Between 1920 and 1925, Florida’s population increased by about 30%. Why? Simple: the Florida land boom, one of the 20th century’s greatest real estate bubbles.
Like all real estate boom-and-bust cycles, the Florida land boom was sui generis. In particular, it was characterized by an unusually low proportion of owner-occupants. Most people who bought land in the rush never even visited the state; some had never even been south of the Mason-Dixon line.
All they knew was that Florida had hundreds of miles of prime beachfront real estate and no winters to speak of. What more could newly flush Northerners want in a land investment?
The good times of the Roaring Twenties didn’t last, but Florida real estate is never far from the popular imagination. And there’s more than a grain of truth to the perception that land in Florida is a better bet than land in, say, Nebraska. (No offense, Cornhuskers — you’ve got a fine state there.)
South Florida, and particularly the Atlantic coastal zone stretching from the Palm Beaches down south of Miami, holds special sway with investors. Here’s why real estate investors keep flocking to South Florida — and what you need to know about buying investment property here.
- Diversity Is Key
Look past the handsome beachfront estates and high-rise condos. There’s more to South Florida real estate. If you’re serious about building a sustainable portfolio down here, you’ll need to get comfortable with a variety of property types — or, at the very least, build a geographically diverse portfolio that spans the region’s full length.
- Beachfront Isn’t Everything
Outsiders might be forgiven for imagining that all of South Florida resembles South Beach, and that such places are the only locales worthy of their real estate investment dollars. Neither notion is true, to put it mildly.
“Inland communities offer incredible value here,” says Florida real estate expert Ralph Serrano. You’ll need a local market partner to help you sort first-rate communities from the rest, but don’t sacrifice your wide initial aperture.
- If You Want a Great Deal, Prepare to Get Your Hands Dirty
Like most real estate markets, South Florida has plenty of aging stock badly in need of TLC. If you have the expertise — and local subcontractor contacts — to tackle full-blown renos, you’ll very likely make out well down here. Bonus points go to investors willing to target distressed properties, which account for a far greater share of the product mix here than is typical nationwide.
- Small Multifamily Is Underappreciated
South Florida has a sizable student population. Look for small multifamily opportunities in college towns like Coral Gables, where rental property cash flows tend to be higher than the regional average.
Grab Opportunity by the Horns Today
There are no guarantees in life, and anyone who tells you otherwise surely isn’t a seasoned real estate investor. While it’s absolutely the case that, at any given moment, some real estate markets hold more potential than others, it’s decidedly not the case that success is assured anywhere — no matter how hot conditions appear at first blush.
If you’re looking to break into South Florida’s dynamic real estate market, you need to steel your nerves and allow discipline — not abandon — to inform your actions. Opportunity abounds here, as long as you’re clear-eyed about the risks too.