Florida Real Estate Investing As a Resident vs. Non-Resident
It’s a great time to be involved in the Florida real estate market. With the nationwide housing shortage, rising housing prices, and Florida’s booming population, the state has become a beacon for successful real estate investors. Florida is also home to some of the most expensive neighborhoods in the country. Whether you live in-state or out, now’s the time to strike on Florida real estate investing. The only question is: is it better to invest as a resident or a non-resident?
At Naples Relocation Experts, this is exactly the type of question we’re here to answer. We’re more than just real estate agents and investors; we’re the Paradise Coast’s premier moving consultation service. We specialize in educating out-of-state and foreign individuals, businesses, and families on the Naples area, and helping them acclimate once they’re here. As relocation experts and investors ourselves, we’re the perfect guides for anyone looking to invest in the Naples, Florida real estate market.
Let’s start by going over the general benefits of investing in Florida real estate and, more specifically, in Naples, Florida.
Benefits of Florida Real Estate Investing
Florida’s housing prices are higher than the national average (and rising).
Housing prices are rising nationwide, but Florida and the Naples area market are performing even better than the national averages. For January 2023, the National Association of Realtors (NAR) listed the national median home price at $359,000. The Florida median home sale price was $386,600. Finally, the Naples Area Board of Realtors (NABOR) puts the median closed price of a home in Naples at $600,000.
That means housing in Naples is currently priced over 67% higher than the national average. For real estate investors, that offers plenty of opportunity for more profitable investments.
Most importantly, these prices are already on the rise for 2023. Since last month, the national median increased by 8.1% and Naples increased by 11%. For Naples, that growth is expected to continue long-term. According to research by Wallet Investor, the predicted home sale prices in Naples will increase by 17.7% in the next 10 years.
Florida is currently the fastest-growing state in the country.
According to the U.S. Census Bureau’s Vintage 2022 population estimates, Florida is now the nation’s fastest-growing state. Florida’s population increased by 1.9% to 22,244,823 between 2021 and 2022, surpassing Idaho, the previous year’s fastest-growing state.
Florida’s population has grown consistently over the years. USA Facts reports that Florida’s population grew by an average of 1.3% per year since 2010. From 2010 to 2021, Florida grew by 15.6%. For comparison, the population in the US grew 7.3% during that same period.
More people means increased demand for both homeownership and rental properties, which is the perfect environment for real estate investors.
Naples was ranked the #1 emerging real estate market in 2022.
Each quarter, the Emerging Housing Markets Index from The Wall Street Journal and Realtor.com analyzes the 300 largest metropolitan areas across the country. The index “highlights housing markets that offer shoppers a lower cost of living, including for homes, relatively steady real estate indicators amid a broader market in flux, and thriving local economies that are attractive, but not too crowded.” In their Winter 2022 report, Naples was ranked as the number one emerging real estate market.
To learn more about why Naples is a great location for real estate investing, check out our blog “Why Real Estate Is The Best Way To Invest In Naples.”
Florida Real Estate Investing for Residents
Residents have intimate knowledge of the local real estate market.
As a Florida resident, you’re more likely to know and be familiar with the local area. You can readily drive through neighborhoods to see which ones you like or browse potential investment properties in person. It’s also easier to observe the local housing market and recognize up-and-coming areas. When it comes to Florida real estate investing, this kind of access and intimate knowledge can be invaluable for predicting the market and discovering hidden gems.
Residents have better networking & relationship-building opportunities.
As you’re already living and working in Florida, it’s simple and straightforward for residents to meet new real estate contacts. Most of the realtors, vendors, and suppliers you meet while networking will also live and work in the area, allowing you to easily build relationships. You can also rely on friends and neighbors for referrals. Any local real estate investor can build a strong professional network over time.
Residents don’t have to pay state income tax.
Perhaps the best benefit of Florida real estate investing for residents is the lack of state income tax. Florida is the only state east of the Mississippi that doesn’t collect income taxes of any kind. If you’ve been a Florida resident for at least six months and a day, then you can take advantage of this perk!
Real estate investors in general pay less taxes than the average person due to all of the available benefits. Investors receive tax write-offs for property taxes, property insurance, mortgage interest, maintenance and repairs, property management fees, utilities, and more. They can also deduct depreciation as an expense.
Florida Real Estate Investing for Non-Residents
Non-residents have a fresh perspective on the local market.
Current investors working in the area are honed in on the local market. They know it well, and they’ve been watching it for years. However, when a non-resident comes in, they can sometimes see patterns and predictions from their own unique experience that locals are missing.
For example, earlier this month, Drew Josephson, founder of Naples Relocation Experts, received a phone call from a Vancouver real estate investor about Lake Park. The caller told Drew that the area was a goldmine. Across the street from the community, there was $10 to $12 million for new construction, and it’s only five minutes from Fifth Avenue South. Even though he lived in an entirely different country, he could immediately recognize the potential.
“It can be an advantage to be an outsider,” said Drew. “You have a fresh perspective, and you can see down the road.”
Non-residents might have the opportunity for unique financing options.
When it comes to financing, non-residents can actually have unique opportunities not available to local investors. The Florida and Naples real estate markets are well-known for being profitable and high value. If an out-of-state bank is looking to grow their business in that area, they might be more flexible with their financing offer. Some banks are willing to lend more or provide greater loan-to-cost (LTC) because they see the growth in the area and want to be a part of it.
Non-residents need a local expert to confirm their insights.
If you’re a non-resident interested in Florida real estate investing, it’s essential that you partner with a local expert. As we mentioned before, out-of-state and foreign investors can have plenty of fresh perspectives and insights on the local market. However, what works in their market may not directly translate to others. It’s crucial that you have a partner to discuss those ideas with and confirm their accuracy.
The Naples Relocation Experts team has a lot of experience providing that type of feedback to our clients. If you have ideas on how you want to invest in the Naples real estate market, speak with one of our experts and begin our collaboration.
So, Should You Move to Naples, Florida?
As long-term residents and Neapolitans, our team might be biased. But we’ll tell you what we tell all of our clients: Naples isn’t just a place to invest – it’s a place to live. We’ve had many clients start out as out-of-state investors only to fall in love with the area and relocate themselves. Our blogs “Relocating and Investing in Naples, Florida” and “10 Things You Need to Know Before Relocating to Naples, FL” offer great summaries of what to expect while living and investing in Naples.
We see it happen in the other direction as well. Clients start out with us as homebuyers and later become investors.
“Buying traditional real estate is a gateway to investing,” said Drew. “We see it all the time. Someone comes to us for help finding a home. They get to know us, they see what we’re doing, and then they want to invest with us.”
Ready to Learn More?
Ready to start investing in Naples, Florida real estate? Want to learn more about the pros and cons of Florida real estate investing as a resident versus non-resident? Contact Naples Relocation Experts today! Our team can help you discover profitable investment properties, connect with vendors and suppliers, and more.
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