Real estate investors are increasingly turning their attention to southern metro areas, snapping up more affordable properties.
According to Realtor.com, investors in Springfield, Missouri, purchased 20.5% of homes in the area, the highest share among the 150 metros surveyed. Missouri remains a hot state in the market, with Kansas City and St. Louis seeing 20.1% and 18.9% of purchases from investors.
Southern metro areas are attractive due to their affordability compared to coastal and major urban areas. Real estate prices in states like California and New York average $683,000 and $331,000, respectively, with property taxes at 1.69%. These high prices discourage investors from buying in these states.
The low cost of entry for southern metro homes allows investors to purchase properties with less capital while still receiving a large return on investment (ROI). Florida remains a top state for real estate investors, with cities like Orlando, Tampa, Lakeland, and Ocala being hotspots. Properties listed in Tampa average a median price of $450,000 and typically sell after 45 days on the market.
Southern metro cities, with their mild climates, attract tourists year-round. This steady influx of tourists ensures high occupancy rates for short-term rentals, providing a reliable income stream for investors. The increase in short-term rental platforms has made it easier for property owners to market and rent their properties to a global audience and manage bookings efficiently.
As demand for unique and immersive travel experiences continues to grow, the South remains a top destination for investors seeking high returns and sustained growth in the short-term rental market. Have you noticed decreased prices for homes in your area? Let us know what you think in the comments!
For more insights on real estate investment, tune in to my podcast, Black Real Estate Dialogue. Watch on YouTube or listen on Apple Podcasts or Spotify.
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