Florida and foreign real estate investment
Florida is a state in the southeastern United States whose capital is Tallahassee. It is bordered to the east by the Atlantic Ocean, to the west by the Gulf of Mexico, to the north by the states of Georgia and Alabama, and to the south by the Straits of Florida.
With an approximate population of 22 million inhabitants and an area of 170,312 km2, this state has a wide variety of cultural influences, especially Latino, which according to the 2020 census correspond to 27% of its total population.
Florida enjoys a subtropical climate, with mild, dry winters and a lot of heat and rainfall in the summer, and is also home to a diversity of landscapes: forests, swamps, lakes, savannahs, etc. It is not surprising that one of the main reasons why so many people are attracted to this place is the good weather all year round (except when hurricanes occur with heavy rains that usually occur around September and most frequently affect the northwest and southwest of Florida) and its wonderful beaches much used as photographic locations for modeling (the average annual temperature in 2023 in the state was 23 degrees Celsius according to the Florida Climate Center).
Supported by its good weather, beaches, and infrastructure, tourism is Florida’s main industry. The year 2023 welcomed more than 140 million tourists1 attracted by cosmopolitan cities such as Miami, its avant-garde fashion, its world-class theme parks such as Walt Disney World and Universal, world-famous sports tournaments, its unique nature such as the Everglades and much more. Also remember that this is the state par excellence of citrus fruits, especially oranges.
New trends such as remote work have caused more people to relocate to places like Florida to live. Additionally, there is a strong growth not only in tourism, but also in the financial, health and aerospace industries, causing more people to come to live in the state. All of the above has led to a high demand for properties that the supply is often not able to meet. This demand, coupled with a very favorable tax environment for foreigners in one of the safest investment countries in the world, has led international investors to choose Florida as one of their top property investment destinations. Latin Americans stand out with 35% of the total property purchases by foreigners in Florida in the last year.
It’s no surprise then that in the long run Florida property prices keep going up. According to neighborhoodscout.com the appreciation (price increase) of real estate in Florida in the last 10 years is +10% per year. In such a favorable context for investors, what alternatives are there? There are a variety of options. For example, you can invest in commercial or residential properties. Within this last category, there are different types such as apartments, houses, etc. The type of rental also varies short-term like Airbnb or long-term traditional rentals.
What about foreign real estate investment in Florida? According to the 2023 report “Profile of International Residential Real Estate Activity” of Florida Realtors®, between August 2022 and July 2023, a total of 19,458 properties were purchased in Florida by foreigners, 65% of them residing outside of the United States. The top 5 foreign buyers (in dollar amount) by nationality are:
- Canada
- Colombia
- Brazil
- Argentina
- United Kingdom
Of foreign buyers, the highest percentage corresponds to Latin Americans with 46%.
The 4 most important destinations for purchases within the state by foreigners were:
- Miami – Ft. Lauderdale – West Palm Beach (47% of foreign buyers)
- Orlando – Kissimmee – Sanford (14%)
- Tampa – St. Petersburg – Clearwater (8%)
- Cape Coral – Ft. Myers (6%)
The median sale price for foreign buyers was $416,000 in 2023.
Returning to the most important areas where foreign buyers invested in real estate:
a) Miami – Ft. Lauderdale – West Palm Beach
Along the southeast coast of Florida, these cities are in the so-called Greater Miami Area. The Miami metropolitan area is home to 6.3 million inhabitants with a large Latino presence and is a modern city that needs no introduction, with a thriving tourism industry with large hotel chains, museums, galleries, fashion, professional sports teams, nightclubs on Ocean Drive, beaches known worldwide as Miami Beach and is an important center of commerce as well as a financial hub that continues to grow; it is also the most important destination of cruises in the world. Fort Lauderdale and West Palm Beach also have a lot to show. Fort Lauderdale offers the elegance of its luxurious homes, yachts and Venetian-like canals (even gondolas). Tourism is a strong industry in the city: cruises, conventions, water sports, etc. In addition, the health and scientific industries, among others, stand out. Finally, West Palm Beach showcases a vibrant scene with notable museums such as the Norton Museum of Art, shopping, nightlife, the Lion Country Safari, lots of golf, and miles and miles of beaches that attract tourists and new residents year-round. It is worth mentioning that several financial firms have settled in the city and that industries such as agriculture and health are important as well. The entire South Florida area has been receiving a strong inflow of investment in properties, with the consequent rise in its values and rental prices, supported in part by new residents thanks to remote work, the relocation of companies to the area thanks to the low-tax scheme and investors who choose it as one of their preferred destinations, especially Latin American.
b) Orlando – Kissimmee – Sanford
These cities with almost 500,000 inhabitants are the neighbors of the famous theme parks that attract millions of tourists from all over the world to Central Florida every year: Walt Disney World, Universal Studios, Sea World, among others, and their economies are mainly based on tourism. Whether staying in theme park hotels or outside of them, the inflow of visitors is strong all year round. It’s no wonder that Orlando International Airport is the busiest airport in all Florida and that it can also be reached directly by train from Miami in just three and a half hours. But in addition to parks and a variety of large outlets where tourists can buy big brands at great prices all year round, there are other industries that attract new residents to the area. The development of the space industry with Cape Canaveral nearby on the coast increases the demand for lodging in the area, as well as the healthcare industry (e.g. the 650-acre Lake Nona Medical City), the Orange County Convention Center, which is the second largest in the country and not to mention the University of Central Florida (UFC) which is also the second largest in the country in terms of enrollment, that only provides accommodation to a minority of those students who must look for it in the area. For all the above and more, this entire area has seen one of the largest population growths in the nation in the past decade.
c) Tampa – St. Petersburg – Clearwater
These neighboring cities located on the west coast of the state surround Tampa Bay, Old Tampa and Hillsborough. In addition to the natural beauty of the bays, they have everything that big cities can offer and are a strong pole of new residents every year. Tampa (population 400,000) is the largest city with an international airport and Florida’s largest port, the University of Tampa, museums, the Florida Aquarium, Busch Gardens theme park, quaint neighborhoods and much more. This city has a strong economy (highlighting its financial and marine area) and stands out nationally with a strong growth in population and employment. Saint Petersburg (population 270,000) has beaches and a more intense nightlife that attracts many young people (as well as many retirees who live here), and stands out for its cultural scene with galleries and attractions such as the Salvador Dalí Museum, although its economy is less diverse than Tampa’s. Both cities have been characterized by dynamic real estate markets. Clearwater (population 120,000) is not far behind. Its white sandy beaches and crystal-clear waters are a delight. So are its annual free jazz festival, concerts and events at Ruth Eckerd Hall, its famous Pier 60, etc. It also boasts a variety of industries like advanced manufacturing, financial, health, marine, among others. Don’t forget that Clearwater/St. Petersburg also have their international airport just like Tampa.
d) Cape Coral – Ft. Myers
Both neighboring cities are located on the southwest coast of Florida on the banks of the Caloosahatchee River. In Cape Coral (population 230,000 approximately) and Fort Myers (population approx. 100,000) there is plenty of water sports, golf, art such as the Cape Coral Arts Studio, beautiful coastal walks, attractions such as Thomas Edison’s laboratory, education, restaurants and beaches such as Fort Myers Beach and its own international airport. Its good climate, beauty and quality of life means that there is a significant community of retirees living in the area. These cities have experienced strong growth in employment and population in recent times, with a variety of industries flourishing such as tourism, defense, health, and aviation, among others. Growth in employment and demand for housing has led to an expansion in the construction sector in this area.
For more information, visit www.visitflorida.com.
Remember that no matter which Florida city you decide to purchase a property, federal and state taxes do not change and are the same throughout the state of Florida.