Lately, there has been outcry concerning the escalating apartment rents in Florida. The huge concern has made some investors wary about investing in real estate in Florida. The area where this trend has been quite noticeable is South Florida. Some apartments now cost 8 percent more to rent than what tenants had to pay a year ago. Experts in the property market say that the increases are difficult to sustain over the long term.
The last sentence on the first paragraph is what is making investors a worried lot. After all, most investors want to know that their investments are able to hold strong for the long-term. Many investors are interested in investing for the long-term. Any investment that seems capable of fluctuating or causing massive losses within the short-term makes the investors a bit jittery. In South Florida, vacancy rates now stand at 4 percent, thus cause for more concern.
Favorable to Investors
For many years, the rental market has been biased towards landlords or property owners. For this reason, it might be a good idea on your part to delve into real estate in Florida. However, you also have to think about your tenants. After all, if you want to invest in an apartment, you want tenants to come in and live in it. If you disregard what the tenants think, you could end up with an apartment that remains unoccupied for several months in a year, thus denying you revenue.
Increased Demand on Renters
The construction of new houses in Florida fell drastically during the recent recession. The effects of the drop in construction continues to be felt to date. Former homeowners have also reemerged, thus putting more demand on renters. People who sold their property and relocated elsewhere are now back. The fact that the Florida economy is doing relatively well has also convinced more renters to come into the Sunshine State aiming to better their lives.
Young Adults Can’t Afford New Homes
The fact that young adults appear unwilling to bother themselves looking for a home to buy has led to the huge demand for apartments, hence the increased rents. Many young adults are simply unable to afford a new home. Therefore, such adults are only interested in renting the local apartments. Consequently, when considering the right kind of real estate in Florida worth investing in, you might be better off placing apartments at the top of your list.
Slow Wage Growth
Despite the Florida economy doing relatively well, this has not translated into rapid growth in wages for those with jobs. This has made South Florida one of the least affordable locations for renters in the United States. As a side note, the costliest rental market in the US is in San Francisco. Developers continue putting up more rental apartments in South Florida, thus the more reason for joining them.
Finally, the fact that apartment rents are increasing in Florida should not make you fear investing in real estate in Florida. The Sunshine State is still a favorable location for investing in real estate. The property market in Florida offers a great return on investment. You cannot go wrong with the decision to buy property in Florida. In fact, your decision will soon prove wise and profitable.