Known as the sunshine state, Florida is famous for its warm climate, beautiful beaches, and cozy living communities. In addition to its growing population, demand for land for sale in Florida has grown significantly behind record-breaking land sales in 2022, an influx of commercial real estate activity, and a thriving multifamily community.
Here, we’ll cover crucial factors you should know about buying land for sale in Florida, including flood zoning, homestead exemptions, adverse possession laws, acreage costs, down payment requirements, and realtor purchase requirements.
Let’s get started.
Essentials to Know When Buying Land in Florida
Florida can be a lucrative spot for land investments, but there are some unique considerations investors need to be aware of.
#1 – Flood Zones, Wetlands, and Floodways
One of the most important things to keep in mind when looking to buy land for sale in Florida is flood zoning.
Thanks to its coastal location and active hurricane season, Florida is one of the most flood-prone states in the country, and flood zones carry risks and development restrictions.
The most relevant designations for landowners are:
- Flood Zones: FEMA-designated flood zones are lands that are at an above-average risk of flooding. Flood risk zones are defined by the percentage likelihood that the land will flood in a given time period. For instance, Zone A areas have a 1% annual chance of flooding. Areas with higher flood risk will have costlier permitting and building processes, so it will be more expensive to buy and develop land in a flood zone. Additionally, insurance costs for land and buildings in flood zones will be higher.
- Wetlands: Similarly, wetlands are defined as land where water is either present or near the surface. Wetlands exist at or below sea level, so most wetlands are also in flood zones. If you buy property in wetlands, water mitigation of some kind will be necessary. Additionally, Florida has several mines underneath wetlands. Construction on wetlands can disturb these mines, so you may have to acquire special permits to develop and build. Also, wetlands property is more expensive to insure due to flood risks. You can check whether a given plot of land falls within designated wetlands using the US Fish & Wildlife Service’s wetlands mapper.
- Floodways: Floodways are areas that are used to mitigate flooding and keep nearby water levels low. For landowners, getting approval to develop and build on land in a designated floodway may be extremely difficult. Structures on floodways will also be very expensive to insure.
Be sure to conduct thorough research and consult with a broker before making any final purchasing decisions; the last thing you’d want to do is lock yourself into a bad deal that requires more upfront permitting and assessment than you initially planned for.
#2 – Homesteading Exemptions
Florida homesteading laws are some of the most generous in the nation and allow property owners to protect real property assets from creditors. These laws allow property owners to exempt the entire value of their property from creditors, meaning that creditors can’t put a lien on land or structures if you have an unfortunate change in economic status.
To be eligible for the Florida homestead exemption, you must have a title claim to the land and use it as your permanent residence. The limit for exemption is one-half an acre in a municipality and 160 acres anywhere else.
#3 – Adverse Possession Laws
Florida also has adverse possession laws, which allow people to take possession of neglected property. Florida Statute 95.18 allows a person to take legal possession of neglected land if they occupy it for at least seven years, have exclusive control of the property, and have made improvements to the land.
This means that a theoretical trespasser could legally take ownership of any land you have neglected. However, the burden of proof of showing adverse possession is on the trespasser and the standards are highly specific, so landowners have good legal protections.
Even still, it’s important to know about these laws and how they could potentially complicate land ownership claims.
How Much Is an Acre of Land Worth In Florida?
According to the USDA 2022 Land Values Summary, the average cost of an acre of rural land for sale in Florida was $6,600, registering a 9.6% increase from 2022. Florida has the highest land values compared to its neighboring states of Alabama, Georgia, Mississippi, and South Carolina.
These averages are for rural farmland, and land prices vary significantly depending on the county. For example, the average cost of an acre of land in Naples is $31,063 per acre—considerably higher than rural land prices.
How Much Do You Need to Put Down on Land in Florida?
If you are buying land for sale in Florida, odds are you’ll end up using a land loan. Land financing requirements are stricter than standard mortgage loans because of the higher risks involved with developing land. As such, land loans often have stricter credit requirements, higher down payments, and higher interest rates.
Most lenders require down payments between 30% and 50%, though some have as low as 10% down payment requirements. If you are buying land to develop for commercial purposes, you can look into SBA 504 loans, which have lower down payment requirements and below-market interest rates.
Do You Need a Realtor to Buy Land in Florida?
No, you do not need a realtor or broker to buy land for sale in Florida. You can buy land entirely on your own without a real estate professional. However, we highly recommend finding a qualified commercial real estate agent to help with the transaction.
Real estate agents and brokers can help negotiate a more favorable transaction and can be on the lookout for complications in the buying process.
Is It a Good Idea to Buy Land for Sale in Florida Now?
Yes, buying land for sale in Florida can be a great investment: Florida has a lot of land for sale and has recently experienced rapid population growth, indicating increasing demand for residential and commercial real estate. The state has one of the most business-friendly economies in the nation, and state laws favor landlords who want to generate rental income.
The main concerns for landowners are high property insurance costs and the extreme weather. Additionally, many experts are worried that environmental changes and increased flooding due to climate change could negatively impact Florida land prices in the future. If you are planning to invest in land in Florida for the long term, you must factor in the risks of flooding and sea level change in your plans