Why Real Estate is the Best Way to Invest in Naples

If you’re looking for the best way to invest and grow your personal wealth, you can’t find a better option than to invest in real estate in Naples. And if you’re looking for a place to do it, you can’t do better than to invest in Naples, Florida (rated the happiest city in the US four years in a row). From tax benefits to high value properties, the Naples real estate market is a dream-come-true for any investor.

At Naples Relocation Experts, we are masters of all things real estate and all things Naples. Our team includes born-and-raised Floridians and long-time Southwest Florida residents with an intimate knowledge of the area. As real estate investors ourselves, we have firsthand experience of the incredible benefits that come with investing in Naples, Florida. We’re dedicated to helping our clients find the same success.

Today, we’ll answer commonly asked questions from investors to illustrate why real estate is the best way to invest in Naples, Florida.

Is real estate investing a good way to build wealth?

Absolutely! Real estate is considered one of the safest investments you can make. The value of properties rarely drops and, when it does, it’s usually only for short periods of time.

According to a 2022 survey by CNBC, 23% of respondents said that investing in real estate is the best way to build personal wealth. It was the most popular response, ahead of investing in stocks (16%), starting a business (15%), and getting a second job (12%). Real estate is also the largest segment of household wealth at 24%.

Billionaire Andrew Carnegie famously said, “90% of all millionaires become so through owning real estate.” If you’re looking for an effective way to build wealth, real estate investing has a powerful proven track record.

Will the real estate market continue to grow?

National and local real estate prices have been trending upward and show no signs of stopping. The US real estate market overall is forecasted to grow over the next several years, and Naples is predicted to grow even more than the national average.

Aerial view of Naples Communities
Aerial view of Naples

As of 2022, the US real estate market is valued at $3.81 trillion with an expected compound annual growth rate (CAGR) of 5.2% from 2022 to 2030. According to research by Wallet Investor, the predicted home sale prices in Naples will increase by 17.949% in the next 10 years.

What do housing prices look like in Naples?

Part of the appeal of investing in Naples is the high property value. The Naples Area Board of Realtors (NABOR) put the median closed price of a home in Naples at $600,000 in November 2022. For comparison, the National Association of Realtors (NAR) listed the national median price at $366,900 as of December 2022. That’s a 63.5% difference!

Based on the predicted growth rate and the high home values, it’s a great time to invest in Naples, Florida real estate.

What can investors do to increase the value of their properties?

The best answer here is the most obvious one: invest in home improvements.

“Whatever amount of money you invest into the home, you typically make a greater return than that – whether it’s 10% on top of it or 20%,” said Drew Josephson, Founder of Naples Relocation Experts. “If you do the work yourself and it’s good quality work, your return is even better because your cost is lower.”

However, it’s about more than just putting money into the property. It’s important to choose the right projects and partner with the right people. Before deciding on what renovations or additions to make, conduct thorough research on the local market to see what appeals to potential buyers. Then, you’ll need to choose contractors that can successfully execute your vision. When you work with local realtors like Naples Relocation Experts, we can provide invaluable insight and expertise on what improvements to make and which contractors can make it happen within your budget.

What tax benefits are available for real estate in the Naples area?

Tax benefits are one of the biggest reasons why real estate is the best way to invest! Real estate investors 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.

There’s an additional benefit for local real estate investors. If you’ve been a Florida resident for at least six months and a day, you don’t have to pay state income tax.

What is the typical market cycle for Naples?

The Naples real estate market generally follows the same seasonal cycle each year, and it’s heavily influenced by the influx of “snowbirds” (seasonal residents). Collier County predicts that the countywide population grows by 20% in peak season. Due to the large population boom, peak season for the local real estate market is January through April. After April, the market tends to decline and then ramp back up again at the start of the new year.

One happy family. Rear-view of a couple swinging their child bet
A couple swinging their child between them as they walk on the beach at sunset.

There are certain areas of Naples that experience this seasonality more than others. For example, the City of Naples / Naples Proper has more seasonal residents and generally sees greater “peaks and valleys” than other regions. Locations like North Naples have more year-round residents and therefore slightly more consistency.

What does the housing shortage mean for Naples real estate investors?

The United States is currently in a nationwide housing shortage, and it’s predicted to get worse. The housing shortage has been good for real estate investors because, as long as there’s scarcity, housing prices aren’t going to go down. Due to the general high demand of living in Florida (and even more so in Southwest Florida), the effects of the shortage have been magnified here.

“It’s a good, better, best scenario,” explained Drew Josephson. “It’s a good time to be in housing in the US, it’s better to be in housing in Florida, and it’s the best to be in housing in Southwest Florida.”

How do I secure financing in Naples?

When it comes to securing the best options for financing, we recommend focusing on the following:

  • Choose someone who is going to give you good service, and that you like working with.
  • Feel confident that they can close and get you the financing you need.
  • Find an aggressive lender that’s willing to take on more risk. Some banks are willing to lend more, greater loan to cost, and some banks are more aggressive trying to grow their business in this area because they see the growth too.

If you’re not sure where to start, our team can help! Contact Naples Relocation Experts and benefit from our extensive contacts and references.

How expensive is home insurance in Naples?

Like anywhere else in the country, your insurance quotes will depend on the investment assets you’re working with. More expensive properties will have higher insurance costs. Make sure to shop around for quotes and compare options to see what works best for you. Remember that, while insurance costs might be higher for these higher value properties, the cost is often offset by lower taxes and other benefits.

Naples Family Home Pool
A backyard pool of a Naples home.

Our team is happy to assist our clients with this process and connect investors to insurance agents that we’ve partnered with before.

Is real estate the best way to invest in Naples?

If you like tax benefits, long-term growth, predictable market cycles, and building wealth, then real estate is absolutely the best way to invest in Naples, Florida. If you’re interested in learning more, check out our blogs about real estate investment in Naples and the real estate investment process.
When you’re ready to dive in and start investing, contact Naples Relocation Experts! We work with investors with all levels of experience to answer questions, find properties and contractors, and discover the best way to invest in real estate. Your success is our success.

Drew Josephson
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