6 reasons why building a home in Florida is a great investment

1. Florida is a great place to live and continues to grow

Investment is all about location, and Florida has been blessed with amazing weather year-round. The mild temperature helps keep the state lively, and even in the middle of winter there are plenty of cultural activities and natural attractions to visit.

Regardless of your interests or age group, there’s always something to do in Florida.  Our area, west central Florida, attracts all sorts of people: retirees looking for affordable living, golfers wanting to play year round on the many courses, and people of all ages who can enjoy the many attractions of the Nature Coast and theTampa Bay Area. For Florida investors, this means the state is consistently growing, and its attractiveness will stay stable: everyone wants to spend a few sunny days in Florida as soon as the weather up north turns wintery.

In line with being a great place, Florida’s economy has remained growing and very attractive. According to a 2022 CNBC report, Florida is among the top states for business [2] because of its relatively low unemployment rate, consistent growth in employment and relative affordability [3].

As we mentioned above, even after the 2020 pandemic Florida has remained economically strong, and is set up to achieve pre-2020 numbers (both in visitors and in economic stats) by 2023. This is a feat not many states have been able to claim, and speaks volumes as to the strength of the Floridian economy.

3. A home is a tangible asset

A home is a tangible asset that is more protected from normal market fluctuation than market investments. It is also an investment you can actually use while growing equity, so it serves a double purpose. One of the best aspects of investing in tangible assets (like a home), is that you can easily increase its value by making a few renovations. Simple features such as a new bathroom remodel or adding a bedroom can really pay off in the long term.

4. You get tax breaks

In the US, owning an investment property comes with a few tax advantages that can definitely lower your payments. Since owning an investment property is a source of income, you can actually deduct many of the major expenses from owning a home. As such, mortgage interest, property fees, insurance, property taxes and even repairs can be deducted from your tax declaration.

And, if you sell your home for a profit, the gain cannot be taxed as income but as capital gains. Capital gains usually have a lower tax rate so that’s even more savings for you [4].

On top of the usual tax benefits, Florida is one of the few states without a personal income tax, making it a favorite among retirees wishing to stretch their income without sacrificing comfort.

5. Owning a home gives you security and stability

Investing in real estate is a great way to invest in the long-term. This means you can keep your investment for several years and it can appreciate over time. Owning an investment property also provides a stable income that will pay for the mortgage. You can also do room rentals or rent to a group to increase income and pay the mortgage faster: take a look at this amortization calculator to see the amortization rate of your mortgage.

With a mean appreciation rate of around 5% per year, [5] owning an investment residential property is a great way of ensuring your family’s future without worrying about sudden unemployment.

Part of Florida’s allure is the strong tourism all around the state. According to official stats, more than 100 million tourists visit the entire estate every year. Even after the pandemic visitors have increased: in 2021 around 122 million visitors came to the sunshine state [5].

The constant influx of visitors means there’s a consistent need for rental properties, which attracts investors and creates an active real estate market. Building a home designed to facilitate an enjoyable vacation and to access local attractions will be easy to market on Air BnB or VRBO.  Such a solid investment will not only appreciate as the years go by, you and your family will be able to enjoy a property in a sought-after location with plenty of demand in the meantime. Property investment can get you one step closer to a worry-free, financially stable life, and building a home in Florida is a great option.

Three more things to keep in mind about building a home in Florida

So you think this is a good option for you? Here are the basics to consider.

Location is key

Although the entire state is a great place to invest in, some cities and suburbs are more active than others. Depending on what you envision your investment property to be, you’ll have a better chance with specific locations over others. Whether a city is more walkable, offers more nightlife or is closer to the beach might all lead to different choices and possibilities. Doing your research here is key.

Go with a new build

New residential constructions are your best option when investing in Florida real estate. A new building is subject to the most updated code, and as we’ve seen before, buildings that follow it have a better chance against hurricanes and storms. New buildings also command higher rents, making your return on investment even higher.

Find a trusted custom home builder

Of course, getting a trusted custom home builder is your best option to ensure the entire process goes as smoothly as possible. Especially if this is your first time doing a custom build, an experienced local builder will be able to offer targeted advice and handle most of the paperwork for you. And knowing you can trust them to do a good job is one less thing to worry about.

References

1. https://www.cnbc.com/2022/07/13/top-states-for-business-2022-florida.html
2. https://www.usnews.com/news/best-states/florida
3. https://www.rocketmortgage.com/learn/benefits-of-real-estate-investing
4. https://moneytips.com/what-does-home-appreciation-mean/
5. https://www.visitflorida.org/resources/research/research-faq/