While Everyone Chases Waterfront, Smart Investors Are Buying Workforce Housing in Southwest Florida

Written by:

Alejandra Rodriguez

Date:

05 Jun 2026

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When people think about investing in Florida real estate, they usually picture beachfront condos or luxury vacation rentals. But one veteran agent in Southwest Florida says the real opportunity right now looks far less glamorous and far more reliable.

Rick Stannard, a Realtor with Realty Hub in Southwest Florida, has been buying and selling real estate for over 60 years. He bought his first house at 15. When asked where a smart investor should put money in Southwest Florida today, his answer is immediate: workforce housing.

“Buy a stable of workforce housing houses under $300,000 that you can rent out,” Stannard says, “and just hire a good rental company and take passive income and capital growth.”

Why Workforce Housing, and Why Now

Southwest Florida’s growth depends on workers who can’t afford to live where they work. Retirees are moving in. Businesses are expanding. Wealthy buyers are snapping up waterfront properties. But all of that growth requires teachers, nurses, plumbers, electricians, restaurant workers, first responders, and those workers need somewhere affordable to live.

“There is no way a plumber is going to buy a million-dollar house,” Stannard says. The demand for affordable rentals in the region is structural. It doesn’t disappear when the luxury market softens.

Homes under $300,000 are within reach for investors, and in the current buyer’s market, there’s room to negotiate. Sellers are motivated. Prices have come down. Stannard recently sold a home for $345,000 that had been listed at $389,000 a year earlier. At the lower end of the market, similar gaps exist.

What to Watch Out For: Flood Zones and Condos

Not every affordable property is a good investment. Two categories deserve extra caution.

First, flood zones. Southwest Florida took direct hits from multiple hurricanes in recent years, Ian, Milton, and Elaine, and the insurance market is still recovering. Flood insurance in designated zones can be so expensive that it seriously erodes rental returns. Before buying any investment property, check the flood zone status and get an actual insurance quote. “Flood insurance is very expensive,” Stannard notes, and it’s a cost that won’t go away.

Second, condos. After the Surfside building collapse in Miami, Florida, passed laws requiring condominium associations to fully fund their reserve accounts. Many associations had been underfunding reserves for years, and now owners face large special assessments to catch up. For investors, a condo with a looming special assessment is a liability, not an asset. “Nobody wants to buy in them,” Stannard says.

Single-family homes in non-flood zones are the cleaner play.

The Tax Change Every Investor Needs to Know About

A proposed change to Florida’s tax structure could alter the math on every real estate transaction in the state. Florida is moving toward eliminating most property taxes and replacing them with, among other things, a 5 percent tax on the sale price of residential property. That’s not a tax on profit, it’s a tax on the full sale price.

For investors, this reshapes the exit calculation. A home sold for $280,000 would carry a $14,000 tax at closing under the proposed structure. The break-even point, based on the property taxes saved under the new system, is roughly five years. Investors planning to hold long-term are better positioned; those considering a quick flip need to run the numbers carefully before buying.

The timing matters for another reason. Once the legislature announces an effective date, Stannard expects a wave of sellers to list simultaneously, pushing prices down further. For investors with cash ready to deploy, that moment could represent a buying opportunity.

Who’s Coming to This Market

The underlying demand story for Southwest Florida remains strong. People are still moving here from high-tax states. International buyers are active. The lifestyle draw, water, weather, low taxes, hasn’t faded. Stannard regularly sees buyers from California, the Northeast, and abroad, many of whom pay cash.

As more people arrive, the need for workforce housing grows alongside the luxury market.

Practical Considerations for Investors

Several factors separate a strong workforce housing investment from a costly mistake in this market. Flood zone status determines insurance costs and tenant pool viability, check it before making any offer. Condos with underfunded reserves carry hidden exposure that can wipe out returns. The proposed sales tax favors investors who plan to hold for at least five years. Local property management is essential from day one, as passive income remains passive without professional oversight. And the legislative announcement on property taxes, when it comes, could trigger an inventory spike worth watching.

Looking Ahead

Southwest Florida’s workforce housing market is at a point where prices have softened, demand remains durable, and policy changes are introducing new variables that reward informed buyers. The risks, flood zones, condo assessments, and the coming tax structure, are real but identifiable. Investors who understand these factors and plan for a longer hold are positioned to benefit from both rental income and gradual appreciation in a region where population growth shows no sign of slowing.

About the Expert: Rick Stannard is a Realtor with Realty Hub in Southwest Florida, where he has specialized in residential and investment properties across the region for over six decades.

This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.