In Orlando, property is cheaper than in Miami, and according to the financial analyst WalletHub, it is the best city in the state of Florida to invest in.
Taken from La Nación
Homes selling above list price, multiple offers on a property, or inventory disappearing in less than a week are some of the features that have dominated the Florida real estate market in the last year
However, for the first time in September, some indicators began to calm down. “With the average price falling slightly and inventory trending upward, we are seeing signs that things are stabilizing after months of this market being on fire,” said Natalie Arrowsmith, president of the Orlando Regional Realtors Association (ORRA). “The market is still very seller-friendly, but it is showing some signs of becoming more balanced again,” she explained.
According to ORRA, the average home price in Orlando fell by $2,000 in September compared to August, breaking a streak of 11 consecutive months of growth. Total sales in September dropped 5.25%, and homes remained on the market for an average of 27 days, an 8% increase from August. Inventory also rose for the fifth consecutive month, a slight 0.8% increase from August to September. None of these signs are alarming or perceived as a threat to the housing market.
“Orlando is one of the fastest-growing cities in the United States. For the fifth consecutive year, it has recorded record job growth (excluding the pandemic year), and that's why so many people are moving there. There are jobs, good weather, and a reasonable cost of living. That's what's caused the construction boom. Many large technology companies are setting up operations there. Companies with large payrolls find it advantageous to come to Florida because salaries are lower than in the North. Forty-seven percent of the workforce no longer depends on theme parks or tourism, which is huge because before, everything revolved around Disney. Today, the city has a life of its own,” says Rubén Kaufman, president of MIR Developments, a real estate development company in the area.
Kaufman also attests to boom . “We're starting with Millenia Park, 960 units on a site near the Millenia Mall. It consists of eight towers with 120 units each, plus a small shopping center. We launched sales for the first phase two months ago and we're already 80% sold. Sales are daily; we've never experienced this level of demand before. The market is booming,” he summarizes. Ninety-nine percent of buyers are purchasing for investment and rental income. Prices start at US$180,000 to US$250,000 with a typical annual return of 6% to 7%.
Disney, KPMG, Sonesta International Hotels, and InnovaCare Health Inc. are among the latest companies to announce plans to expand or relocate to the city. Disney, which already has a presence in Orlando, said it will move 2,000 high-paying jobs from California, for which it paid $46 million in September for nearly 50 acres in Lake Nona for its future office campus.
Jorge Kupferman, a broker at Miami Life Realty, says Orlando is performing very well. “It’s more attractive now because the returns are better than in Miami, and the prices are lower. Clients don’t care where they invest as long as the business is secure,” he explains, adding that 50% of his investors are Argentinian.
The market offers homes for short-term or long-term rental, and a large portion of the investment is channeled into new construction. “You can buy off-plan with a 10% down payment upon signing the reservation agreement and an additional 10% upon signing the contract. The remaining 50% is then paid during construction, sometimes in installments, and the final 50% is paid upon delivery. For the last payment, you can pay in cash or take out a mortgage with an annual interest rate of 4.5% for 30 years,” he explains. The requirements include, among others, proof of income, a letter from an accountant, bank references, and personal references. For a foreigner, the best option is to create a corporation or LLC to avoid inheritance taxes and higher tax burdens when selling.
According to Kupferman, short-term rentals yield between 7% and 10% annually, while long-term rentals (with annual contracts) offer around 6% profitability. The condominium itself often has its own management team for short-term rentals; they promote the rentals and generate returns for the investor. "The thing is, depending on the management, it can cause more headaches," he points out.
WalletHub, an online personal finance and investment tool, ranked Orlando as the best real estate in all of Florida and 40th nationally. To create its ranking, it compared 300 cities of varying sizes using 18 key indicators of real estate market attractiveness and economic strength. The variables range from average home price appreciation to job growth.
However, not everyone agrees. Daniel Rutois, a broker with Miami-based Rutois International Realty, believes Orlando was affected by Miami's surge. “The explosion in demand came from Miami-Dade, Broward, and Palm Beach counties. I think Orlando's price rose thanks to Miami, which is the promised land like New York was in the 90s,” he explains. “It's a good market, but imagine those who bought before the pandemic. For almost two years, they were stuck with nothing; it's still an area very dependent on tourism,” he says.
Mabel Pérez, from Century 21 Carioti, recounts the price surge of the past year: “What was happening was almost surreal. Houses were being sold like auctions. They're listed on Thursdays and bids are accepted until Sundays. And people are bidding more than the list price.” Pérez says the market calmed down in September, partly because the peak moving season is usually from June to August.
Pérez, who has lived in Orlando for 24 years, is somewhat skeptical about boom . “It has grown exponentially. There are a huge number of apartments being built, and rental prices have risen sharply. Before, you rented for US$700, and now they're asking US$1,000. Many new units are being built, but renting a room in those condos goes up to US$2,000. It's likely that many apartments will remain vacant; I don't see that much demand. We'll see what happens,” she says.
Another factor driving the city's growth is Lake Nona Medical City, the first medical city in the United States, spanning 263 hectares. Its development began in 2005 to house a medical school affiliated with the University of Central Florida. Today, it is home to hospitals, research institutes, and medical schools, with much more land still to be developed.
Orlando is home to the University of Central Florida, the nation's largest public university by student enrollment. Next year, the Brightline rail line connecting Miami, Fort Lauderdale, and West Palm Beach to the Orlando station will open. A new station is planned for the future at Disney Springs, the Disney resort complex.
