Real estate investing in Florida: tax, hurricane risk, and where to actually buy

Florida's investor pitch

Florida shares Texas's two biggest structural advantages — no state income tax and high net migration — plus a third: a year-round tourism economy that makes short-term rentals genuinely viable in a way that few other states match. The trade-off is concentrated in two letters: insurance.

Florida property insurance has 4-6x'd in many coastal counties since 2021 driven by hurricane losses, litigation reform fallout, and reinsurance pricing. If you're underwriting a Florida deal without getting a real bound quote BEFORE close, you are not underwriting the deal you think you are.

State-level tax picture

No state income tax on rental income.
No estate tax.
Sales tax on short-term rentals (under 6 months stays): 6% state + 0.5-1.5% county discretionary surtax + locality-level tourist development tax (typically 4-6%). Total tax burden on Airbnb-type income is often 11-13% — material; budget for it in the Airbnb Calculator.
Property tax: median effective rate ~0.85%, well below the national 1.1%. Save Our Homes amendment caps annual assessment increases at 3% for homesteaded properties — but this cap does NOT apply to investment properties. Non-homestead assessments can grow up to 10%/year. Plan for that escalation in your multi-year projection.
Documentary stamp tax on the deed transfer: $0.70 per $100 of purchase price in most counties ($0.60 in Miami-Dade with surtax). On a $400k purchase that's $2,800.

Insurance is the line item

This deserves its own section because most non-Florida investors underestimate it badly.

A standard SFR rental that would cost $1,200/year to insure in Ohio or Texas often costs $4,000-9,000/year in Florida coastal counties as of 2024-2025. Carriers have been pulling out of the state; the state-sponsored Citizens Insurance has become the carrier of last resort for many properties, and even Citizens has been hiking 12-15% annually.

A few specific things to verify before closing:

4-point inspection age: Most carriers won't bind a property with a roof over 15-20 years old. If the seller's roof is at 18 years, factor a $15-25k roof replacement into your acquisition cash plan.
Wind mitigation credits: Hurricane straps, gable-end bracing, opening protection (impact windows or shutters) can cut wind premiums 20-40%. Pay for a wind mitigation inspection ($75-150) post-close and submit to your carrier.
Flood insurance separately: Standard policies don't cover flood. NFIP or private flood is required if in a special flood hazard area (SFHA). Quote it.
Sinkhole vs catastrophic ground collapse: in pre-2007 properties especially in central Florida, the distinction matters; some policies cover only the latter.

Landlord-tenant law

Security deposit: no statutory cap. Standard practice is one month's rent. Must be returned within 15 days if no deductions, or 30 days with itemized list if deductions.
Notice to vacate (non-payment): 3 days (excluding weekends/holidays).
Eviction: filed in county court. Service typically takes 5-7 days; tenant has 5 days to respond. Uncontested cases resolve in 3-4 weeks; contested can extend 6-10 weeks. Faster than California but slower than Texas.
Rent control: prohibited statewide except in declared housing emergencies. As of 2024, no Florida municipality has active rent control.
Short-term rental regulation: state law preempts local STR bans for properties licensed before 2011, but municipalities can regulate operational standards (parking, noise, occupancy). Check the specific city/county — Orlando, Miami Beach, Anna Maria Island, and many condos have stricter rules.

The metros that work

Tampa / St. Petersburg

The current investor favorite. Strong rental demand from in-migration; relatively affordable on a price-to-rent basis; healthy 5-7% cap rates for stabilized B-class SFR/duplex outside the immediate coast. The 100-year flood plain matters more than people think — check FEMA maps; properties out of the SFHA insure more reasonably.

Jacksonville

Underrated. Larger city than people realize, naval base + port + healthcare drive consistent demand. Some of the best cashflow ratios in any major Florida metro — 1%-rule deals still findable in Jacksonville Heights and Mandarin sub-markets. Northeast Florida hurricane risk is lower than the peninsula; insurance is meaningfully cheaper.

Orlando

The STR capital. Disney + Universal drive 70M+ tourist visits/year. Vacation-rental neighborhoods (Davenport, Champions Gate, Reunion) have purpose-built short-term-rental zoning. Run the math carefully in the Airbnb Calculator — STR occupancy and ADR estimates are easy to over-fit to peak season; the off-season (Sep-Nov, Jan-Feb excluding holiday weeks) drags annual occupancy to 55-70% in most projections.

Miami / South Florida

Highest absolute prices, highest insurance burden, most volatile market. Foreign cash buyers compress yields. Long-term rentals are tough to make pencil; STR + flip strategies dominate. If you're considering Miami, the BRRRR Calculator is essential — refi math at current rates makes the recycle-capital story much harder than it was in 2017-2021.

The hurricane question

Don't pretend a Category 3+ won't happen. Underwrite EVERY Florida property with:

Insurance deductible reserve (typically 2-5% of insured value = $5-25k that you fund out-of-pocket before insurance kicks in)
Realistic 30-day lost-rent allowance in your stress test (the Rental Calculator has a stress-test panel — set vacancy higher than your usual baseline for at-risk markets)
A roof age that won't trigger a 20-year-replacement nightmare during your hold period

1031 exchange angle

Florida-to-Florida exchanges work like any other 1031 — no state-tax angle to optimize because Florida has none. The interesting move is rolling FROM a high-tax state (California, New Jersey, New York) INTO Florida property: you eliminate the recurring state income tax on rental income going forward, on top of the federal capital gains deferral. Run the comparison in the 1031 Exchange Calculator.

The investor's bottom line

Florida rewards investors who underwrite insurance and hurricane risk honestly and punishes those who don't. The tax setup is genuinely advantaged. The metro selection matters more than ever — Tampa and Jacksonville reward long-term holds; Orlando rewards STR specialists; Miami is its own animal. Quote insurance, check FEMA flood maps, and read the HOA reserves before you sign anything.