Florida – and Orlando in particular – has long been a favorite among real estate investors, in large part due to the explosive job growth and population growth that many Florida markets have seen over the past several years.
What’s not to love? Stunning beaches, beautiful weather, numerous landmarks and attractions, phenomenal job growth, and no income tax are just a few of the top reasons why new residents and investors are attracted to the Sunshine State.
When you think of Orlando, the first things that come to mind are likely Disney World and Universal Studios, pristine golf courses, and premium shopping outlets.
And while it’s true that Orlando is a mecca for tourists and international travelers, the location has also become one of the hottest markets for industrial and high-tech jobs, with one of the largest research parks in the country.
Why We Love Orlando
Did you know that Florida is the only place where some people learn to swim before they can even read? Summer in parts of Florida, including Orlando, lasts for 6 months, and it comes twice a year (see what we did there?).
It isn’t just the ideal climate that we love. Tax incentives and a low cost of living also attract new residents to this market, which leads to strong and consistent population growth.
Florida residents enjoy lower taxes than most of the country, which drops the cost of living down to an affordable level for many low- to middle-class Americans. These lifestyle elements and financial incentives explain why so many people are choosing to move to Orlando.
On top of that, employers are taking notice of the Sunshine State for its tax benefits, quality of living, and ability to attract top talent. Many companies are moving their offices and headquarters here, thus increasing both job growth and job diversity for residents.
The tremendous economic growth in Orlando has led to boundless opportunities, which, when combined with the high quality of living, makes Orlando a magnet for new residents. Orlando’s rate of population growth is the second fastest among the top 30 largest cities in the US, with over 1,000 new people moving to Orlando every week.
Orlando’s Job Growth & Job Diversity
Many employment sectors in Orlando have shown tremendous growth over the last year. Over the next 10 years the fastest-growing sectors will include home and healthcare services, manufacturing and construction, engineering and transportation, and computer systems design.
Named the #1 fastest growing city for entrepreneurs by LinkedIn News, Orlando has also become a hub for industrial and high-tech businesses, with some of the largest engineering, manufacturing, and aerospace companies taking up residence in the Orlando metro area. Some of these companies include Lockheed Martin, General Dynamics, Siemens, AT&T, and Boeing.
Having eight Fortune 500 companies headquartered in Orlando and the immediate surrounding areas, including Mitsubishi Power Systems and LPGA Tour NASCAR, Orlando is a hotbed of opportunity for people looking to move to the area.
On the tech side, the talent coming out of the University of Central Florida and other regional institutions helped Astronics Test Systems, a subsidiary of Astronics Corp., decided to move its headquarters to Orlando’s Central Florida Research Park. Meanwhile, background check software firm Checkr considered locations in Texas and New Mexico for its third headquarters before ultimately deciding on Orlando. Not surprising that Yahoo Finance voted Orlando as the #1 Best Place to Work In Tech with the second fastest growing salaries for tech workers, as reported by Dice.com.
Business-friendly regulation and the tax climate, combined with real estate costs that are lower than some of the state’s other metros, make metro Orlando an attractive destination for businesses looking to relocate.
There’s so much potential for Orlando to be what Austin is to Texas, what Atlanta is to Georgia — a booming hub where startups flock from around the world to dream, innovate and grow. On top of a strong and growing tech presence, including being voted #2 in having the most startup activity based on average startup formation rate by Roofstock in 2021, Orlando is also home to several major defense employers, including the National Center for Simulation, US Army Research, Patrick Air Force Base, and Cape Canaveral Air Force Station.
Going hand in hand with strong population growth, the Orlando Economic Partnership is projecting jobs to grow by 19% by 2030 – a full 10 percentage points faster than the United States average.
And as those new workers flood the area for the job opportunities, they’ll need a good place to live, which is why multifamily investments in the Orlando area have such a strong outlook.
Orlando’s Population Growth
Experts predict massive population growth for Orlando. The city of Orlando is currently home to over 300,000 people, with 2.5 million residents in the greater Orlando metro area. Experts believe that the population of the Orlando area will more than double in the coming years, hitting 5.2 million residents by 2030.
Florida and Texas are the most popular moving destinations in the US, according to a new study from Forbes Home analyzing US Census Bureau data. The Sunshine State shares the #1 choice spot for movers coming from seven different states, with the most coming from Georgia, Pennsylvania, Ohio, Michigan, and Indiana.
Despite a higher than normal pace of construction activity, a closer look at Orlando’s housing shows it’s arguably not sufficient when compared with the rapid pace of population growth.
Essentially, that means that there are more people moving to the area than there are homes or apartments available, which is a major driver in keeping multifamily demand strong in the coming years.
Areas that have experienced strong levels of absorption over the past year include I-Drive, North Orlando, Southwest, and Downtown Orlando.
With population growth anticipated to track at a healthy pace moving forward, additional housing supply will be necessary, and housing demand will remain strong.
Orlando’s Rental Demand & Rent Growth
In addition to the soaring population growth, Orlando has a stable rental base compared to many other states. Because of the high quality of living, Orlando attracts not only young professionals and families, but also a high percentage of retirees looking to rent.
Retirees usually have a regular income, tend to stay longer compared to younger tenants, and generally treat the properties better than younger renters.
Renter demand in Orlando has been considerable, fueled in large part by the large amount of inmigration to the area. Despite a significant influx of new supply in 2021, the market’s vacancy rate drifted lower due to record demand. There is no reason to expect demand will slow substantially in the near term, even as the supply pipeline remains active and economic headwinds happen.
When analyzing individual Sun Belt markets, a dramatic change in rent growth over the past 11 months can be seen. Only four of 11 Sun Belt markets have rent growth above the national average, with Orlando, being the leader at 7.1%.
Orlando checks all the boxes of a top real estate investing market. The growth in the area, especially in recent years, has been tremendous. In the video below, we dive further into what we love about this market and why we’re investing there.
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