To succeed in real estate investing, you have to invest in the right market. But do you know which locations will be the most profitable?
There are several factors you should consider, including the economy, population, and state regulations. And, of course, location is key–wherever you choose, it has to be both desirable for the end customer and profitable for you.
Traditionally, you’d have to put in a lot of research to find the right city. Investors spend hours online crunching numbers. The process can be tedious, confusing, and downright boring.
To save you the time and the effort, we’ve put together a soup-to-nuts guide to real estate investing in Ocala. An Ocala investment property is one that is typically safe — if you know the area. As a potential investor, we want to help you better understand the lay-of-the-land.
Even better? This guide will help you choose the right market and get started on your road to financial freedom.
Now let’s jump in!
Why an Ocala Investment Property?
Ocala might seem like a surprising choice for a real estate investor. The city itself is only home to roughly sixty thousand people and it’s known for its award-winning horse farms more than anything else.
But the broader metropolitan area (also part of the housing market) has a booming population of over three hundred thousand. Some big-name jobs have come into the county in recent years and retirees and families alike are making a beeline for the ‘Horse Capital of the World’.
These factors make an Ocala investment property a great choice for investing in 2020 and beyond.
Here are a few more reasons why we think the Ocala real estate market provides one of the best opportunities for investing in the U.S. today:
- More Bang for Your Buck
Ocala is situated right in the middle of three huge metropolitan centers: Orlando, Jacksonville, and Tampa. They’re all roughly 90 minutes away and the median list price for all three cities ranges between $240,000 and $270,000. In Ocala, you can stretch your dollar a lot further. With an average list price of about $150,000, it’s one of the most affordable markets in Florida.
- Supply vs. Demand
Barriers to supply don’t often come up in conversation. But when it comes to real estate investing, they can make or break you. Why? Because they affect how many competing units can be built in your area. Ocala is home to several protected wilderness areas, including Ocala National Forest and Goethe State Forest, which are off-limits to development. Paired with a recent influx of new employers, there is more demand for rental properties than current supply can meet.
- Central Location
People want to live close to jobs, shopping, and other community centers. And as an investor, you can give yourself the best chance of success by buying properties where people want to live. Ocala is an ideal community for a variety of different populations: In addition to being a short drive away from two major tourist destinations, it offers two nationally recognized hospitals, a wide array of manufacturers, a thriving culinary scene and plenty of family-friendly activities.
- Favorable Tax Climate
States and cities all have their own tax regulations–some (much) higher than others. Properties in areas with a high tax burden, such as having a state income tax and high property taxes, negatively impact investors as they reduce the investor’s annual income, so there are lower yields in these higher-taxed states. The state of Florida has no income tax and very low property taxes. The property tax rate in Florida is approximately 1% of the property value.
- High Demand for Rental Properties
More and more people and businesses are seeing the benefits of purchasing an Ocala investment property. A a result we’ve reached a point where household formation and new residents moving to the area is higher than construction starts, which means we have a high demand for rental properties. Some families moving to the area prefer to rent first, while they get to know their new town. Others are ready to make the move to home ownership–but our population increase is higher than new construction starts, so these families continue to rent due to inventory restrictions.
- A Rising Population
Many criteria, from a pleasant climate to affordable housing prices, attract people to Ocala. In recent years, new job prospects have also led to an influx of relocations as families search for greater opportunity. Paired with the constant inflow of retirees and horse-lovers, there are plenty of individuals willing to pay premium rates on rental properties that meet their lifestyle.
- Large Number of Students
With a College of Central Florida campus, Rasmussen College, and Webster University all located in Ocala, there is a large population of students for a rather small city. Rather than commuting back and forth, many of them choose to rent houses near campus–a near endless source of quality tenants.
- A Growing Job Market
Real estate investments can only be profitable if the people living in them have jobs. In Ocala, there is plenty of opportunity for people to find (and keep) stable jobs: the large number of retirees creates a constant demand for medical professionals and caregivers. The horse farms are always in need of trainers, veterinarians, and stable hands. And several big brands, including AT&T, AutoZone, and Chewy, now call the area home.
- Great Price-to-Rent Ratio
The price/rent ratio is a great way of evaluating an area for its potential profitability. The higher the price to rent ratio, the worse the market is for profiting from real estate investing. To calculate, simply take the median price divided by the median yearly rent. In Ocala, that would be roughly $150,000/$14,400–or a price/rent ratio of 10.41. To put that in perspective, the price to rent ratio for San Francisco, CA, is 50.11 and the price to rent ratio for Orlando, FL, is 16.83.
- Landlord-Friendly Laws
The most important thing to consider before purchasing an investment property? Local laws and regulations! Florida as a whole is a very landlord-friendly state. Florida evictions take around 30 days from start to finish, whereas in other states evictions can take months to years in some cases. Tenants who violate key lease terms in Florida rentals (maintaining the home in the same condition as when they first rented it, violating pet terms or allowing unauthorized guests) can be evicted after their second offense in a year.
If you’d like to learn more about finding the right Ocala investment property for you, reach out today! Our staff of knowledgeable, friendly realtors are available to answer all of your questions. It’s time to get started on the road to financial freedom!