallahassee will cost around $275,000 whereas a similar property in Key West will cost nearer to $4 million.

The Florida villa rental market is thriving because of the popularity of the sunshine state with tourists and also the growth of commerce-based localities such as Miami. Zoning restrictions on the Gulf and Atlantic coasts have pushed up the price of Florida villa rental in those regions.

The average weekly rent in West Palm beach is $1587 and $1431 in Miami. The lower costs in Orlando, a ready-made tenant base, means it may offer the best investment opportunities in the market for Florida villa rental.

The future for the Florida property market

Florida has a number of the fastest growing property markets in the US with price rises of 36% in Naples and 28% in Orlando in recent years. The growth of the Florida property market has meant there has been a shortage of properties in some areas. This has been met by developers seemingly building a Florida villa on every spare piece of land they can find.

The Florida property market now appears to be experiencing an overall slow-down with less developments being planned and prices growing at a slower rate. Mortgage rates are expected to rise in the future, pushing up the cost of borrowing.

Florida’s popularity amongst tourists and retirees ensures it will retain its investment potential and Florida villa rental still offers some fantastic returns. However, the sky-rocketing prices of Florida property in recent years may be finished and a new era of steady growth arriving.