Tampa Real Estate Market 2020: Where to Invest
If you’re considering buying a house or an investment property in Tampa, you might be wondering how the Tampa real estate market is right now. Over the past years, Tampa has been gaining popularity owing to its hot housing market that attracts real estate investors.
Last year, it ranked among the 10 best places to invest in real estate in the PwC’s Emerging Trends in Real Estate Report. For 2020, it dropped to number 11 on the list, but this shouldn’t stop you from invest in Tampa real estate this year. In this blog, we break down the top 5 reasons to buy property in the Tampa housing market. We’ve also conducted a Tampa real estate market analysis using Mashvisor’s data to bring you a list of the best neighborhoods where you’ll find the best Tampa investment opportunities.
#1 Tampa Real Estate Prices Are Going Up
The prices of residential properties in Tampa are growing at a fast pace. When looking at the real estate market trends – mainly the imbalance of supply and demand – it makes sense why the Tampa, FL housing market is heating up and why there’s upward pressure on home prices. Still, even with this price increase, Tampa is still affordable compared to a majority of other cities in the state and across the country. According to Redfin, the median price of Tampa homes for sale currently listed is $275,000 (12.2% increase since last year). This is lower than the median list price in the Florida housing market ($345,000) and the national median ($303,895).
The fact that home prices in Tampa are affordable but going up tells us that the Tampa real estate market 2020 is enjoying some good appreciating. For real estate investors, this means now is the time to buy Tampa investment properties and keep them for some time before selling them at a higher price. Want to search for cheap homes for sale in Tampa, FL? Use the Mashvisor Property Finder to set your budget and other investment criteria. The tool will then find lucrative real estate investment properties that match your criteria in a matter of minutes! Sign up for a free Mashvisor account to get started.
#2 Mortgage Interest Rates Are Low
One of the best benefits for real estate investors today is that mortgage interest rates are at an all-time low in 2020. And Florida ranks in the 10 states with the lowest mortgage rates this year! In Florida, the 30-year fixed mortgage rate is 3.48% and the 15-year fixed mortgage rate is 2.82%. Low rates combined with the affordability of the housing market in Tampa Florida mean investors can stretch their budgets and have the chance to find great real estate deals for reasonable prices. If you’re financing a Tampa investment property with a mortgage that comes with a lower rate, this will result in a shorter repayment period, lower monthly expenses, and an overall higher rate of return in real estate.
#3 Tampa Enjoys a Booming Economy
The next reason to invest in the Tampa real estate market is the fact that the city is a fast-growing metro area with a strong economy. Tampa is the 3rd largest city in the State of Florida after Miami and Jacksonville. The city is part of Tampa Bay which is a densely populated metropolitan area with a population of over 3 million people. There’s a lot going on in Tampa that attracts people to live there including low income and property taxes, no estate taxes, warm weather, and incredible recreation and beaches. Its diverse and strong economy is another reason why the Tampa housing market trends are positive in 2020.
Tampa’s local economy is worth over $130 billion and the metro area is the second fasted growing in Florida. Over 19 firms are headquartered here and it is home to four Fortune 500 companies. In addition, Tampa has a very diverse economy with industries like financial services, STEM, health care, research, education, tourism/retirement, and military bases all making strong contributions to jobs and growth. In fact, the Metro Tampa Area added 34,300 new jobs to the community last year alone. This makes it the fastest-growing job market in Florida and is a sure way of boosting its real estate market for both residential and commercial properties.
#4 Airbnb Tampa Laws are Investor-Friendly
Tourism plays a big role in the Tampa local economy as the city welcomes more than 22.5 million tourists per year. So if Airbnb is your preferred rental stagey when investing in real estate, you’re probably considering buying a vacation home to rent out in Tampa. Good news for you, Tampa is actually one of the best places to buy a vacation home in Florida and across the US. Because of the strong demand for short-term rentals, Tampa Airbnb rentals have an occupancy rate of 52%. Mashvisor’s short-term rental data also show that Airbnb hosts in Tampa charge an average daily rate of $126. But you might be wondering: Is Airbnb legal in Tampa?
Short answer – yes! The State of Florida has banned local governments and municipalities from passing laws that prohibit short term rentals. Unlike other popular tourist locations like Las Vegas, New York, Los Angeles, and San Francisco, Tampa did not pass any ordinances regarding vacation rentals. Meaning, renting out on Airbnb (whether an entire property or just a room) is fully legal in Tampa. As you can imagine, this turns Airbnb in the Tampa real estate market into a profitable strategy in 2020 and beyond. One thing to keep in mind, however, is that Florida does require all vacation rentals in the state to be licensed through the DBPR.
#5 Tampa Real Estate Investments are Profitable
As you can expect after reading all the above, real estate investors have a good opportunity to achieve a high rate of return on a Tampa rental property. This is for both the traditional and Airbnb rental strategies. According to Mashvisor’s Tampa housing market statistics, investors can expect to earn $1,909 in monthly rental income from traditional rentals and $2,490 in rental income from Airbnb rentals in Tampa. If you’re savvy and know how to lower your expenses, this means you can own positive cash flow properties in Tampa.
Mashvisor’s real estate data also shows that the price to rent ratio in the Tampa real estate market will amount to 21 in 2020. A price to rent ratio of 20 and above indicates that rental rates are less expensive than property prices in the housing market. As a result, renting makes more financial sense than buying a home for residents. In fact, more than half of Tampa’s population – 53% to be precise – rent instead of own a home. Therefore, the high price to rent ratio further supports the fact that rental demand is strong in Tampa which is one more reason to buy rental properties here.