Rental Property in Florida: What the Numbers Actually Look Like

Florida has a 0.78% effective property tax rate. That is genuinely low — below the national middle, and well below Texas or Ohio. It is also almost irrelevant to whether a Florida rental works, because the insurance bill is 2.6 times larger than the tax bill.

The average Florida homeowners premium is $8,471 a year at $300,000 of dwelling coverage. That is not a coastal figure or a worst-case figure; it is the statewide average. On the property worked through below it consumes 27.2% of gross rent by itself, and swapping it for a Georgia-level premium would improve the cap rate by 1.42 percentage points without changing anything else about the house.

If you take one thing from this article: in Florida, price the insurance before you price anything else. Not after the inspection, not during the loan process. Before you make the offer.

A note before you start: this is general educational information about how rental property arithmetic works in Florida. It is not investment, tax, insurance, or legal advice, and it is not a recommendation about any property. Florida insurance is priced per structure — construction type, roof age, elevation, distance to coast, and wind mitigation features move it enormously — and property tax is administered county by county. Talk to a Florida CPA about tax treatment, a licensed Florida insurance agent about a real quote, and a Florida real estate attorney about anything contractual.

1. What a rental costs to buy here

The statewide median sale price for existing single-family homes is $425,000 (Florida Realtors Research Department, July 2026, up 3.7% year over year). The condo and townhouse median is separately about $295,000 — a very different number, and one that comes with association dues and assessment exposure that this article's single-family arithmetic does not model.

County medians diverge sharply:

• Orange County (Orlando): $410,494, effective property tax rate 0.75%, average insurance $4,145
• Miami-Dade County: $685,000, effective property tax rate 0.76%, average insurance $10,478

The cash you actually need

Florida charges on both the deed and the note, and the two land on different parties by custom:

• Deed documentary stamp tax: 0.7% ($0.70 per $100 of consideration) statewide, customarily paid by the seller. Miami-Dade is the exception: $0.60 per $100 base plus a $0.45 discretionary surtax, but the surtax does not apply to single-family residential transfers, so most Miami-Dade home sales effectively pay $0.60 per $100.
• Documentary stamp tax on the note: 0.35% ($0.35 per $100), capped at $2,450 per note, customarily paid by the buyer.
• Nonrecurring intangible tax on the mortgage: 0.2% (2 mills per Florida Statute 199.133) of the amount financed, also customarily on the buyer.

So the buyer's own transaction tax is roughly 0.55% of the loan amount, which is a line item most out-of-state investors do not know exists.

• Closing costs: 2% to 5%. ClosingCorp/Bankrate data puts Florida around 2.3% (about $8,554) on a narrow definition; the broader commonly cited buyer range is 2% to 5%. This article uses a 3.5% midpoint.

On the $425,000 statewide median at 25% down:

• Down payment: $425,000 x 0.25 = $106,250
• Loan amount: $318,750
• Closing costs: $425,000 x 3.5% = $14,875
• Note doc stamps: $318,750 x 0.35% = $1,115.63 (under the $2,450 cap)
• Intangible tax: $318,750 x 0.2% = $637.50
• Total cash in: $122,878.13

Some closing-cost estimates already fold the note taxes in; they are broken out here so you can see them rather than to be double-counted.

On price growth: FHFA's most recent published state-level figure has Florida at -0.5% year over year. An analysis that needs appreciation to rescue the cash flow is currently betting against the last published print.

2. The two expenses that decide whether it works

Property tax: the good news, and it is real

The Tax Foundation puts Florida's effective property tax rate on owner-occupied housing at 0.78%, down from 0.80% in 2023 data. SmartAsset reads 0.75%, propertytaxrates.org 0.79% — sources cluster tightly at 0.75% to 0.79%.

On the $425,000 example: $425,000 x 0.78% = $3,315 a year, or $276.25 a month.

There is a Florida-specific catch for landlords, and it is the mirror image of the good news. Florida's homestead exemption and its Save Our Homes 3% assessment cap both require the owner to occupy the property as a permanent residence. A rental gets neither. Non-homestead property is subject to a 10% annual assessment increase cap rather than 3%, and it carries no exemption at all.

That has two consequences. First, if you are converting your own home into a rental, the tax bill steps up when the exemption comes off. Second — and this is the one that catches out-of-state buyers — the tax bill shown on the listing may belong to a long-time homesteaded owner whose assessed value has been held down for years. On sale, the assessment resets to market value. Never underwrite a Florida rental from the seller's current tax bill. Compute it from the purchase price.

Insurance: the number that decides everything

The reference figure is $8,471 a year at $300,000 of dwelling coverage with a $2,500 typical all-perils deductible. Note that Florida's typical flat deductible is already 2.5 times the $1,000 that is standard in most states — before the separate hurricane deductible below.

That $8,471 is 27.2% of the $31,200 of gross rent in Section 3's example, and $705.92 a month. It is 2.6 times the property tax bill.

Here is the cleanest way to see what it does. Take the identical $425,000 house at the identical rent and the identical 0.78% tax rate, and change only the insurance premium:

Insurance alone is worth 1.89 percentage points of cap rate across that range, and $668.75 a month of cash flow. Nothing else in a Florida analysis has that much leverage. Not the rate you negotiate, not the management fee, not the price you talk the seller down by.

The trend has finally turned. Insurify projects +2% for 2026, and Citizens Property Insurance — the state-backed insurer of last resort — has shrunk from a peak of roughly 1.42 million policies in October 2023 to about 394,000 as private carriers re-entered. Regulators approved a statewide average Citizens rate cut of roughly 8.7% to 8.8% on multiperil policies (5.5% wind-only) effective July 1, 2026, reaching about 14% in Miami-Dade and Broward. That is real improvement. It does not change the level: $8,471 is still $8,471.

A note on Citizens eligibility, because investors get this wrong: you cannot buy from Citizens if private coverage is available within 20% of the Citizens premium. It is a backstop, not a cheap option you can plan around.

Finally, a rental is not insured on a homeowners form. You need a landlord policy — a dwelling fire form with loss-of-rents coverage — priced for the specific address. The figures above are the right anchor for the level of cost in this state; they are not your quote.

The hurricane deductible, and why it is a landlord's problem specifically

Florida Statute 627.701 requires every homeowners insurer to offer hurricane deductible options of $500, 2%, 5%, or 10% of the dwelling limit. The homeowner picks one, and 2% is the most common selection.

This is a separate deductible from the policy's all-perils deductible, and it is a percentage of the dwelling limit, not of the damage. On a $300,000 dwelling limit:

• 2% = $6,000
• 5% = $15,000
• 10% = $30,000

Florida construction runs about $210 per square foot to rebuild, so a 1,500 square foot house has a replacement cost near $315,000, on which those percentages become $6,300, $15,750, and $31,500.

It applies once per calendar year, triggered when the National Hurricane Center issues a hurricane watch or warning for any part of Florida. Two storms in one calendar year means one deductible; two storms in two calendar years means two.

Now put those numbers against the property. Section 3 works out that this rental produces $10,927.60 of net operating income in a good year:

• A 2% deductible ($6,000) is 54.9% of a full year's NOI
• A 5% deductible ($15,000) is 137% of a full year's NOI
• A 10% deductible ($30,000) is 275% of a full year's NOI

You cannot pass any of it to a tenant. It is not a lease obligation, it is not billable, and it does not wait for rent to accumulate. Meanwhile the property is likely uninhabitable, so rent stops at the same moment the deductible comes due — which is exactly what loss-of-rents coverage exists for, and exactly why you should confirm you have it and how many months it pays.

Two more Florida mechanics worth knowing:

Roof settlement. Carriers commonly restrict roofs roughly 15 years and older to actual cash value (depreciated) settlement, and many decline to write or renew at 15 to 20 years regardless of condition. The gap is large: on a 15-year-old shingle roof with $20,000 of damage, replacement cost pays near $20,000 while ACV may pay only $6,000 to $10,000. Under Fla. Stat. 627.7011, a replacement-cost policy generally pays actual cash value first and releases the withheld recoverable depreciation as repairs are completed and documented — so even on a good policy you finance the repair before you are made whole. In 2026 Fannie Mae and Freddie Mac also relaxed lending standards to accept ACV roof coverage rather than requiring replacement cost in all cases, removing a constraint that had protected borrowers by default.

Flood is separate, always. No property policy anywhere in the United States covers flood. In Florida this is not a technicality — wind damage is a hurricane claim, storm surge and rising water are a flood claim, one storm routinely does both, and holding only one policy leaves half the loss uncovered. Being outside a mapped high-risk zone is a statement about a flood map, not about whether water can reach the house.

3. A full worked example

The property. A single-family house at the Florida statewide median of $425,000.

The rent — read this carefully. This site does not carry rent data. The $2,600 a month used below is an assumption chosen to be plausible for a house at that price. It is not a market observation. Pull three to five real comparable listings for the specific neighborhood and substitute the actual number, because Section 4 shows how sensitive the answer is to it.

The other assumptions:

• Vacancy: 8% of gross rent (roughly one month of turnover a year)
• Property management: 10% of collected rent
• Repairs and maintenance: 5% of gross scheduled rent
• Capital reserve: 5% of gross scheduled rent
• Financing: 25% down, 30-year fixed at 7.00% — the rate is an assumption, not a quote
• No HOA and no condo association. If you are buying a condo, add dues and reserve-assessment exposure, both of which have moved sharply in Florida since the 2022 structural-integrity legislation

Step 1 — income

• Gross scheduled rent: $2,600 x 12 = $31,200
• Vacancy loss: $31,200 x 8% = $2,496
• Effective gross income: $31,200 - $2,496 = $28,704

Step 2 — operating expenses

Management is charged on rent actually collected, not scheduled rent:

• Management: $28,704 x 10% = $2,870.40
• Property tax: $425,000 x 0.78% = $3,315
• Insurance: $8,471
• Maintenance: $31,200 x 5% = $1,560
• Capital reserve: $31,200 x 5% = $1,560
• Total operating expenses: $17,776.40

Expense ratio: $17,776.40 / $28,704 = 61.93% of collected rent — above the 35% to 55% band most rentals land in. Insurance is 47.7% of that entire expense line.

Step 3 — net operating income and cap rate

• NOI = $28,704 - $17,776.40 = $10,927.60
• Cap rate = $10,927.60 / $425,000 = 2.57%

The mortgage is deliberately absent from that figure. Cap rate exists to compare properties independently of how they are financed; putting debt service into it is the most common error in this whole exercise, and it makes two identical houses look like different investments because one buyer put more down.

Step 4 — debt service and cash flow

Loan: $425,000 x 75% = $318,750. At 7.00% over 30 years, principal and interest is $2,120.65 a month, or $25,447.80 a year.

• Annual cash flow = $10,927.60 - $25,447.80 = -$14,520.20
• Monthly cash flow = -$1,210.02
• Debt service coverage ratio = $10,927.60 / $25,447.80 = 0.43

Step 5 — cash-on-cash return

• Cash invested: $122,878.13 (Section 1)
• Cash-on-cash = -$14,520.20 / $122,878.13 = -11.82%

Rate sensitivity, since 7.00% was an assumption

• At 6.50%: P&I $2,014.72/mo, annual cash flow -$13,249.04
• At 7.00%: P&I $2,120.65/mo, annual cash flow -$14,520.20
• At 7.50%: P&I $2,228.75/mo, annual cash flow -$15,817.40

A full point of rate is worth about $2,568 a year. Insurance is worth more.

The simplest version of the same finding

Add up the four bills a lender escrows:

• Principal and interest: $2,120.65
• Property tax: $3,315 / 12 = $276.25
• Insurance: $8,471 / 12 = $705.92
• Total: $3,102.82 a month

Against $2,600 of assumed rent, that is -$502.82 a month before vacancy, management, or a single repair. In Florida the naive "does the rent cover the mortgage" check already fails, and the reason it fails is that $705.92 insurance line.

4. The expenses people leave out

Vacancy, management, and capital reserves do not arrive as invoices. Nobody bills you for the month the house sits empty, or for the roof you will need in nine years, or — if you self-manage — for your own weekends. So they fall out of the mental model, and the property looks better than it is.

Here is the same house with those three removed and everything else identical:

The three omissions are worth $6,926.40 a year — $2,496 of vacancy, $2,870.40 of management, $1,560 of reserve. They flatter the cap rate by 1.63 percentage points and hide 48% of the annual loss.

Vacancy. Eight percent is roughly one month a year, which is what a single clean turnover costs between move-out and the next tenant's first full month. Setting it to zero assumes the house is never empty, including between tenants.

Management. Set it to zero and the return is paying you for your own labor rather than for the property. Self-managing this house saves $2,870.40 a year, lifting NOI to $13,798 and the cap rate to 3.25%, with cash flow improving to -$970.82 a month. It is a real saving. It does not fix the deal, and it stops being free the moment you stop being available.

Capital reserves. Roofs, HVAC, water heaters, and flooring have known lives, and in Florida the roof clock is shorter than the shingle warranty suggests — Section 2 explains that carriers start depreciating or declining roofs around 15 years, which means the insurance market will effectively force a replacement before the roof physically fails. The 5%-of-rent convention used above is one option. A harsher and equally common convention is 1% of purchase price a year for maintenance and 1% for capital, which here is $4,250 each. Run that way: total operating expenses $23,156.40, expense ratio 80.67%, NOI $5,547.60, cap rate 1.31%, cash flow -$1,658.35 a month.

So the honest cap-rate range for this property is 1.31% to 2.57% depending on which reserve convention you choose. Choose one deliberately.

What would actually have to be true

The rent this property needs. For cash flow to reach zero at this price and this financing, gross scheduled rent must reach about $51,145 a year, or $4,262.11 a month — 1.00% of purchase price per month, almost exactly. That is where the old "1% rule" comes from: at 2026 financing costs it is roughly the point at which a leveraged single-family rental stops bleeding. The assumed $2,600 rent is 0.61% of price.

The price this rent supports. Hold rent at $2,600 and solve for the price at which cash flow reaches zero with 25% down: about $210,449, roughly half the statewide median. That is not the median Florida house.

The down payment this price needs. Keep the $425,000 price and the $2,600 rent and solve for the loan the NOI can service: about $136,875 — which means roughly $288,125 down, or 68% of the price. At that point you have bought a 2.57% cap rate mostly with cash.

The insurance line is what makes all three of those numbers so demanding. Cut the premium to Georgia's $2,453 and the breakeven rent falls by roughly $500 a month.

5. What actually varies by county here

Florida property tax rates are remarkably flat across counties by state standards — Orange at 0.75%, Miami-Dade at 0.76%, against a statewide 0.78%. Millage varies by taxing district and by whether the property sits inside a municipality, but the county-level spread is small.

Insurance is the opposite. Orange County averages $4,145; Miami-Dade averages $10,478. That is a 2.5x spread inside one state, and it is entirely the story.

Take the identical $425,000 house at $2,600 rent and apply each county's actual tax rate and average premium:

A $6,375.50 a year swing in NOI between Orange and Miami-Dade on the same house at the same rent, and 1.50 percentage points of cap rate. Property tax contributes $42.50 of that. Insurance contributes the rest.

Now run each county at its own real median price, which is where the second Florida trap lives:

• Orange County at $410,494 with $2,600 rent, 0.75% tax and $4,145 insurance: NOI $15,489.89, cap rate 3.77%, cash flow -$757.45 a month.
• Miami-Dade at $685,000 with a $3,800 assumed rent, 0.76% tax and $10,478 insurance: NOI $17,512.80, cap rate 2.56%, cash flow -$1,958.59 a month.

Miami-Dade's higher rent does not rescue it, because the loan is 67% larger and the insurance is 2.5 times higher.

Two further county-level facts to check for a specific address, neither of which is in a county average:

Wind-borne debris regions and high-velocity hurricane zones. Miami-Dade and Broward sit in the High Velocity Hurricane Zone with their own building-code chapter. Impact-rated openings and code compliance change both the premium and the rebuild cost.

Flood zone. This is parcel-level, not county-level, and it is the single largest unmodeled cost in a Florida analysis. Get the flood quote before the inspection period ends.

6. Financing a rental is not financing a home

These are the standard mechanisms across the mortgage market. Any specific rate or overlay is your lender's, not this article's.

Down payment. Conventional financing on a non-owner-occupied one-unit property generally requires more equity than an owner-occupied purchase — 20% is usually the floor and 25% the common expectation, which is why this article models 25%. FHA and VA are not available for a property you do not occupy. The genuine exception is house hacking: a two-to-four-unit property you live in one unit of qualifies for owner-occupied programs.

Rate. Investment-property loans price above owner-occupied loans. Fannie Mae and Freddie Mac apply loan-level price adjustments for investment occupancy that scale with loan-to-value and credit score; lenders pass those through as rate or points. The 7.00% modeled above is an assumption. Get a real quote.

Reserves. Lenders typically require post-closing reserves — months of principal, interest, taxes, and insurance held in liquid assets — scaling with the number of financed properties you own. In Florida you want those reserves regardless of the lender's requirement, because Section 2's hurricane deductible is a five-figure cash event that arrives at the same moment rent stops.

Rental income counting. Lenders credit a portion of market or lease rent toward qualifying, not all of it. Ask what percentage yours uses and whether they need an appraiser's rent schedule.

DSCR loans. A debt service coverage ratio loan qualifies the property rather than the borrower, comparing property income to debt service and largely skipping personal income documentation. The trade is a higher rate, a larger down payment, frequent prepayment penalties, and a minimum DSCR — commonly stated at or above 1.0 and often above 1.2.

Look at Section 3. This property's DSCR is 0.43, and even with vacancy, management, and reserves stripped out it is 0.70. It does not qualify at 75% loan-to-value. The DSCR underwriting is telling you the same thing the cash flow line is.

Insurance is a closing condition, and in Florida it can be a deal-killer. A four-point inspection (roof, electrical, plumbing, HVAC) and a wind mitigation inspection are routinely required to bind coverage, and a roof past 15 years can make a house uninsurable at any price a deal survives. Get a bindable landlord quote for the specific address during your inspection period. Not after.

7. What to check before you buy in this state

Insurance, first, before anything else.

1. Get a bindable landlord policy quote for the specific address — not a homeowners quote, not a statewide average, not a rate from a comparison site.
2. Read the hurricane deductible off the quote and multiply it into dollars against the dwelling limit. Write that number down. It is your minimum cash reserve.
3. Confirm the policy carries loss of rents coverage and find out how many months it pays. Rent stops when the house is uninhabitable.
4. Get the roof age in writing and ask specifically whether the roof settles at replacement cost or actual cash value. Fifteen years is the threshold that matters.
5. Order the wind mitigation inspection. Hurricane straps, a hip roof, impact-rated openings, and secondary water resistance carry real credits, and Florida carriers do not always apply them automatically.
6. Get a flood quote separately, whatever the flood map says.
7. Check whether Citizens would even be an option. You cannot use it if private coverage is available within 20% of the Citizens premium.

Property tax, from the purchase price rather than the listing.

1. Recompute the tax at market value with no homestead exemption and no Save Our Homes cap. The seller's bill may reflect decades of capped assessment that resets on sale.
2. Check for CDD (community development district) assessments, which are common in newer Florida subdivisions, appear on the tax bill, and are not in any effective-rate average.

The rent, from the market.

1. Pull three to five genuine comparable rentals for the specific neighborhood and note how long they sat.
2. Divide monthly rent by purchase price. Section 4's breakeven for this example was 1.00%. Knowing where you sit against that tells you immediately whether you are buying cash flow or betting on appreciation — and Florida's last published appreciation figure was -0.5%.

The law, from the statute rather than from an article.

1. Do not take eviction timelines, notice periods, security-deposit handling, or late-fee rules from a blog — including this one. Florida residential tenancies are governed by Chapter 83, Part II of the Florida Statutes (the Residential Landlord and Tenant Act). Read it at the Legislature's own site, http://www.leg.state.fl.us/statutes/, or have a Florida real estate attorney walk you through it. Security-deposit handling in particular carries specific notice and account requirements that are easy to get wrong and expensive to get wrong.
2. Check the city and county separately: rental registration, inspection requirements, and short-term rental restrictions are local and vary enormously across Florida.

If it is a condo.

1. Read the association's reserve study, its most recent structural integrity reserve study, and the minutes for the last two years. Florida condo assessments have moved sharply since the 2022 legislation, and a special assessment is not something a rental analysis absorbs quietly.

The money and the tax treatment.

1. Size your cash reserves against the hurricane deductible in dollars, not against a month of mortgage payments.
2. Ask a Florida CPA how the property will be taxed, including depreciation, passive activity loss rules, and treatment on sale. Florida has no state income tax, which changes that conversation but does not remove it — the federal treatment is where most of the answer lives.

What to do next

Every figure above came from a data file or was computed in front of you. Re-run all of it with your own numbers.

The Florida rental analysis calculator does exactly the work in Sections 3 and 4 — enter your price, your real local rent, and your own vacancy, management, and reserve assumptions, and it produces NOI, cap rate, cash flow, cash-on-cash, and DSCR. It also warns you when you have left out the expenses Section 4 is about, rather than letting them pass silently.

Because insurance is the number that decides a Florida deal, start with the Florida insurance premium estimator — it will get you closer to a real figure for a specific dwelling limit than the $8,471 statewide average, and it converts the 2%, 5%, and 10% hurricane deductibles into actual dollars rather than leaving them as percentages.

The Florida mortgage payment calculator gives you the principal and interest figure for the rate you are actually quoted, which Section 3 shows is worth about $2,568 a year per point.

This article is general educational information about rental property arithmetic in Florida, based on figures current as of August 2026. It is not investment, tax, insurance, or legal advice. The rent figures in the worked examples are stated assumptions, not market data. Insurance premiums, property tax assessments, and mortgage rates change and vary by property. Consult a Florida CPA, a licensed Florida insurance agent, and a Florida real estate attorney before buying.