Are you looking to buy a property in Pensacola?
If so, then you’ve found the right place!
At first glance, the Pensacola property market may not seem worthwhile. While it is right on Mexico’s Gulf Coast, the city only has a population of about 50,000 inhabitants (a 10,000-person decline from what it was at the turn of the millennium).
However, the Pensacola real estate market is much bigger than that, as the city’s metropolitan area is home to nearly 500,000 residents.
Additionally, according to LittleBigHomes.com, the real estate market forecast for the twelve months ending with the third quarter of 2019 is positive. They also estimate that there is an 82 percent likelihood that home prices will rise in the third quarter of 2019.
Investing in Pensacola Real Estate
Real estate investing can be very lucrative. In fact, real estate has historically produced more wealth than any other industry. That said, real estate investing is not a guaranteed shortcut to quick wealth.
To succeed, you need to be diligent. So, the million-dollar question is: is Pensacola a good investment destination?
Well, it is if the current market trends are anything to go by. For starters, home values in Pensacola have gone up by 10.9% over the past year, and Zillow predicts that prices will rise by over 7.1% in 2020.
The following are six of the top reasons why you should consider investing in Pensacola real estate:
Reason #1: The city’s tourism is seeing steady growth.
Not only is the real estate in Pensacola affordable to locals and investors alike, but it is also responsible for attracting thousands of tourists to the area. It is home to a number of landmarks, historic tours, events, and festivals.
According to the latest values released by Visit Pensacola, the area attracted 2.1 million tourists last year. Additionally, the figures keep growing year after year. As a potential investor in the city’s real estate market, this is great news.
Investing in Pensacola real estate gives you the opportunity to earn good money that may increase over time as tourism numbers continue to grow.
Reason #2: Florida does not have a state income tax.
Although Floridians still have to pay federal income taxes, the state constitution prohibits state income taxes. This makes Florida one of seven such states in the country.
The state also stands out for its low property tax rate. At 0.98%, it ranks 26th in the nation in a recent analysis done by WalletHub. Factor in the low home values and this is where you will find the lowest overall ownership costs for a home in a coastal town.
Reason #3: The economy is ideal for a real estate investor.
The city’s real estate market is stable with projected steady, long-term growth. The economy is diversified, with many residents working in the tourism, healthcare, and manufacturing sectors. The educational and military sectors are also strong in the area.
Reason #4: You can expect a good ROI.
As of October, this year (2019), the average rent for an apartment in the city was $1,064—an 11% increase from 2018, when the average rent was $945.
According to Rent Jungle, one-bedroom and two-bedroom apartments in Pensacola rent on average for $940 and $1,110 a month, respectively.
Reason #5: Property appreciation is nearly a guarantee.
The city’s real estate market is expected to appreciate in the coming years. The city’s real estate appreciated by a whopping 40.68% over the past decade.
This is an average annual home rate increase of about 3.5%, putting it into the top 20% nationally in terms of property appreciation.
Reason #6: The real estate is still relatively affordable.
Pensacola real estate is often overlooked in favor of hotter markets like Miami and Orlando. This perhaps explains the low median price of real estate, which is about $160,000. This is roughly 25% less than the median home price in the state of Florida.
These are just some of the reasons that make real estate investing in Pensacola a potentially lucrative venture. Nonetheless, as with any real estate investment, buying in the right neighborhood is key. The location alone can make or break your investment.
10 Best Neighborhoods in Pensacola to Invest in Real Estate
According to neighborhoodscout.com, these are the best neighborhoods to invest in (because of their high real estate appreciation rates):
- N A St / N Reus St
- City Center
- N 18th Ave / Magnolia Ave
- N 12th Ave / E Jackson St
- W Garden St / N A St
- W Cervantes St / N E St
- N Palafox St / W Leonard St
- Sanders Beach
- Duncan Rd / Murray Rd
Quick Facts About Pensacola, FL
Real Estate: The average home in Pensacola costs about $144,600. In the last decade, homes have appreciated by about 10.2% annually.
Transportation: The average commute time is 19.9 minutes. (The national average is 6.5 minutes more.)
Population: Pensacola’s population is about 50,000 people. This is a decline of about 10,000 since the year 2000.
Weather and Climate: April, October, and November are the most pleasant months in Pensacola.
Cost of Living: The cost of living in Pensacola is 12.7% lower than the national average.
Economy: The unemployment rate is 2.9% in Pensacola compared to 3.9% for the national average.
The Bottom Line
If the market data is anything to go by, the Pensacola, Florida real estate market has a high potential for aspiring investors. The economy is doing great, and both homes and rentals are on a steady rise.
If you are just starting into the world of real estate investment, please consider hiring a real estate agent to help you make the best decision. Afterward, a professional property management company can help you maximize the potential of your investment.