Insurance Inflation Destroys Single-Family Rental Math in Florida

Written by:

Rudi Davis

Date:

28 Jan 2026

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Florida’s single-family rental market is facing a breakdown in investment viability as insurance, property tax, and HOA fee increases have outpaced rental income growth, according to William Ward, founder of A-Ward Winning Realty. Ward says these rising costs have made it nearly impossible for investors to achieve positive cash flow, forcing many to abandon the single-family rental model.

“In the last two, three years or so, we’re talking about 39 to 50 percent increases in insurance costs,” Ward says. He explains that these increases, combined with higher property taxes and HOA fees, have undermined the basic math that once made single-family rentals attractive. This cost pressure, Ward argues, is a key reason why Tampa Bay now leads the nation in foreclosures.

Ward points to a widespread miscalculation among investors and homeowners, who underestimate how quickly carrying costs can rise. “It could be insurance, it could be taxes, it could be HOAs. Those things constantly go up every year,” he says. The result is a pattern where buyers’ financial projections quickly become outdated, eroding expected returns.

The Turnover Problem

The consequences of rising costs are most visible in rapid property turnover. Homes are cycling through multiple owners in short periods as each new buyer discovers the economics no longer work.

Ward gives a personal example: his cousins bought a home in Margate, near Fort Lauderdale, about five years ago. Since then, the house next door has changed hands two or three times. “We looked at everything that was going on, and we’re like, well, all this stuff has gone up – insurance and taxes and all that,” Ward says.

The problem is even worse for investors who cannot claim homestead exemptions. “These particular buyers, it’s their second or third home, so they’re not allowed to homestead and get discounts,” Ward explains. Without these exemptions, non-primary owners face higher property taxes and insurance premiums, further eroding profitability. Ward says this dynamic explains much of the high turnover and foreclosure activity in the state.

The Underwriting Failure

Ward argues that many investors fail to properly account for the compounding nature of increases in carrying costs and ongoing maintenance expenses. He says buyers often focus on what they can afford at purchase, overlooking the likelihood of rising costs and unexpected repairs.

“You don’t really estimate for these costs,” Ward says. “You get into it not knowing that things can come up – appliances could break, the roof could collapse. You still have to calculate the maintenance of the home and all those different things.”

He notes that this oversight leads to a situation where the numbers don’t add up. “You don’t want to buy a single-family home where the mortgage is $3,000 a month, and you only make $2,500 in rent every month. It doesn’t make sense,” Ward says.

Even when properties appear to generate positive cash flow on paper, Ward says reality often falls short. “It’s really not profitable for them to buy single-family homes anymore. If anything, they’ll buy and have to take a haircut on what they take monthly. And they don’t want to do that,” he says.

The Multifamily Migration

In response to these pressures, Ward reports that more investors are shifting capital away from single-family homes and into multifamily and commercial properties, where the economics are more favorable.

“A lot of investors are staying away from single-family homes and going for duplexes, triplexes, quadplexes, and apartment buildings, or even commercial spaces,” Ward says. He tracks this shift through his network of over 120 wholesalers across Florida.

Ward sees this as a structural change rather than a temporary reaction to current conditions. He notes that just 18 months ago, buying and renting out a single-family home for a profit was still feasible. Now, with higher maintenance, insurance, taxes, and HOA costs, “it’s really not profitable for them to buy single-family homes anymore,” he says.

Implications for Housing Supply

Ward’s observations point to a deeper problem for Florida’s housing market. The single-family rental supply model that grew after 2008 may be breaking down in high-cost insurance markets, threatening both rental availability and affordability.

Some investors are experimenting with short-term rentals like Airbnb to offset costs, but Ward says this strategy carries its own risks if occupancy is inconsistent. “Some people will opt to do Airbnb, but then that’s just as risky if you can’t get a renter in there,” he says.

Whether this capital shift away from single-family rentals becomes permanent may depend on future changes in insurance premiums and property tax policy. Ward notes that Governor Ron DeSantis has proposed eliminating property taxes, which could appear on future ballots. Still, until such reforms take effect, the single-family rental model remains under severe pressure.

Looking Ahead

The rapid escalation of insurance and property tax costs has fundamentally altered the economics of owning single-family rental homes in Florida. For now, investors are responding by moving capital to multifamily and commercial assets, leaving the traditional single-family rental model at risk. Unless carrying costs stabilize or significant policy changes are enacted, Florida’s single-family rental market is likely to remain structurally challenged, with long-term implications for both investors and tenants.