Tired of the sweltering heat this year? Ready to hit the beach and just hang out under palm trees, with seaside breezes pushing your hammock? It might be time to take a serious look at vacation homes in the South, according to real estate firm Zillow.
“Homeowners want a second home purchase to have strong investment potential,” Zillow Economist Skylar Olsen stated.
This includes both future home value growth as well as potential income from listing the home for rent – for those expecting to spend a fraction of the year in their second home.
While many Northerners like to migrate south for the winter to vacation areas like Miami, some are discovering the beauty of Florida beyond the bright lights of the big city. Less than an hour north of Miami, nestled in between Boca Raton and West Palm Beach, lies the tiny burg of Kings Point. Known well to locals, the city is a new hot spot for vacation home rentals.
Zillow says that Kings Point is a second home mecca. Located within five miles of the Atlantic shore, more than 95 percent of homes in the area are second homes, with median home values averaging $39,400. Purchase a home there today for say, $50,000 at an interest rate of 4 percent or so and your mortgage payment would run less than $250 per month.
This is where the money-making comes in: Zillow rent estimates indicate that such a home could be rented out for just under $1,200 a month. It’s easy to see where the math makes sense, say experts. Add in expected growth of nearly 4 percent in the next year and you can understand why prospective vacation home owners see properties in the area as a decent investment.
Deerfield Beach, just 10 miles south of Kings Point, could be an even better rental investment opportunity, according to Zillow. Median home values within an easy walk of the sand are $117,000. Mortgage payments for loans taken out now would average about $600 per month with projected rental income at $1,367 a month.