1 – High rate population growth
Every day about 1,000 new residents have moved to Florida from other states, attracted by the sun, low taxes and a more relaxed culture, said Rich Doty of the Bureau of Economic Research at the University of Florida.
Added to this number a growing rate of immigrants from other countries, mostly from Latin America, project a population growth of around 2% per year, representing around 700,000 new inhabitants in the next 2 years.
It is the third most populous state in the country, behind California and Texas. For distribution purposes, the census recorded 21,570,527, including people living abroad who call Florida home.
This growth has accelerated since the start of the pandemic by about 20%.
2 – Quality of life
Something that was even more evident during this pandemic is that people are looking to live in a place where quality of life is a must and no longer a luxury item.
In SoFlo the pleasant climate, with an average temperature of 82 °F in summer and 61 °C in winter, added to hundreds of kilometers of beaches, 3 international airports, 2 major ports, high-speed train operating between Miami – Fort Lauderdale- Palm Beach which will connect these cities with Orlando in less than 3 hours in the next year, and the wonders of a salty life makes Florida the number 1 destination among Americans when it comes to leisure and vacation.
3 – Heated job market
In addition to the quality of life and lower taxes compared to other states, another important factor for this large number of people to continue moving to Florida is its heated job market.
The local government has supported and encouraged job creation and business growth in its territory.
It’s no surprise that Miami is considered the best business city in Latin America, but its geographic location and economic diversity also make it the #1 city for startups and the sixth city in the US for small businesses, according to the Kauffman Foundation .
Here are some of Greater Miami’s economic industries and anchor employers:
Travel, leisure and hospitality: they are a large part of Greater Miami’s economy. Although it has suffered tremendously since the start of the pandemic, clear signs of rapid recovery are on the horizon. Miami is the global headquarters for four travel and cruise related companies, including Norwegian Cruise Lines; Interval Leisure Group, part of Marriott Vacations Worldwide; Carnival Corp. and Royal Caribbean Cruises.
Logistics and Distribution: Miami’s location makes it an ideal international distribution and logistics center. American Airlines, Air Transport Services Group, DHL and UPS have their regional headquarters here.
Medicine and Health: Baptist Health South Florida is the largest employer in the Miami area, with 12,000 employees. However, several other hospitals and medical facilities are among the top 10 employers in the area.
Banking and Financial Services: Miami also serves as a global financial center, allowing businesses to operate internationally. Citigroup, Wells Fargo, Bank of America Merrill Lynch, JP Morgan Chase, and numerous hedge funds and investment firms have regional offices or headquarters in Greater Miami.
To give you an idea, the state has an annual GDP greater than US$ 1.1 trillion, with growth of more than 50% in the last ten years.
4 – Rentals
With the heated real estate market and the demand for leases following the same trends, this modality also presents itself as a great option for investors.
Rent values increased by an average of nearly 4% in South Florida last year, double the increase in the previous year. It could increase from 2.5% to 3.5% next year, according to Ken H. Johnson, a real estate economist at Florida Atlantic University.
Developers are building new apartments and condominiums as quickly as possible to capitalize on the situation. About 8,500 were built in South Florida in 2019 and 2020.
An investment widely used is to finance the purchase of a house and put it on the market for rent; with extremely low real estate interest, it is possible, with the amount obtained in the lease, to cover the financing expenses and still leave a monthly amount in the investor’s hand. In other words, a business that truly pays for itself.
We have several foreign and domestic clients with very successful experiences within this category of investments, remembering that in South Florida rents are around 9% higher than the US average.
Another growing modality within this category is the rental of houses and apartments for the season or short-rentals, using platforms such as Airbnb.
Real estate market “on fire”
In the last five years there has been an increase of almost 38% in property prices, only in 2020 this increase was 7.9%. In our other Blog, we put the forecasts for the real estate market according to experts, in which the indicators point to a sustained and gradual growth, taking into account the above factors.
Get in touch with us and we will be happy to guide you throughout the process, always seeking to present you the best investment options for your particular goals.