Millions of Americans can't afford to own homes, which is why there will always be an active rental market. And many real estate investors flock to Florida hot spots like Miami, where rental units are perpetually in demand. But new research from Millionacres reveals that it could pay to stick to the northern part of the state if you're looking at income properties -- specifically, the Crestview–Fort Walton Beach–Destin area.
It pays to branch out in Florida
Though many real estate investors who choose to buy property in Florida favor metros like Miami or tourist hotspots like Orlando, the Crestview–Fort Walton Beach–Destin area ranks fifth on Millionacres' list of the hottest rental markets in 2020, and for good reason.
Employment increased over 46% between October 2014 and October 2019 in Crestview, making it the metro area with the single largest spike in job growth. Meanwhile, the median home price in Crestview is $176,000 -- much lower than the median home price of $237,100 state-wide. And the average rent for an apartment in Crestview is $1,193, representing an 11.82% increase from the previous year.
Fort Walton Beach has affordable housing as well, with a median home price of $188,600 -- again, well below Florida's average. And the average rent for an apartment in Fort Walton Beach is $1,074.
That said, properties are much costlier to acquire in Destin than in the rest of the state, with the median home price being $376,300. In fact, the cost of living in Destin is higher than that of the national average. But rents are much higher, too, with the average apartment in Destin going for $1,816 a month. That's nearly an 18% increase from the previous year.
Furthermore, the vacancy rate among apartment rentals in the Crestview–Fort Walton Beach–Destin area is 3.6%. That's well below the national vacancy rate for rentals -- 6.8%.
Make money in the Sunshine State
Renters old and young flock to Florida for its great weather and wonderfully absent state income tax. If you're looking to buy an investment property, it pays to consider the northern part of the Sunshine State, as you may find that the Crestview–Fort Walton Beach–Destin area is an overwhelmingly profitable choice.
Not only is there demand for rental units in the area, but it's also a popular tourist destination. Payroll in the leisure and hospitality industry alone has increased 34% since 2010, which means if you buy in the area, you'll have an opportunity to make money not only from long-term renters but from short-term renters as well.