Rising home values and a strong rental market: real estate investing in Tampa, Florida
Written by Brian Boucher
Reviewed by Mynd Editorial Staff
You know your city’s hot housing market has arrived when it is the subject of its own cheesy Netflix reality show.
“Selling Tampa” highlights the escapades of the luxury real estate firm Allure Realty and its founder, former U.S. Army paratrooper Sharelle Rosado.
The series (a spinoff from “Selling Sunset,” which highlights Los Angeles) introduces the mostly-minority, all-woman team, adding empowerment in with the drama around the sales of multimillion-dollar Tampa real estate and the lavish commissions they generate.
And no wonder — even if every house on the Tampa real estate market isn't selling in the same eight-figure range as the ones handled by Allure Realty, this Florida city on the Gulf of Mexico coast has earned a lot of attention from real estate investors.
While Derek Jeter, Tom Brady and Tom Cruise may all own homes in the Tampa Bay area, there’s still plenty of room for mere mortals when it comes to buying investment property at more moderate values.
The median home value is at $400,000, up 15.9 percent year-over-year, according to Realtor.com.
As for the rental market, the median single-family home rent is $2,008, up 17.3 percent year-over-year, according to John Burns Real Estate Consulting.
Median days on market in November 2022 was 61, up from 48 days a year prior, according to Realtor.com.
“Tampa's one of the main success stories of the post-pandemic recovery,” says Moody’s economist Emily Mandel. “The area has benefited from a surge of new residents and strong job creation. The rebound of the Tampa metro area employment ranks among the top 10 of metro areas with more than one million residents.
“Importantly,” she adds, “the new jobs being created are generally of high quality, including strong growth in high-paying finance and professional services.” The median household income stood in 2021 at just shy of $60,000, compared to a national median, about $71,000.
Among other attractions are the Sunshine State's relaxed tax laws, including no individual income tax.
Even as mortgage interest rates rise, going past 6 percent after hovering at historical lows around 3 percent throughout 2020 and 2021, the Tampa real estate market remains strong.
“Properties are still moving, if a bit more slowly,” said Bryan Waters, a broker for Mynd in St. Petersburg. “There are opportunities for real estate investors to acquire a good rental property. Those still move quickly. Larger, high-end homes are staying on the market longer than normal."
There are a lot of buyers, including those looking for investment property they can buy remotely, and institutional groups, as well as people moving to Central Florida from places like Boston, New York, and Chicago, according to Waters.
The post-pandemic recovery of the Tampa real estate market
Many cities in Florida have taken a hit during pandemic lockdowns, which have caused travel and tourism to plummet. But the Tampa real estate market made a strong comeback, partly because its economy is less dependent on tourism than, say, Orlando, its neighbor to the east and home to Disney World (and countless other theme parks and tourist attractions).
A number of Fortune 500 companies are located in the area, including Publix Supermarkets, electronics wholesaler Tech Data Corp., tech manufacturer Jabil Inc., WellCare Health Plans, Raymond James Financial, and casual dining company Bloomin’ Brands (which owns Outback Steakhouse and Bonefish Grill).
Partly due to its major port, the city is a regional trade and distribution center, and the economy is also bolstered by financial and insurance services, manufacturing, agriculture, tourism, and the presence at MacDill Air Force Base, all creating a diversified job market.
And there’s a new entry into that long roster of industries. A Forbes report says the tech scene is “exploding” and that this Florida market is positioned to become one of the tech capitals not only of Florida but of the South overall.
The city’s economy is growing, strengthening the job market and underpinning demand in the local real estate market.
The Tampa Bay Economic Development Council points out that according to the latest U.S. Census, the area ranked fourth in the nation for net migration in 2020, with nearly 49,000 new residents, or 134 every day.
The Tampa-St. Petersburg-Clearwater metro area population is about 3.2 million, up from about 2.1 million at the turn of the millennium.
A recent study commissioned by the Tampa Hillsborough Expressway Authority predicts the population of Hillsborough County (of which Tampa is the seat) could grow up to 30 percent by 2040, further boosting the local real estate market. There has been good growth in the cohort from 25 to 44 years old, who are in their prime home buying age.
So it might be time for St. Petersburg to retire its enduring sobriquet: “God’s waiting room.”
Tampa Bay attractions: winning sports teams and beaches
There are plenty of reasons for people to keep coming. Thrillist was raving about the food scene in 2018 — Tampa is, after all, the actual birthplace of the Cuban sandwich.
One very big sell is the white sand beaches of neighboring St. Petersburg and Clearwater, which regularly get high ratings on TripAdvisor. And there’s plenty of other fun to be had.
Locals call the area “Champa Bay” for its concentration of winning sports teams: the Tampa Bay Buccaneers won the 2002 and 2020 Super Bowls and have made 11 playoffs, while the Tampa Bay Rays baseball team are multiple World Series contenders.
But ice hockey may be the most popular in this subtropical metro; the Tampa Bay Lightning won the Stanley Cup in 2020, and the team averages among the highest attendance numbers among all National Hockey League teams.
As for other tourist draws, Busch Gardens Tampa Bay draws millions every year, and visitors love the Florida Aquarium, the Museum of Science and Industry, and the Ybor City State Museum, which preserves the local history of the cigar trade.
People used to line up to visit the tigers, lynxes, and jaguars at Big Cat Rescue, the sanctuary run by Carole Baskin, until it closed to visitors due to bad press in the form of that other trashy Netflix show, “Tiger King.”
Visitors can still take in St. Petersburg’s Salvador Dalí Museum, where 400,000 a year flock to see the creations of the Spanish Surrealist, the Master of the Melting Clocks. Those who want to get a Church of Scientology personality test for kicks can head to its global headquarters in Clearwater.
Locals can also be proud of some of the region’s infrastructure highlights; J.D. Power named Tampa International Airport second-best for customer satisfaction among large airports in 2021, the fifth year the airport has been in the top five.
The area’s educational infrastructure is also outstanding. There are some 23 schools near Tampa, enrolling more than 110,000. The University of South Florida has risen in the US News and World Report ratings, moving from 94 to 46 among public universities and 67 spots among all universities (170 to 103). It currently ranks as one of the nation’s top 50 public universities.
Tampa’s aviation past and projected future growth
Tampa’s background mixes agriculture, military concerns and a curious landmark in aviation history. While the city’s name is of uncertain origin, it might be a Creek word for “a nearby place,” as in by the Bay.
Originally inhabited by Calusa and Timucua peoples, the region was later home to Fort Brooke, an 1824 military post, and began to see new industries after the 1884 arrival of the South Florida Railroad. Spanish entrepreneur Vicente Martinez Ybor introduced cigar manufacturing to the region, and Ybor City became a worldwide center for the trade.
Though it lasted just four months, the world’s first scheduled passenger airline service, inaugurated in 1914, sprang up to connect Tampa and St. Petersburg (now just a half-hour apart on I-275).
Today, local citrus fruits, along with the phosphates that are a major industry, leave the Sunshine State via the port at Tampa, while essentials like petroleum, coal and steel come into this regional trade and distribution center.
If there’s a worrisome factor weighing against Tampa’s long-term future, it’s one that many low-lying coastal cities worldwide will face: climate change and the rising sea levels that will result. Both Waters and Mandel factor it into their assessment of the city’s prospects.
“I definitely keep flood zones in mind,” says Waters. “If you have a mortgage, you need flood insurance, which is an additional expense. If there’s a hurricane, you’re more likely to get flooded. If the water rises, you’re more likely to get flooded. St. Petersburg does a great job, but there is a lot of developed land that’s under sea level. In the Shore Acres neighborhood, if it so much as sprinkles, it’s flooding. You just have to know that.”
All the same, experts are betting on the city’s future, making Tampa real estate investment look promising. No less a figure than Bill Gates is investing in the Water Street Tampa multi-use project, which includes the city’s first “true five-star luxury hotel,” the JW Marriott.
PriceWaterhouseCoopers and Urban Land Institute’s Emerging Trends in Real Estate 2022 report ranks the metro area #2 nationally among homebuilding prospects and #5 among overall real estate prospects, classifying it as a “magnet” (alongside cities like Phoenix and San Antonio).
Job growth is expected to be a bit better than the national figure, says the report, which indicates that about two-thirds of new building is expected to be single-family homes, well above the national figure of 57.3 percent, leaving plenty of room for those looking to make a Tampa real estate investment.
The city may also grow at such a rate that it may be part of a new phenomenon, a “megaregion,” with population projected to climb by 2025 to almost 25 percent higher than 2010 figures.
The future promises even better days, especially for those sassy entrepreneurs at Allure Realty. Long may they be, as they put it, “closing deals in heels.”
5 best neighborhoods to invest in Tampa
Tampa has a plethora of nicknames. Some call it Big Guava, a riff on the Big Apple and the Florida city’s abundant guava tree. Smokers prefer Cigar City, owing to its historical status as a manufacturing hub for stogies. Then, thanks to the high frequency of electrical storms, there’s Lightning Capital of North America.
But no matter what you call it, the market offers excellent prospects for real estate investors.
While rents in many popular markets rose drastically during the pandemic with increased demand, the rental market has begun to soften slightly according to a November report from Realtor.com, which indicates rents overall in the city are down 2.5 percent overall.
Research flood zones before investing
Those looking for investment property need to take into account the hazards of the subtropical climate in the Tampa Bay area, says Waters.
“Make sure the home is durable,” he says. “There are lots of older homes, built maybe as far back as the 1920s, and if you buy one, you have to make sure the foundation is good and stable.”
And a certain pest is very familiar to Tampa Bay area homeowners.
“Termites are a real issue,” he says. “You really have to do your due diligence, which means doing an inspection. If you own a home here, you’re going to have termites. It’s not a matter of if, but when.”
Plus, the rising seas caused by global warming dictate that homeowners need to shell out for good flood insurance.
All that aside, Tampa-St. Petersburg-Clearwater’s top-ranked white sand beaches, sports teams that confer major bragging rights, and a diverse economy with a rising tech profile are drawing some 115 people a day to move to this growing metro area, meaning home values are rising.
Waters described five neighborhoods in the Tampa housing market that offer great possibilities for real estate investing. (All figures are from Realtor.com, from November 2022.)
1. South Tampa
Home to MacDill Air Force Base, the mostly residential neighborhood of South Tampa is “super hot,” says Waters. “Homes are very in-demand here, very sought-after. It’s a very high-end neighborhood, and it’s very tough to find good deals.”
Many parts of South Tampa have a lot of street parking, so there are cars everywhere.
“It’s a very dense neighborhood with a lot of homes on top of each other, mostly single-family,” he adds. They’re supposedly two-lane roads but they’ll have parked cars blocking one lane all the time.”
The neighborhood has been totally redeveloped, according to Waters. “Many ‘scrapers’ have come in and torn down old buildings and rebuilt, or else older buildings have been completely renovated,” he said. “Nicely updated million-dollar homes are everywhere.”
All statistics are from Realtor.com, December 2022.
Median sales price: $775,000
Increase year-over-year: 38.5 percent
Median days on market: 48, down from 51 one year prior
2. Hyde Park
Dubbed “chic and modern” by CultureTrip, Hyde Park is nicknamed SoHo for its position south of Howard Avenue.
Among other attractions, it’s home to one of the nation’s oldest movie houses, the 1920s-era Tampa Theatre; Bayshore Boulevard, where you can spot dolphins and manatees; the misleadingly named nightclub Hyde Park Café.
It’s also the location of Big Cat Rescue, the sanctuary owned by Carole Baskins, made so notorious by the Netflix series “Tiger King” that she’s indefinitely closed the park to visitors.
Hyde Park is very close to South Tampa, and much of what goes for that part of town is equally true for this neighborhood, says Waters.
“It’s very popular, very in-demand, with plenty of million-dollar homes,” says Waters.
The Parade of Pirates, part of the Gasparilla Pirate Festival, named for legendary (and maybe mythical) pirate José Gaspar, has taken place in these neighborhoods annually since 1904.
“It’s a huge event, and it runs through both South Tampa and Hyde Park along Bay Shore Boulevard,” says Waters. “So having a home there is very cool.”
Median sales price: $1.15 million
Change year-over-year: -19 percent
Median days on market: 63, up from 60 one year prior
3. Channel District
The pedestrian-friendly Channel District is host to Amalie Arena, home to the Tampa Bay Lightning ice hockey team, which won back-to-back Stanley Cups, just one among the high-performing teams that lead locals to call their home “Champa Bay.”
Here, you’ll also find Water Street Tampa, a multi-use development that has drawn investment by none other than Bill Gates. And James Beard Award-winning chef Art Smith cooks up Southern food at Splitsville.
“This neighborhood is very close to downtown, and very close to the major waterways, so it’s right where all the cruise ships come through,” says Waters.
“Much of the housing stock is made up of condominiums. It’s a bit tricker to pinpoint prices, but everything is new, or newly updated, and it’s a very cool, very dense neighborhood.”
Median sales price: $500,000
Change year-over-year: -19 percent
Median days on market: 71, up from 54 one year prior
4. Ybor City
Named for Vicente Martinez Ybor, the Spanish entrepreneur who sparked the neighborhood’s cigar manufacturing trade, Ybor City remains a major Cuban neighborhood, with a renowned cigar shop. The sector’s abundant nightlife features LGBTQ hotspots along with dance havens and college bars.
“It’s a little rough,” says Waters of the neighborhood. “It’s big for nightlife, with lots of late-night parties. There are some spots you don’t want to walk through at night, but then it’s very close to everything that’s fun to be around. And the neighborhood is changing, with a lot of demand, so things are getting a bit safer.”
The neighborhood is much more affordable than South Tampa or Hyde Park.
“There are a lot of small, pretty, older homes that you can find for $300,000 to $400,000,” says Waters, “that can sell for as much as $600,000 to $800,000 after a rehab.”
Median sales price: $354,750
Increase year-over-year: 49 percent
Median days on market: 72, up from 47 one year prior
5. Seminole Heights
A cruise down Central Avenue in Seminole Heights is a slice of heaven for the architecture enthusiast, since it’s lined with Craftsman, Arts & Crafts, Florida Cracker and Florida Vernacular homes.
And admirers can get up close to at least one, by booking a table at Front Porch Bar & Grill, a casual dining spot in a Victorian with a wraparound porch. For more adventurous foodie, the hungry can head to the Refinery, hosted by three-time James Beard Award finalist Greg Baker.
And once folks finish their meals, they can get to both downtown and the beaches very quickly, since the neighborhood is very close to Route 275.
“Just north of downtown St. Pete, this neighborhood has lots that are a little bigger,” says Waters, “so many of the homes have garages.”
This means there aren’t as many cars on the street as in South Tampa, so traffic is a little less snarled.
“You probably won’t find anything under $400,000 here,” says Waters. “Home prices are typically anywhere from $400,000 to $1 million.
Median sales price: $430,000
Decrease year-over-year: 6.2 percent
Median days on market: 49, down from 50 one year prior