Tampa, Florida Rental Market Forecast for 2014
Today’s blog topic is the rental forecast for 2014. I’d like to share my thoughts on what the Tampa rental market will look like in this coming year.
In 2013, we had a banner year for rental property investors in Florida.
Almost 70 percent of all real estate purchased in this state was purchased with cash. That is a remarkable statistic. In the last year, we have also seen institutional and private investors really go on a spending spree in our state. They have snapped up all the property they can, and they are turning those properties into rental homes. Residential values went up 15 percent in 2013. That leaves us with some good news and some bad news for our market in 2014.
Rising Interest Rates
Let’s get the bad news out of the way first. The rising interest rates are something to be careful of. The banks are going to let those rates begin creeping back up as the real estate and mortgage markets continue to stabilize and grow. In Florida and Tampa, we will also see rising insurance rates and property taxes. As the value of these properties go up, the taxes associated with them will also begin to rise. There will also be more competition for renters. Institutional investors are becoming landlords and there are a lot more rental properties on the market. In addition to that, building has really taken off. There are new apartment complexes going up all over Tampa, so tenants really have a lot of options when choosing a place to live.
There is some good news. The population in Tampa bay continues to grow. There is a steady pool of renters who are here now and who are relocating to the area. The Florida economy is in full recovery, and important sectors such as construction are bouncing back. This means more jobs, more stable incomes and a higher quality of tenants. Finally, the National Association of Realtors projects that real estate prices will increase 10 percent in Tampa in 2014.
Income investors are going to feel squeezed. The rising prices of taxes and insurance cannot be offset because you can’t raise rent too much when there is so much competition out there. Still, great cash flow investment properties are available, and a good property manager can help you find them. Be careful with those rising interest rates. Consider taking a smaller mortgage to get the cash flow you need.
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