Cape Coral or St. Petersburg?

Question

Hi BP, I'm a newish investor looking for my first out-of state investment, and I'm exploring SW Florida markets including Cape Coral, Port Charlotte/North Port, and St. Petersburg. Would appreciate any insight from other investors about why you choose a particular market and how it's going for you there. Thanks!

Jared Decker · Answer

@Madigan Tumilowicz,Either location is a solid play for long term hold investing. I am only personally experienced in St Petersburg, but have several connections in Cape Coral that I speak with consistently.One thing to look at in both locations:St Petersburg: Prices have inflated to such intense rates right now. Inventory is very low and even non-investors know how much St Petersburg has exploded so rates are HIGH. (Though, I don't see much of a price deflation any time soon... if ever. No more room to build new homes in St Petersburg/Pinellas County unless leveling others).Cape Coral: (again, no personal experience but going from my connections in that market) Be careful with the infrastructure and engineering of the neighborhoods. Cape Coral was never developed for large scale population, so now the local govt is desperately trying to alleviate issues caused with the mass migration to SW FL.Tremendous upside in each area, so I believe you'll make a great investment once you decide!Trust the numbers.Jared

Peter Davis · Answer

@Madigan TumilowiczI'll heap on with Stetson and Donny and cast a vote for Cape Coral. Lots of positives for buy and hold SFR investors: current affordability, rental demand, future growth, and so on. Good luck!

Alex M. · Answer

Madigan, You have narrowed your search down to some excellent markets. I am an investor in St. Petersburg - I am also a lifelong resident of St. Petersburg. I am obviously biased and very pro - St. Pete ;) but I strongly believe St. Pete is one of the top areas to invest in the country. The population growth, job growth and wage growth in St. Pete have been tremendous and the city is experiencing a major boom in development near downtown. St. Pete actually led the entire country in rent growth in the first half of 2020 - even through Covid and massive increase in apartment supply (multiple 100+ unit A class apartment developments in the last year). As a single family rental investor, there is tremendous opportunity for you in St. Pete. All of the new development here is high end apartments and condos, so there is growing demand and decreasing supply in the mid-level rent and single family rental market. I strongly believe you'll experience strong appreciation and rent growth in the years to come in St. Pete. Beyond just real estate market factors - the lifestyle here is excellent and it is simply a wonderful place to live. And you can easily avoid flood insurance here as well. As a St. Pete resident and investor - I hope you choose St. Pete :) Good luck to you!

Jesús Núñez · Answer

@Madigan TumilowiczI grew up in Cape Coral. Was an agent in Cape Coral. Move to St. Pete. Bought in St. Pete. Both areas are very different as to what they provide and they cater to different groups of people. I have a difficult time seeing Cape pricing deflating. It’s marketed as the “Florida dream” to Midwesterners and NEers with a constant influx of retirees and families from other regions looking for good weather, safe community, and affordable cost of living. I believe pricing will continue to rise with demand in the short and long term.

Cliff Terry · Answer

Hi Madigan, I have mainly been a fix and flip investor for the last 4 years and I flip houses in all the areas you mentioned. We have started to grow our buy and hold portfolio and have recently purchased two SFR in the Port Charlotte area. I really like the Port Charlotte and North Port area for SFR buy and holds at the moment. Both areas still have price points that make sense for buy and holds. Thanks,

Madigan Tumilowicz · Answer

Thanks for all the great insight @Stetson Miller @Cliff Terry @Peter Davis @Alvin Taveras! One of my main concerns with Cape Coral and Port Charlotte is overbuilding. Do any of you foresee price deflation because an oversaturated rental market with all the new construction going on, or do you think that rental demand will keep up with increased inventory?

Alvin Taveras · Answer

@Madigan Tumilowicz Great question. I wouldn't be opposed to investing in any of these markets as each has there own opportunities. Saint Pete has seen a great turnaround in recent years and there are currently several large projects underway. There were a lot of older homes that were great for flipping as long as you enjoy working on the challenges that older homes provide. I would put Cape Coral, Port Charlotte & North Port in a separate category. These are more suburban and up and coming neighborhoods. Cape Coral is the largest and is seeing the greatest acceleration. New construction in North Cape, Port Charlotte & North Port cost about the same and yield similar rental rates. What type of investing was you look at?

Donny Herrera · Answer

@Madigan Tumilowicz,City of Cape Coral has some interesting studies about economic development, population growth and multi-family needs, which should help you learn more about the city: https://www.capecoral.net/edo/...I just started investing here in long-term rentals.Good luck!Donny

Stetson Miller · Answer

Hi @Madigan Tumilowicz,I can't speak for the other locations, but Cape Coral certainly has a lot to offer investors in terms of different investment strategies. In this city, many investors have recently found success in long term holds, short term rentals, spec home building, flips, and general new construction investment. What strategies were you looking to pursue? I would be happy to expand on any areas of interest!

Peter Miller · Answer

I'm partial to St Pete because I live here, but Cape Coral's prices offer a much lower entry point (depending on the neighborhood, of course.)