The 5 Best Cities To Buy a House in Florida for Investment (2025 Update)

Florida continues to offer some of the most attractive real estate investment opportunities in the country and 2025 is proving to be no different. With no state income tax, high rental demand, and a steady influx of new residents, the Sunshine State remains a stronghold for both seasoned and first-time investors. But when it comes to choosing the right city to buy in, market conditions, rental yield, and long-term growth potential matter more than ever. 

To help guide your next move, we've updated our list of the best cities to invest in Florida real estate based on the latest trends, property values, and investor activity. Whether you're focused on luxury rentals, short-term income, or long-term appreciation, these five cities are making waves in 2025. 

Key Factors To Consider When Choosing an Investment Property in Florida

Location

Choosing the right location for your Florida investment property is essential to maximizing both rental income and long-term appreciation. In 2025, several high-performing markets offer a unique mix of growth, demand, and opportunity for real estate investors. 

Local Real Estate Market

Start by assessing the local real estate market and surrounding economic activity. Neighborhoods like Edgewater (Miami) are seeing a surge in luxury development and waterfront construction, while cities like Tampa are experiencing rapid job growth and infrastructure investment that drive sustained rental demand. These factors create strong momentum for both short-term cash flow and property value growth. 

Tourism

If you're investing in vacation rentals or targeting seasonal demand, consider markets with strong tourism economies and consistent visitor traffic. Palm Beach offers a prime opportunity for luxury short-term rentals during high season, while Edgewater appeals to business travelers and digital nomads thanks to its proximity to Downtown Miami and lifestyle perks. 

Population Growth

For long-term rental strategies, focus on cities with expanding employment sectors and population inflows. Orlando and Tampa continue to attract renters seeking affordability and access to jobs in tech, healthcare, and finance. Cape Coral, while more affordable, is also seeing impressive growth due to its boating lifestyle and low inventory of rental-ready homes—factors that support steady occupancy and income. 

Legislation

Lastly, consider zoning laws, HOA restrictions, and local development rules, which can vary across markets. Some newer condo buildings in Edgewater may have short-term rental restrictions, while parts of Palm Beach may limit renovations or exterior upgrades due to preservation ordinances. Understanding these nuances upfront can help ensure your investment aligns with your strategy. 

Best Places To Buy a House in Florida for Investment

1. Fort Lauderdale

Fort Lauderdale’s tourism-driven economy and proximity to Miami continue to support strong rental performance in 2025. The city’s boating culture and expanding downtown have driven demand for both vacation rentals and luxury long-term leases. As of June 2025, average asking rents in the metro grew 2.3% year-over-year and is 31% higher than the national average.

In addition, the median listing prices in Fort Lauderdale have softened ~5.7% year-over-year,  creating a more balanced market which gives investors greater negotiating power on acquisition costs. Neighborhoods like Victoria Park and Flagler Village offer attractive returns, while beachfront condos remain popular among snowbird and international renters. 

2. Edgewater (Miami)

Edgewater has solidified its place as one of Miami’s most promising submarkets for real estate investment. This rapidly developing neighborhood offers waterfront views, modern high-rises, and close proximity to both Wynwood, Midtown, and Brickell. In 2025, Edgewater is attracting a wave of digital nomads, corporate renters, and relocating professionals, all looking for access to the city with a quieter, upscale feel.

In 2025, the Edgewater market had median sales price around $845,000 and median rents at $4,286. With rental yields exceeding 6.1% and continued new construction along Biscayne Boulevard,  Edgewater is a strong pick for both mid-term and long-term rental strategies. For investors wanting Miami prestige without Brickell pricing, this submarket hits the mark.

3. Tampa

Tampa’s real estate market is thriving in 2025, driven by a booming job market, new infrastructure projects, and a growing population of young professionals. In 2025, Tampa topped the FT-Nikkei "Investing in America" list as the most attractive city for foreign mulit-nationals, thanks to economic diversification and proactive city planning. The city blends affordability with lifestyle perks, offering waterfront living, top-rated dining, and an increasingly vibrant downtown core, with neighborhoods like Midtown and Seminole Heights are experiencing a wave of revitalization and investor activity. 

With median home prices just over $450,000 and rental yields hovering between 4-6%, Tampa offers a trifecta of affordable entry, strong rental demand, and yield potential. Investors are finding success in multifamily units and duplex conversions. If you're looking for a Florida market that still has room to grow, Tampa deserves a closer look. 

4. Palm Beach

Palm Beach continues to shine in 2025 as Florida’s premier luxury real estate market. Known for its exclusivity and limited inventory, the area is a magnet for high-net-worth individuals and seasonal renters seeking privacy and elegance. Demand remains consistently high for waterfront estates, gated community homes, and turnkey condos in prime locations.  Although the median price has climbed over $2.6 million, investors targeting Palm Beach typically prioritize appreciation and prestige over yield. That said, short-term furnished rentals during the high season (November through April) still generate strong cash flow.

Key to the momentum is a surge in wealthy New York transplants: about 20% of listing views now come from the Northeast, which has fueled an 89% county-wide price increase since 2019. Additionally, the post-2025 "Trump bump" in areas near Mar-a-Lago continues to supercharge the ultra-luxury market, with $5M+ home sales tripling and contracts for $10M+ properties quadrupling following the election. For investors seeking stability, luxury, and long-term value, Palm Beach remains one of Florida’s most coveted markets. 

5. Cape Coral

Often overshadowed by larger metros, Cape Coral has quietly become one of Florida’s top-performing markets for real estate investors in 2025. With its extensive canal system, boating lifestyle, and relatively low home prices, the city is attracting families, retirees, and snowbirds alike. Zoning flexibility and growth-friendly policies make it a particularly easy place to invest. 

Compared to pricier Florida markets, Cape Coral offers a lower entry point with median home price around $369,000, making it an attractive portfolio builder. Cape Coral is also considered an investor-friendly location with favorable short-term rental regulations and an average gross yield of 12.77% for vacation rentals during high season. For investors seeking strong returns and room to scale, Cape Coral offers one of the best combinations of affordability and upside in the state.

Trending Markets for Savvy Real Estate Investors in Florida

Florida continues to offer diverse, high-potential markets for real estate investors in 2025. From luxury coastal enclaves to fast-growing urban centers, these trending cities stand out for their rental income potential, property appreciation, and investor-friendly dynamics. 

Sunny Isles Beach

Dubbed the “Florida Riviera,” Sunny Isles Beach continues to attract a niche global buyer profile, ultra-high-net-worth individuals and international investors seeking branded luxury, resort living, and long-term asset preservation. In 2025, the median listing price sits around $776K with per-square-foot rates near $615, while median sale prices hover at $645K, reflecting both opportunity and upside in a market defined by exclusivity rather than velocity.

The local culture is driven by foreign capital, multigenerational wealth, and cash buyers prioritizing privacy and beachfront access. The condo market closed 110 transactions totaling $403.7 million, a strong indicator of sustained appetite for branded luxury, underscoring continued demand for branded residences like Bentley and St. Regis. With limited oceanfront inventory, world-class amenities, and proximity to Bal Harbour and Aventura, Sunny Isles remains a top-tier choice for investors seeking lifestyle-driven returns and long-horizon appreciation in a stable, prestige enclave. 

The Florida Keys (Islamorada, Key Largo)

The Florida Keys remain a premium vacation rental destination, despite limited inventory and environmental constraints. In June 2025, the median listing price in Key Largo reached $1.5 million, up 10.8% year-over-year, reflecting their exclusivity. Rental demand remains strong thanks to the area's world-class fishing, diving, and boating appeal. Investors focused on vacation short-term rentals can capitalize on high nightly rates and year-round tourism. 

Surfside

Just north of Miami Beach, Surfside has emerged as a boutique luxury market driven by new oceanfront developments and low turnover. It's a favorite among investors interested in luxury spec home construction and seasonal rental demand with a high nightly value. Home values have climbed, with the median listing home price in Surfside at roughly $1.4 M. As of 2025, limited inventory and rising prestige make Surfside a long-term play for those seeking appreciation in an intimate, walkable setting.

Vaster recently contributed to this momentum by closing a $25 million construction loan for two ultra luxury spec homes in Surfside, developed by Kort Development and designed by Kobi Karp, totaling over 23,000 square feet across 600 88th Street and 9540 Bay Drive, both featuring private docks and expansive bayfront views. 

St. Petersburg

St. Petersburg offers a winning combination of affordability, lifestyle appeal, and consistent appreciation. Its vibrant downtown, proximity to Tampa, and expanding arts and tech scene attract both full-time residents and tourists. Investors can expect rental yields of around 4%–6%, especially in neighborhoods like Old Northeast and Kenwood. With rising demand and reasonable entry points, St. Pete continues to gain traction as a smart investment play on Florida’s Gulf Coast. 

How To Finance Your Investment Property in Florida

Financing an investment property in Florida requires careful planning and an understanding of your loan options. Traditional home loans, such as conventional loans, are available for real estate investors, but they often take longer to qualify for due to stricter requirements. To qualify for these loans, you’ll typically need a good credit score, a significant down payment (usually 20% or more), and a solid debt-to-income (DTI) ratio. The application and approval process can be time-consuming, which may cause investors to miss out on time-sensitive opportunities.

In such cases, private financing with a local lender can help bridge the gap until permanent financing is secured. Private loans, also known as bridge loans, offer flexibility and speed, making them ideal for investors who need to close deals quickly. By working with a local lender, you can often secure short-term financing for acquisitions or renovations while arranging long-term conventional financing. This is particularly helpful in competitive markets where fast closings are essential. 

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In addition to conventional loans and private financing, investors may also consider Non-QM financing options, such as DSCR loans. DSCR (Debt Service Coverage Ratio) loans are designed to assess the income potential of the property rather than relying on the borrower’s personal income. This makes them especially attractive to experienced investors who have strong rental income projections but may not meet conventional income requirements.

For experienced investors, a cash-out refinance or a home equity line of credit (HELOC) can also be an effective way to leverage existing property equity to purchase new investment properties. Working with a mortgage broker can help you explore all your options and select the one that works best for you.

Tips for Maximizing Your Investment Return in Florida

To ensure the highest returns on your Florida investment property, consider these best practices:

Choose High-Demand Areas: Focus on properties located in popular tourist destinations, coastal cities, or areas with growing job markets. Locations near beaches, downtown districts, or emerging neighborhoods offer stronger rental potential and property appreciation.

Maintain a Competitive Rental Rate: Research the rental market in your area and price your property competitively to avoid vacancies. Regularly adjusting your rates to align with market conditions ensures a steady flow of tenants and maximizes your rental income.

Consider Property Management: If you're investing in vacation rentals or multiple properties, a property management company can handle the day-to-day operations, such as maintenance and tenant relations. This helps keep your property in good condition and maintains high tenant satisfaction.

Stay Informed on Local Regulations: Ensure you're aware of local zoning laws, short-term rental restrictions, and any other regulations that may impact your ability to rent the property or make future improvements. Cities like Sarasota or Fort Lauderdale may have specific requirements that could affect your returns.

Use Leverage Wisely: When financing your property, use tools like cash-out refinances or home equity lines of credit (HELOCs) to free up capital for additional investments. This allows you to grow your portfolio faster while keeping costs manageable.

Plan for Seasonality: In areas with heavy tourist traffic, anticipate fluctuations in rental income during off-peak seasons. Adjust your pricing or consider offering longer-term rentals during slower periods to keep the property occupied year-round.

Monitor Market Trends: Stay informed about real estate trends and regional developments. This helps you make well-timed decisions on buying, selling, or refinancing your investment properties for maximum return.

Strategic Partnership with a Local Lender

Florida offers a diverse range of opportunities for real estate investors, from bustling cities to serene coastal towns. By carefully evaluating key factors such as local market trends, rental demand, and property conditions, you can identify the best locations to maximize your investment returns. Financing options are varied, and understanding the best fit for your financial situation can further enhance profitability.

With strategic property management and staying attuned to market shifts, you can successfully capitalize on Florida’s dynamic real estate market. Whether you’re a seasoned investor or new to the scene, Florida’s promising locales provide ample potential for a lucrative real estate investment.

Contact Vaster today to partner with a local lender who understands the dynamics of your Florida real estate investment.

Sources:

Housing Prices in St. Petersberg, FL | Rocket Homes

Top 5 Housing Markets Poised For Growth In 2025 | Yahoo Finance

Key Largo, FL Housing Market | Realtor.com

Real Estate | Miami-Dade County

Tampa Housing Market | Houzeo