Tampa Bay conjures up images of sun, sand, and theme parks. But this expansive metro area is more than a family vacation spot. Tampa is a significant economic hub and is among the top 25 metro areas by size in the United States.
Its size, strong economy, and diversity make a market ideal for real estate investors. Tampa ranked in the top 10 of PWC’s 2019 Emerging Trends Real Estate Report. Even during the pandemic, Tampa stayed in the top 12, consistently outperforming other large metropolitan areas.
Take a closer look at the metrics around Tampa’s market, and you’ll see this is an excellent market for real estate investing across niches.
Tampa Population Growth
With a population of 4.3 million, the Tampa Bay area is the third-largest metro area in Florida, when you include its nearby city of St. Petersburg and the numerous suburbs.
The population inside the city limits exceeds 3 million. The city has grown by 1.7% in the last year, and expansion isn’t slowing down. The Tampa Bay Economic Development Council expects the total population to grow by 15% in the next ten years.
To put that into perspective, Hillsborough County (part of the Tampa Bay area and surrounding the Tampa city limits) grew by almost 21,000 people between July 2017 and July 2018. When looking at growth over the past decade, the county saw a net migration of +150,000 residents.
This steady increase in population feeds the real estate market, creating a strong demand for housing and commercial real estate. This creates more investment opportunities.
Tampa Job Market
Tampa is known for a thriving tourism and hospitality industry. With its theme park attractions and beaches, cruise port, and proximity to Orlando, it draws many visitors.
Unlike the nearby Orlando metro, Tampa is less reliant on its tourism industry. The city has an increasingly diverse job market. Tampa’s economy is worth a whopping $130 billion. This is partially thanks to a growing workforce and the real estate market.
Part of Tampa’s economic strength comes from financial organizations, communications, STEM research, retirement, and education industries, to name a few. Tampa is home to four Fortune 500 companies and is the headquarters for 19 firms. Tampa Bay’s top employers include Publix Supermarkets, Bay-Care Healthcare Systems, Verizon, TECO Energy, Times Publishing, Bealls, OSI Restaurant Partners.
The strength of the market also shows itself in job growth. In the past year, the Tampa metro area added 34,300 jobs. Construction is also well represented, with 8,000 new jobs added in 2020. The city leads all of Florida in new job creation.
With key industries manufacturing and financial services showing job growth, Tampa’s job market experienced a strong rebound from the early pandemic dip.
Tampa Housing Market
The sunny tropical skies in Tampa draw people of all demographics. It’s a hub for retirees, young professionals, families, and everyone in between.
A major reason beyond the weather people are attracted to Florida living? Tampa homeowners don’t pay any state income taxes or estate taxes, and property taxes are low.
The other benefit to Tampa is its real estate market. Compared to other major urban areas, Tampa is still affordable. Zillow reported that the average home in Tampa was worth $270,958 as of October 2020. The median sale price of a single-family home in Hillsborough County was $297,500 in January 2021, up 15.4% from the year prior.
Housing ventures are even more attractive because of the economic forecast. The Tampa Bay Times reported that 90% of surveyed experts expect the Tampa real estate market performance to meet or exceed the national housing average. Housing prices are expected to increase by 8.5% in the next 12 months.
These factors make Tampa ideal for the “buy low, sell high” mindset of real estate investors.
Tampa Rental Market
When investing in Tampa property, real estate investors have options. Consider short-term or long-term residential rentals thanks to the thriving tourism industry.
Over 22 million people visit Tampa every year, meaning tourism plays a large role in the rental market. This makes Airbnb and other short-term rentals ideal. Your best bet would be to find properties near downtown attractions or across the bay in Pinellas County near the beaches.
Investing in any rental properties can lead to a significant payoff. A traditional rental will likely earn you $1,909 a month. Riskier short-term rentals are expected to net $2,490, according to Mashvisers’s Tampa housing stats.
As for long-term leasing, about 45% of Tampa’s population are renting, creating an opportunity for the savvy investor. The average gross yield of a Tampa rental property is 12.5%. Rents are expected to increase steadily through 2025. This is well above the national average of 9.2%. Tampa is 3rd nationally for the highest-grossing rental market.
With housing and real estate, it’s all about location. Temple Terrace, Sun Bay South, and Courier City/ Oscawana are the three most popular areas for renters.
Invest in Tampa Real Estate
Tampa is rich in opportunity, with a diverse market and booming economy. Investors can leverage the trend of increasing rent and housing prices experienced in 2019 and 2020. Encouraging projections for 2021 and the years ahead mean Tampa is a strong market for real estate investment.
