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Here are the best neighborhoods to invest in St. Petersburg rental real estate because they have the highest appreciation rates (List by Neigborhoodscout.com).
|1 || SKWY Sunshine Bridge S / SKWY Sunshine Bridge N |
|2 || U of South Florida-St. Petersburg Campus / 4th St S |
|3 || Central Ave / Beach Dr NE |
|4 || 28th St N / 22nd Ave N |
|5 || 62nd Ave NE / Grant St NE |
|6 || Gandy |
|7 || Dr Martin Luther King Jr St N / Highland St N |
|8 || 5th Ave S / 24th St S |
|9 || 5th Ave N / 37th St N |
|10 || City Center |
How is Real Estate Investing in St. Petersburg, FL?
Now that you know where St. Petersburg is, you probably want to know why we’re recommending it to real estate investors. Investing in real estate is touted as a great way to become wealthy. Should you invest in St. Petersburg rental real estate?
Many real estate investors have asked themselves if buying a rental property in St. Petersburg is good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead.
We have already discussed the St. Petersburg housing market 2019 forecast for answers on why to put resources into this market. Although, this article alone is not a comprehensive source to make a final investment decision for St. Petersburg but we have collected ten evidence based positive things for those who are keen to invest in the St. Petersburg rental properties.
Investing in St. Petersburg rental properties will fetch you good returns in the long term as the home prices in St. Petersburg have been trending up year-over-year.
Let’s take a look at the number of positive things going on in the St. Petersburg real estate market which can help investors who are keen to buy an investment property in this city.
We’ll focus on real reasons to invest in the St. Petersburg real estate instead of giving you vague appeals to buy a house or an investment property because of general ambiance and mere promises of future growth.
1. The Affordable Real Estate in St. Petersburg
The average residential property in the St. Petersburg FL housing market costs around 230,000 dollars. This is surprisingly close to the national average.
It is also unusual given the factors that contribute to the rising prices of property in the area. For many, driving across Old Tampa Bay was an inconvenience but necessary due to the higher prices of homes in Tampa.
2. The Impact of Geography
St. Petersburg is famous for its beaches and warm climate. This is mostly due to the warm Gulf Coast waters that surround it. The city is surrounded on three sides by Tampa Bay and the ocean. And to the north, it is hemmed in by cities like Pinellas.
The city is therefore built-out and can’t expand unless you go for expensive tear downs before building high density or just high buildings.
This has helped contribute to the median price per square foot for homes in the St. Petersburg FL housing market costing roughly 200 dollars per square foot, while the Tampa-St. Petersburg average is 150 dollars per square foot. The average home is just cheaper because there are so many condos.
3. The Steady Real Estate Appreciation
The high costs of new construction result in steady appreciation for homes in the St. Petersburg FL housing market. Home prices increased 5 percent in 2019 and are expected to rise another 5 percent in 2020.
4. The Massive Condo Market in St. Petersburg
The St. Petersburg FL housing market is notable for its large number of condos. More importantly, supply isn’t keeping up with demand. The city has several new condo projects coming onto the market, and they are sold out.
Why does St. Petersburg have such high demand for condominiums? For snowbirds, it means they have a place to stay but don’t have to work to maintain the roof or yard.
This means landlords catering to seasonal crowds don’t have to deal with much maintenance of their St. Petersburg real estate investment property, either.
A side benefit of the sheer number of condos in the St. Petersburg area is that it results in them having a higher resale value than areas where condos are considered a step down from houses. Condos are becoming the default option for residents in downtown St. Petersburg.
5. The Favorable Tax Climate
Florida has one of the lowest overall tax burdens in the United States. It ranked 34 out of the 50 states on taxes. It doesn’t have an income tax, and the property taxes are low compared to states like Texas.
More importantly, the local taxes on a St. Petersburg real estate investment property are lower than the state average.
The St. Petersburg FL housing market has the tenth lowest tax burden out of the top 50 metro areas in the state of Florida.
6. The Favorable Legal Climate
Florida doesn’t limit security deposit. You have 15 days to return them unless the person has unpaid rent or property damage. The state’s rental laws are minimal, giving landlords more flexibility. And the state gives you more flexibility than others.
For example, the renter’s deposit can be held in an interest paying account, non-interest paying account or even as a surety bond. You just can’t mix their deposit with your personal funds. The state of Florida doesn’t have rent control, either.
7. The Short-Term Rental Market
Florida has a large percentage of the population that rents, but the warm weather draws many retirees here. The beaches draw many to the St. Petersburg real estate market for a weekend or the winter.
St. Petersburg FL housing market has some strict limits on short term rentals but does allow them. In a residential district, you can only rent it out one calendar month a year but have to have a city business tax receipt.
Short term rentals are permitted in the tourist district year-round, though you have to meet permitting requirements and pay the requisite taxes. If the area allows motels and hotels, then the St. Petersburg real estate investment property can probably be rented out to tourists, too.
8. The Homeowner’s Insurance Rates
Florida homeowner’s insurance rates are highest in the nation. However, insurance premiums vary based on risk. You pay insanely high insurance premiums for properties in Miami and the Keys because they are most likely to suffer hurricane damage.
The Gulf of Mexico side of Florida is less prone hurricanes. And that’s why the St. Petersburg real estate market has insurance rates not that much higher than inland communities.
9. The Impact of Snowbirds in Tampa-St. Petersburg
The St. Petersburg real estate market is a mix of single family homes, apartments and condos. The city’s location on the beach and steady stream of visitors has resulted in it becoming a destination for snowbirds, retirees who visit in the winter.
This also means that you could pick up a condo from non-resident owners who can’t return for health reasons, died, or need the money. On the other hand, snowbirds drive up rental rates and property values.
10. The Opportunity for Bargains
One opportunity in the St. Petersburg real estate market can be found in privately owned condos in “fractured” communities. These are condominiums in buildings that have switched from condos to rented apartments.
Florida passed a law a few years ago allowing condo buildings to be converted to apartments if 80 percent plus agreed to it and less than 10 percent objected. These units quickly lose their value, but the condo owners can only sell to third party investors or the group that bought the building.
A fractured unit in the St. Petersburg real estate investment could then be rented out like an apartment, though you don’t have to buy an apartment building. And you could later sell the St. Petersburg real estate investment property to the building owner.
However, if the unit hits a certain threshold, existing owners may be forced to sell to the main owner. Another opportunity can be found with those delinquent on their mortgage payments.
An average of 1.1 percent of homes nationwide is delinquent on their mortgage. In the St. Petersburg real estate market, it is 1.3 percent. This creates a slightly larger pool of distressed sellers.
Investing in St. Petersburg Real Estate: The Conclusion
Maybe you have done a bit of real estate investing in St. Petersburg, FL but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold.
The Tampa area is one of the hottest real estate markets in the United States. The city of St. Petersburg benefits from this while having a few unique benefits of its own. It is a seller’s market market with high rates of return.
A good cash flow means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt.
Therefore, finding a good St. Petersburg real estate investment opportunity would be a key to your success. If you invest wisely in St. Petersburg rental real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate.
The less expensive the St. Petersburg rental properties are, the lower your ongoing expenses will be. Roughly a $150,000 property is what some experts recommend starting with.
Most investors naturally gravitate to residential property investment. When looking for the best real estate investments in St. Petersburg you should focus on neighborhoods with relatively high population density and employment growth.
Both of them translate into high demand for housing. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.
You must also collaborate and learn from savvy real estate investors who have retired early on in their lives by investing in some of the best real estate markets like Saint Petersburg, FL.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process.
They are well-informed about critical factors that affect your specific market area, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing and interest rates.
NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
The aim of this article was to educate investors who are keen to invest in St. Petersburg real estate in 2019. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend to do your own research and take help of a real estate investment counselor.
Other Best Places To Invest in Real Estate in 2020
The other best place to invest in real estate is Missoula, MT. A number of factors combine to make the case for Missoula real estate investment over investing in other parts of the region. It is a stable real estate market with decent rates of return.
Demand for properties in the Missoula real estate market is greater than supply. The area hasn’t seen new construction at the rate necessary to meet demand.
That’s why home prices hit a record price of 300,000 dollars in August, 2018. They’ve remained in that ballpark ever since.
Another fairly good market to choose for real estate investment is Ogden, UT. The Ogden housing market is relatively affordable for investors, but it also offers a favorable legal and regulatory climate.
Rental returns are high, while the area is seeing significant growth. This makes the Ogden housing market perfect for real estate investors. Also, the Ogden housing market is going to see continued growth for years due to a young and growing population.
*Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
Tax climate https://taxfoundation.org/state/florida/ https://www.kiplinger.com/slideshow/taxes/T055-S001-florida-cities-and-towns-ranked-for-local-taxes/index.html
Favorable legal climate https://www.avail.co/education/laws/florida-landlord-tenant-law/amp
Short term rentals https://www.tbnweekly.com/clearwater_beacon/article_72c40f88-7ca1-11e9-9bfb-5737e983212e.html https://www.stpete.org/planning_zoning/docs/Short%20Term%20Rentals%20HANDOUT.pdf
Condo market https://stpetecatalyst.com/st-petersburg-10-years-after-the-recession-downtown-living/ https://www.tampabay.com/business/two-more-big-tampa-bay-condo-communities-are-becoming-rentals-20190625/
Market Prices, Trends & Forecasts
The impact of Snowbirds on the market
Author: Don Van Lehn
January 9th 2020
About Don: ...