Everyone has heard the stories of the significant rise in inventory of homes for sale in Florida. Some areas are worse than others. Cape Coral is probably at the top of the list. Here in Broward County, we have approximately 18,000 active listings as of mid-summer 2025. Active listings for sale has plateaued recently as we are in the most active selling months of the year. However, a trend I have noticed is that rental listings are still rising rapidly.
Home sellers who have not been able to sell their property at the price they expect are deciding to become landlords and rent out their space. Many are running For Sale and For Rent listings simultaneously. This is leading to a decline in rental values that I expect to continue. South Florida saw a huge influx of renters during the pandemic which pushed rents higher as well as home values. Things have changed. Many people decided it is too expensive to live here and many have been called back to the office. Work-from-home policies have changed for many. We have also seen a big increase in new apartment buildings come online in South Florida. Some are offering one or even two months of free rent to attract new residents.
AirBnb became hugely popular over the past five years. But, South Florida is saturated now and AirBnb owners are struggling to be profitable renting on a short-term basis and are turning to mid-term and long-term rentals.
Before you decide to just rent it out ask yourself if you really want to be a landlord. I have been a landlord and have managed many properties. It is not passive income. There are also plenty of risks that go along with renting such as vacancies, tenant defaults, large capital expenses and of course liability. Landlords get sued a lot. Rising taxes and insurance are squeezing cash flows right now. I am seeing instances where rents are barely covering those two items for some landlords. If you are renting a condo and get hit with an assessment you can't afford, then what do you plan to do?
When done right, landlording can be a path to wealth. But if not taken seriously, it can lead to frustration or worse. It should not be a Plan B. That is what we call being an Accidental Landlord. Before renting your property out, take a close look at what the return on your investment will be and compare that to other investments. There are risk-free investments such as treasury bills that will return about 5% today. That is your baseline. Why accept less for an investment that is more work and higher risk?
Real estate trends don't turn on a dime. They move slowly, and I expect rental inventories to continue to rise and rents to continue to soften for the next year or more. If you are going to be a landlord, be in it for the long haul. That is a good strategy. Just renting it out until market conditions for selling get better will not likely be a successful venture.
So, what to do? Maybe, accept something less on the sale of your home. If you have owned it for more than five years, you have done very well. Or, use seller financing to get a better price on your property. In my opinion being a lender is a lot less risky and less work than being a landlord.
Subscribe to my newsletter here.
Serving The Greater Fort Lauderdale area since 2006
You can reach me 954-895-2431
If You Like This Post, Please Share. Thanks!