Why Pinellas County Will Remain The Top Real Estate Investing Market In 2022

Dated: December 28 2021

Views: 439


A common debate in
 real estate is whether investors should invest based on the probability for  appreciation or the amount a property will generate in income. If you look around the country, the areas with the highest appreciation often have low monthly profits and the areas with the highest monthly returns will often have low appreciation. Pinellas County is one of the few exceptions where investors can find properties with great monthly returns and annual appreciation over 30%. 

The reason behind the great rental values and high appreciation is derived from the low supply of available homes and the high demand for those few homes. There are approximately 1000 people a day that are choosing to move to Florida for a variety of reasons such as the climate, tax benefits, or growing amount of work from home jobs. These people often have a dream of living near a beautiful beach, and they inevitably come across St. Pete and Clearwater Beach as the next place to set down some roots. Fortunately for investors, Pinellas County is a Peninsula that has less than 5% of land available. Being surrounded by water makes it nearly impossible for the supply of homes to keep up with the demand and this leads to increased equity and significant rental appreciation. 

If you are currently looking for a property, you will notice it can be hard to come by Pinellas County rental properties earning more than a 10% return. While year one returns often look low, It is important to consider rent appreciation. Areas of Pinellas County have seen rent appreciation as high as 30%, and properties that were purchased at a 5% return are now bringing in well over a 10% return. 

Getting an initial return of over 10% is even more attainable when exploring short-term rentals. The short-term rental market is what really makes Pinellas stand out as a high-flyer for those looking to deploy capital. Short term rentals not only produce about 300% higher returns than an annual rental, but they also tend to appreciate faster as they are in limited regions that allow short term rentals, and therefore have significant outside capital paying over ask. This does make acquisitions more difficult, but earnings dramatically outweigh the higher purchase prices. 

Sites like Airdna rank all zip codes of Pinellas, many of which are rated among the strongest anywhere in the country for profitability, projected revenue growth, seasonality, and invest-ability. Short-term rental owners see extremely high returns in peak season, but Pinellas’s tropical climate and proximity to Tampa and St. Pete allow owners to make strong profits year-round. 

Tampa Bay continues to hog the spotlight with consistent news exposure about a strengthening market, such as Kathie Woods moving ARK Invest headquarters to St. Petersburg, or Bigger Pockets announcing the Tampa area as the the number one area to invest in 2021. Most of the time, this would mean that the area is likely going to yield lower returns as prices climb, however, Pinellas County remains one of the top places to invest and the upside only seems to be growing into 2022 and is likely still a “Strong Buy” for the foreseeable future. 

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Troy Nowak

Success in real estate stems from experience, integrity, knowledge, and most importantly, relationships. A successful real estate professional navigates many waters for their clients, and I am here to....

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