Real Estate Investing in Florida: The Best Cities for Flipping vs. Renting

by Asset Based Lending | Jul 16, 2019 | 0 comments

When searching for the right location and real estate market to invest in, there are many factors to consider—availability, affordability, profitability, as well as economic strength and promise.
With insight into Florida’s past, present, and future local markets, ABL’s Florida area manager, Paul Lewis, helped pinpoint optimal cities for investors to fix and flip or renovate to rent.
Below we break down the most profitable and desirable cities for real estate investors in Florida—and if they should fix and flip or rehab and rent:

Where To Fix & Flip In Florida

Tampa

Sitting along the Gulf of Mexico, this hip and rapidly growing city is one of our top picks for fix and flips because of its 7.3% home flipping rate in 2018 and its $130 billion economy. Last year, Tampa was ranked the 10th best for flips out of 171 total U.S. cities. This metropolis has a median home price of $219,000—affordable for investors even after an increase of 3.8% over the past 12 months—and a median household income of $43,359.
The job market has also increased by 2.3% thanks to the growth of economic sectors such as healthcare and social assistance (making up 13.7% of the population), retail trade (11.0%), and finance and insurance (7.6%). Even more appealing to potential buyers is Tampa’s 7.0% sales tax rate which is lower than the national rate of 7.3%. With an annual population growth of about 2%, Tampa is quickly becoming an extremely popular real estate market.

Q4 2018 Home Flipping Rate (% of Sales)	7.3%
Number of Flips	31
Flipping Gross Profit	$25,500
Average Days to Flip	185
Gross ROI	62%

St. Petersburg

Located 20 miles southeast of Tampa, St. Petersburg is another great real estate market to fix and flip in along the west coast of Florida. Not only does this city have a similar job market increase and sales tax rate to Tampa, but it also has a median home price of $216,500—an increase of 3.2% since last year.
The St. Petersburg job market focuses primarily on healthcare and social assistance (making up 16.4% of the population), retail trade (12.6%), and food services (9.2%), which plays into the $44,318 median household income. The 21 homes fixed and flipped in the “Sunshine City” during 2018 produced an average gross profit of $106,000 for investors, which was the 9th highest out of all other Florida cities.

Q4 2018 Home Flipping Rate (% of Sales)	5.1%
Number of Flips	21
Flipping Gross Profit	$106,000
Average Days to Flip	228
Gross ROI	38%

Naples

Home to Everglades National Park along with many other ecotourism hot spots, Naples is third on our list of best Florida fix and flip cities. This coastal city attracts many tourists but is also historically known for its real estate development—with a current flipping rate of 4.5% and only a 6.0% sales tax. On average, a home in Naples goes for $319,000 and the median household income is around $55,111.
The city’s job market has grown 0.9% in the last year and mainly varies from healthcare (making up 12.8% of the population) to retail trade (11.9%) to, of course, real estate (11.8%). And 81% of the Naples population is made up of homeowners which means there is great potential for buying and selling.

Q4 2018 Home Flipping Rate (% of Sales)	4.5%
Number of Flips	22
Flipping Gross Profit	$42,000
Average Days to Flip	225
Gross ROI	7%

Where to Buy Rehab & Rent In Florida

St. Augustine

On Florida’s northeastern coast lies St. Augustine. This mainly suburban area has seen 2.8% total job growth within the past year and has a median household income of $53,750. The majority of the job market includes careers in hospitality and food services (making up 19.9% of the population), retail trade (12.5%), and educational services (10.7%).
However, what makes one of the United States’ oldest cities stand out as a great place to buy rental property is its 1.3% vacancy rate, which is far below the national rate of 2.1%. This low percentage of vacant properties indicates higher than average demand for rentals in St. Augustine.

Rental List Price	$1,712
Rent Index	$1,664
Median Home Price	$257,100
Vacant for Rent	1.3%
Median Household Income	$53,750

Tampa

Tampa is back again. Not only is this city great for fix and flips, but it is also an ideal spot for purchasing rental property— with renters making up 43.9% of the population. In addition, Tampa has a median monthly rental price of $1,461, ranging from $951 for a studio to $1,984 for a 4-bedroom apartment. When it comes to both renting and selling in Florida, Tampa takes the cake.

Rental List Price	$1,650
Rent Index	$1,461
Median Home Price	$219,000
Vacant For Rent	3.0%
Median Household Income	$43,318

Orlando

Orlando is known for its big attractions like Walt Disney World and Universal Studios, but it is also known as one of Forbes’ top 3 Florida cities to own rental property in. In the past year, Orlando’s population has increased by 2% and its job market has grown by 4.3%. Like almost every other city listed, the majority of careers fall into hospitality and food services (making up 14.4% of the population), retail trade (12.6%), as well as healthcare and social assistance (12.4%).
However, more importantly for investors, rents have grown by about 2.3% in the past 12 months as well, bringing the median monthly rental price to about $1,448. Plus, renters actually make up 52.5% of the Orlando population.

Rental List Price	$1,600
Rent Index	$1,448
Median Home Price	$241,700
Vacant For Rent	4.9%
Median Household Income	$42,409

The ABL Perspective

With advice from our local loan officer, we were able to identify six Florida cities ripe for real estate investing. Three were best suited for fix and flips: Tampa with its high flipping rate, St. Petersburg with its high gross profit, and Naples with its high percentage of homeowners. Florida’s cities best suited for a buy rehab and rent strategy included St. Augustine with its low rental vacancy rate, Tampa with its property duality, and Orlando thanks to its large renter population.
Overall, Paul’s main real estate rule of thumb: be weary of Florida’s east coast—or at least cities that have a lot of new construction. Whether you are looking to fix and flip or hold and rent, an abundance of recently-built property sitting on the market should raise a red flag for prospective investors.
Currently, Florida’s west coast is more active when it comes to fix and flips and renovated rentals because of the large quantity of longstanding property. With the exception of St. Augustine and Orlando, the west coast seems to provide greater opportunity for investors.
For more information regarding taking advantage of Florida’s exciting real estate market with a hard money loan, give us a call at 201-942-9089 or pre-qualify today.