By Ralph Serrano
The dictionary entry for “real estate investing” might as well feature a picture of a glassy South Florida condo tower, its balconies poised like sentinels over Biscayne Bay. For better or worse, Florida — and the three counties that make up what’s traditionally known as South Florida (technically, southeast Florida, but who’s counting) in particular — is the epicenter of the American investment property market.
Has it always been so? Yes and no. Florida has drawn its fair share of real estate speculators since the early-20th-century land rush, which minted plenty of millionaires and bankrupted far more.
“But the conditions that gave rise to Florida’s present real estate investment boom arose more recently, thanks to technological advancements, political decision-making, and a not insignificant amount of luck.” — Ralph Serrano
With that in mind, let’s review six things that make Florida particularly attractive to real estate investors.
1. Air Conditioning
Laugh all you want. It’s true. Until the advent of indoor air conditioning in the middle of the 20th century, delicate-complexioned Northerners saw most of Florida as a backwater. Literally — much of the state was all-but-uninhabitable swampland, or at least it seemed that way.
2. Miles and Miles of Beachfront Real Estate
The sky is blue, water is wet, and Florida has hundreds of miles of prime beachfront real estate. From Pensacola to Naples to Miami Beach to Amelia Island, Florida is defined by its sandy expanses. Not coincidentally, these expanses tend to coexist with the state’s priciest lots — or, at least, those most attractive to investors.
3. No State Income Tax
Florida is one of a handful of states with no state income tax. That’s a major motivator for middle-class snowbirds and jet-setting multimillionaires alike; many thousands of people who spend summers elsewhere call Florida their home base. That means more demand for Florida real estate, beachfront or otherwise.
4. Rapid Population Growth
What came first, the chicken or the egg? For Florida’s property market, it’s difficult to tell. What we can say with certainty is that Florida real estate investors love the state’s brisk growth, which puts a floor under demand even in tough economic times.
5. Great Business Climate
Florida perennially ranks in the top five states for entrepreneurs. That’s no accident — it’s the natural outcome of decades (with some interruptions) of pro-business politics up in Tallahassee.
6. Not Perfect, But Pretty Close
Florida is not perfect. No state or region is. Indeed, Florida is best understood as an amalgam of multiple distinct regions: Caribbean-facing South Florida (the greater Miami area up to the Palm Beaches); slower-paced (and retiree-heavy) Southwest Florida; the great mass of suburbs and exurbs stretching through Central Florida from Tampa to Daytona along I-4; and North Florida, which is closer culturally and economically to Alabama and Georgia, the states immediately to its north, than Miami and its environs.
Still, Florida is a great place to live and work. And that makes it a great place to invest in real estate — if you know what you’re doing.
So, are you sold on Florida real estate?
Ralph Serrano of Miami-based Safe Harbor Equity, is the founder and managing partner.