Pros and Cons of Buying Land in Florida

As a historic paradise for both homesteading and hospitality industries alike, modern Florida real estate retains strong intrigue for investors seeking stable returns on land holdings ranging from agricultural and timber acreage to multifamily residential development sites. With over 18 million acres across Florida still operating cattle ranches, citrus groves, and managed woodlands based on the United State Department of Agriculture 2022 Asset report, opportunities abound for those considering purchased vacant property for either passive cultivation income or awaiting next stage property upgrades pending market growth. 

Yet the same attributes luring migration from both domestic and international parties brings complexity around fluctuating property valuations vulnerable to macroeconomic variables. This makes thoughtful underwriting and risk mitigation imperative when analyzing the pros and cons of buying land in Florida, either to hold vacant through cycles or pursue strategic improvements catering to incoming demographic preferences across both permanent and seasonal snowbird residents. This guide examines key considerations around prevailing tailwinds and headwinds shaping the Florida land investment thesis.

The Pros of Buying Land in Florida

With its sunny climate, growing population, and popularity as a vacation destination, Florida offers many benefits for landowners in the state. Here are some of the biggest pros to consider when weighing a land purchase in Florida.

Year-Round Warm Weather

One of the biggest draws of Florida is enjoying warm weather and mild winters. Even North Florida sees average winter temperatures in the 60s, while South Florida stays even warmer in the 70s and 80s. Being able to spend ample time outdoors all year long thanks to the sunshine and warmth makes owning land in Florida extremely appealing.

Outdoor enthusiasts can boat, golf, swim, fish and partake in many other activities year-round that aren’t possible in colder climates. For northerners tired of being stuck inside during winter, Florida’s pleasant weather is a huge benefit of owning property there. The ability to live an active outdoor lifestyle 365 days a year adds to a high quality of life.

Expanding Population

Florida has seen rapid population expansion in recent decades as more people relocate to the state for the warm climate and lack of income tax. From 2010 to 2020, Florida’s population grew by over 14% to 21.5 million residents. This influx of new residents and retailers has driven robust housing demand across the state.

For landowners, Florida’s booming population provides a growing consumer base to provide services to or eventually sell land to. Locations near expanding metro areas are likely to see property values rise as demand outpaces supply. Owners can eventually cash in on the land appreciation fueled by population growth.

Tourism Dollars

In 2019, Florida welcomed 131.4 million visitors who spent over $91 billion. Theme parks like Disney World and beach destinations like Miami draw huge numbers annually. Catering to these tourists through services like hotels, recreation, restaurants and retail can be very lucrative.

Owning strategically located land near top attractions or visitor hot spots provides major opportunities to tap into Florida’s tourism spending.even owning rural land, there is potential to attract ecotourists or develop tourism-related businesses. The endless flow of visitors helps drive Florida’s economy.

No State Income Tax

Unlike most states, Florida does not levy a personal income tax on residents and only has a 5.5% corporate tax. This saves individuals and businesses thousands in annual taxes compared to states with 3-7% income tax rates. The extra money left in people’s pockets provides more disposable income to enjoy Florida’s amenities and invest.

For land buyers relocating to Florida, avoiding state income taxes helps offset other costs like property taxes and homeowners insurance. It’s a definite financial perk that enhances the Sunshine State’s appeal.

Abundant Water Access

Over 1,350 miles of coastline plus a myriad of inland lakes, springs, wetlands and rivers provide ample waterfront land options. Water access is a top priority for many buyers seeking fishing, boating, swimming and coastal living. Waterfront homes command premium prices in Florida for good reason.

Inland waterways allow recreation and relaxation right out your back door. For boating enthusiasts, owning land with a dock or boat ramp enables instant access to hit the water. Anglers can cast a line without trailering their boat miles away. Kayakers and paddleboarders can explore area waterways with ease.

With advantages like year-round warmth, a growing population, tourism dollars and abundant water access, it’s easy to see why land in Florida offers so much upside. The state’s pros make it highly attractive both as a place to live and as an investment for financial upside down the road. Taking advantage of these benefits starts with buying the right land in Florida.

The Cons of Buying Land in Florida

Risk of Natural Disasters

While the sunny weather is appealing, Florida's climate also brings the risk of natural disasters. The state is vulnerable to hurricanes from June through November. Powerful storms can cause extensive wind and flooding damage. Homeowners insurance rates in Florida are among the highest in the nation due to this risk. Wildfires and sinkholes are other potential natural hazards to consider.

Hot and Humid Summers

From about May to October, Florida can be extremely hot and humid. Daily high temperatures often reach into the 90s, paired with humidity levels over 70%. For some, the hot, muggy weather during summer is drawback to owning property in Florida. It limits time for enjoying outdoor activities.

High Real Estate Prices

Driven by high demand, real estate in Florida is expensive. Land prices per acre range widely based on location. But buyers can expect to pay $5,000 per acre or higher on average. Near major metro areas and popular beach towns, acreage often sells for over $100,000. The high real estate costs make buying land in Florida a significant investment.

Ongoing Maintenance Costs

Owning land in Florida also comes with regular maintenance expenses. The heat, humidity, and salt air cause faster deterioration. Owners of vacant lots have to budget for expenses like weed control, tree trimming, and clearing brush. Developed properties require repainting exteriors every 5-7 years and new roofs every 10-15 years due to sun damage. These recurring costs add up.

Property Taxes

While Florida comes out ahead of many states for tax burden, property tax rates are on the higher side. The average effective property tax rate is 0.93% but reaches over 2% in some counties. Based on the high property values, total taxes can be substantial. This is something for buyers to factor when budgeting for owning land.

Long Hurricane Evacuation Times

During major hurricane threats, mass evacuations clog Florida's highways for hours. Roads like I-95 and I-75 have extensive congestion trying to funnel residents and visitors out of harm's way. Evacuation times can stretch a normally 2 hour drive into 10-12 hours. For land owners in coastal regions, evacuating can be extremely challenging.

Restrictive Building Codes

To protect against hurricanes and floods, Florida has adopted stringent building codes. Homes require specialized construction to withstand high winds and storm surge. Elevating structures above base flood elevation is also often required. Complying with Florida's building codes makes construction more complex and expensive.

Key Factors to Consider Before Buying Land

Buying land in Florida can be a great investment if done strategically. Here are some important factors to consider before purchasing land:

Location - As with any real estate purchase, location is king. Land near growing cities or attractions will hold its value better long-term. Be selective about selecting an ideal location.

Purpose - Decide how you plan to use the land - building a home, rentals, farming, etc. Not all locations are suitable for every purpose so have a clear intent.

Flood zone - Due to hurricanes and sea level rise, Florida has substantial flood prone areas. Check FEMA flood maps thoroughly before purchasing land.

Regulations - Research local zoning restrictions, development codes, and homeowners association rules. Make sure you can build/use your planned structures.

Access - Ensure the land has proper road access and utility connections. Lack of access will deter buyers.

Surveys - Carefully review surveys to check exact property boundaries and easements. Don't assume land is buildable until surveyed.

Inspections - Inspect land thoroughly for potential problems like drainage issues, protected species/trees, odd topography.

Price - Get fair market value based on recent comparable sales. Overpaying severely impacts investment return.

Buying land in Florida can be a smart investment given the state’s desirable climate, booming population, and popularity as a vacation destination. However, buyers need to carefully weigh the potential risks and costs that come with owning property there. Conducting thorough due diligence before purchasing land is essential. With the right property in a strategic location, owning land in Florida can be financially and personally rewarding over the long-term.

How Land Boss Can Help You Buy Land in Florida

With over 100 successful land deals under their belt, the seasoned team at Land Boss has the experience and expertise to smoothly guide you through buying property in Florida. They know how to avoid common pitfalls and make the process hassle-free.

Fast Cash Offers

Land Boss specializes in prompt cash offers for vacant land. Thanks to their robust financing capabilities, they can buy without traditional bank loans or waiting on mortgages. For sellers needing to unload land fast, Land Boss puts competitive bids on the table within days.

Handle Negotiations

Acquiring land requires complex negotiations. Land Boss professionals adeptly navigate discussions to reach fair pricing for both parties. Their past deal experience gives them savvy negotiation skills to leverage.

Iron Out Issues

From title issues to liens to easements, land transactions can hit snags. Land Boss has seen it all and possesses the skills to resolve problems if they arise during purchase. They work to keep deals on track.

Speedy Closing

With in-house financing at the ready, Land Boss closes promptly once an offer is accepted. Their familiarity with the closing process —from paperwork to underwriting—keeps things moving efficiently.

Final Words

Buying land in the Sunshine State can be a smart move if you plan carefully and understand all aspects of owning property there. Florida offers many alluring advantages like great weather, booming population growth, and no state income taxes. However, buyers also need to weigh risks like hurricanes, high real estate prices, and maintenance costs. Conduct thorough research and due diligence on any land you consider purchasing in Florida. Seek professional help from companies like Land Boss to handle negotiations and buying process intricacies. For both part-time residents and investors, owning the right land in Florida can provide enjoyment and financial returns for many years to come. With proper preparations, you can reap the benefits while minimizing the drawbacks of buying land in this popular state.

Frequently Asked Questions (FAQs)

What are property taxes like in Florida?

Florida's average property tax rate is 0.93%, higher than many states. Exact rates vary by county from 0.50% to over 2%. With Florida's high home values, total taxes can cost several thousand dollars annually.

Is financing available for vacant land?

It is difficult to get traditional mortgages for vacant land. Many buyers purchase land in Florida with cash or by tapping home equity with a HELOC. Some builder programs offer land/construction loans.

Can I build on land in high risk flood zones?

Yes, but you must elevate living spaces above the base flood elevation and follow stringent building codes. This adds complexity and costs to construction.

How can I estimate land value in Florida?

Research prices per acre for recent comparable land sales nearby to gauge market value. Adjust based on property differences like road access and utilities availability.

What legal rights do I have on land I own in Florida?

Landowners have rights to reasonable use and enjoyment of their land. However, state and local regulations can limit activities like burning, building structures, removing trees, etc.

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