Southwest Florida real estate investing has seen more plot twists since 2020 than a Netflix mini series: pandemic-fueled buying frenzies, hurricane disruption, an insurance-cost shock, a rush of investors, and now a noticeable “everyone take a breath” reset. What’s emerged is a market that’s no longer running on pure adrenaline, but on fundamentals: population growth, migration, risk pricing, and much stricter math on what really makes a deal work.
The Big Picture: Why Southwest Florida Got So Hot
When we talk about Southwest Florida (SWFL) in an investment context, we’re really talking about three core counties:
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Lee County – Cape Coral, Fort Myers, Estero, Fort Myers Beach
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Collier County – Naples, Marco Island and nearby enclaves
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Charlotte County – Punta Gorda and surrounding areas
These markets share several structural traits that matter a lot to investors.
First, population growth has been relentless. Lee County, for example, grew from roughly 620,000 residents in 2010 to more than 820,000 by 2022—over 30% growth in just over a decade. That’s not a slow burn; that’s a blow torch. Collier and Charlotte have also grown steadily, especially with retirees, remote workers, and lifestyle movers who decided that winters with actual winters are optional.
Second, migration, not births, is driving Florida’s growth story. Since 2020, essentially all of Florida’s population gain has come from people moving in, and the majority of those movers are from other U.S. states. Inbound residents are bringing equity and incomes from higher-cost markets which helps explain why home values in places like Naples and Cape Coral could jump so dramatically, so quickly.
Third, the broader Sun Belt narrative pulled in a lot of capital. For several years, investors have treated the Sun Belt like a default “yes” for capital allocation, especially in multifamily and single-family rentals. Fort Myers and Cape Coral benefitted from this thesis as emerging “Zoomtowns” with sunshine, job growth, and relatively affordable prices (at least at the start of the story).
Layer on top:
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No state income tax
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Lifestyle draws (beaches, golf, boating, endless “just one more week” vacations)
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Historically lower costs relative to coastal California or the Northeast
…and Southwest Florida was perfectly set up to become one of the defining boom markets of the 2020s.
Then the pandemic arrived and stepped on the accelerator.
2020–2022: The Pandemic Gold Rush
Price Growth That Broke the Y-Axis
If you’re an investor who bought in 2018–2019, the next few years must have felt like watching your portfolio strapped to a SpaceX rocket.
Cape Coral is one of the clearest poster children of the boom. Average sale prices there roughly:
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Started around $240,000 in mid-2020
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Climbed into the mid–$400,000s by mid-2022
That’s on the order of 75–80% appreciation in about two years.
On a broader index basis, federal house price data for the Cape Coral–Fort Myers metro shows something similar: prices rising roughly 50–60% between early 2020 and mid-2025, even after a later correction. In other words, prices didn’t just increase—they reset to a new level.
Naples tells a similar but higher-dollar story. Median closed prices there went from the low to mid–$300,000s pre-pandemic to the mid–$500,000s and beyond by 2025. Compared to late 2019, that’s on the order of 70–75% higher prices in only a few years. For properties in prime locations or luxury segments, the jumps were even more dramatic.
To put it bluntly: if you underwrote deals in 2016 assuming “Florida is solid, 3–5% a year,” what actually happened from 2020–2022 looked more like “Florida on five energy drinks.”
Who Was Doing All This Buying?
The buyer mix in 2020–2022 was a cocktail with a high-octane investor garnish.
You had remote workers leaving high-cost coastal metros—New York, Boston, Chicago, California—who suddenly realized their job lived in the cloud and their winter did not have to live at all. They wanted space, sun, and a home office that didn’t also function as a laundry room.
You had retirees and pre-retirees who moved up their timelines. If you’re going to retire to Florida “someday,” and a global pandemic reminds you that tomorrow is not guaranteed, “someday” has a way of turning into “now.”
You also had a wave of investors:
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Short-term rental buyers who saw South Florida and Gulf Coast markets as prime Airbnb and VRBO territory.
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Small to mid-sized portfolio investors using DSCR loans, private money, and local lenders to assemble rental portfolios.
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Flippers who recognized that low inventory and surging demand made cosmetic rehabs extremely forgiving—at least temporarily.
In many neighborhoods in Cape Coral, Fort Myers, and Naples, it started to feel like every third person at an open house was a remote tech worker, every third was an older household “done with seasons,” and the rest were investors and agents.
The Shock: Hurricane Ian, Insurance Reality, and the Cost of Paradise
Then in late September 2022, Hurricane Ian made landfall.
It became one of the costliest hurricanes in U.S. history, with damage estimates exceeding $100 billion and a particularly brutal impact on Lee County, Fort Myers Beach, and surrounding areas. Streets, marinas, waterfront homes, and entire neighborhoods were reshaped—some temporarily, some permanently.
What Happened to Property Values?
From a distance, you might expect an immediate, deep price collapse. Interestingly, the data doesn’t show a clean, catastrophic drop in overall home values in Lee County.
In the months after Ian:
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A lot of damaged properties came off the market or were pulled back while repairs and insurance claims were sorted out.
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Transactions skewed toward relatively intact or newly rebuilt homes, which often sold at higher prices.
As a result, aggregate price indices and median prices did not crater the way you might intuitively expect. In some data, you can even see a brief “premium” as buyers competed for limited, livable inventory.
However, that’s only the surface. The real impact of Ian has been second-order:
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More stringent rebuilding requirements in damaged zones
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Updated flood maps and elevation requirements
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Lenders and insurers taking a much harder look at risk
Ian didn’t instantly crash the market. It quietly and powerfully changed the math behind owning or investing in Southwest Florida real estate.
The Insurance Sledgehammer
To understand Southwest Florida in 2023–2025, you have to understand insurance.
Across Florida, the average homeowners insurance premium has climbed into the mid–$5,000s per year, far above the U.S. average. In many parts of Southwest Florida, especially post-Ian, owners are seeing combined home and flood premiums north of $8,000–$10,000 per year, sometimes more.
In specific Cape Coral and Lee County case studies, it’s not uncommon to see:
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Pre-Ian premiums in the $2,500–$3,000 range
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Post-Ian renewals in the $5,000–$8,000+ range
For investors who underwrote $200–$250 a month for insurance and suddenly face $600–$800 a month, the cash flow picture changes dramatically.
And this isn’t just about individual deals. Rising insurance costs in SWFL have:
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Put downward pressure on prices, particularly for older or more exposed homes.
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Created affordability issues for local residents, especially renters if landlords pass through costs.
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Become a political and economic issue for local governments worried about tax bases and long-term growth.
If you want to be a prudent investor in SWFL today, you don’t treat insurance as a “line item.” You treat it as a macro force.
2023–2025: The Great Rebalancing
Cape Coral and Fort Myers: From Star to “Story Problem”
Cape Coral was one of the biggest winners of the pandemic boom, and has been one of the clearest examples of the post-boom comedown.
From mid-2020 to mid-2022, prices surged roughly 75%. Since the peak, values in parts of Cape Coral and the broader Cape Coral–Fort Myers metro have retreated on the order of 10–15% from their highs. In some local datasets, median prices dropped from roughly the low–$440,000s at peak into the mid–$300,000s, a meaningful step down but still well above pre-pandemic levels.
Inventory tells an equally important story. Active listings in Cape Coral that once hovered under 1,000 at the height of the frenzy have ballooned to several thousand. Months of supply climbed from the 1–2 month “absolute seller’s market” range into 7–8 months or more, depending on the submarket and price tier.
Other notable patterns in the Cape Coral / Fort Myers area:
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A large majority of homes—often 70% or more—are closing below asking price.
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Days on market have stretched into the 75–80+ day range for many listings.
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A nontrivial share of homeowners (around 8% in some analyses) are now underwater, particularly those who bought at or near the 2021–2022 peak with minimal equity.
Zooming out, some metro-level estimates show Lee County home values down double digits from their 2022 peaks, and price indices suggest declines of around 13–14% from the very top in Cape Coral–Fort Myers, and even larger drops in nearby Punta Gorda.
This is not 2008—with system-wide mortgage failure and forced liquidations—but it is a meaningful correction. For investors who assumed the boom would never slow down, it has been a sobering one.
Naples: The Rich Cousin with a Cushion
Naples, on the other hand, has behaved more like a blue-chip stock than a meme stock.
As of 2025, data from the Naples area shows:
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Median sale prices hovering around the high–$600,000s at some points in early 2025.
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Year-over-year price growth still in positive territory, in the high single digits.
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Closed sales increasing, not decreasing, compared to the prior year.
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A striking share of cash buyers (around 60% of closings paid in cash).
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Active inventory rising significantly, with months of supply pushing above 10 months, pointing to more negotiating power for buyers.
Even with the additional inventory and more balanced (or even buyer-leaning) conditions, median prices in Naples sat roughly 70–75% above pre-pandemic levels by late 2025.
Naples has essentially said: “Yes, you may negotiate. No, you may not lowball.”
For investors, this means Naples remains an expensive, relatively stable, and heavily cash-driven market. You’re not generally investing here for quick appreciation from a low base. You’re investing in long-term demand, lifestyle premium, and scarcity.
The Rental Story: From Gold Rush to Reality Check
Sales are only half of the SWFL picture. The other half is rental performance.
During the 2020–2022 boom, rents followed prices upward. Florida as a whole, and Gulf Coast markets in particular, saw:
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Double-digit rental increases over a short period
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Intense competition for single-family rentals
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Strong demand for short-term rentals in beach and tourism-adjacent areas
In the immediate post-pandemic run-up, many investors underwrote:
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Short-term rentals with very optimistic occupancy and ADR assumptions
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Long-term rentals assuming continued rent growth at above-trend levels
But as more supply has come online and affordability has been stretched, rent growth has slowed or flattened. In some pockets, rents have even edged down slightly, especially where competition from new units and increased listings is strongest.
At the same time, landlords are facing sharply higher costs, especially for insurance. That creates pressure to raise rents further, but there’s only so far you can push rents before local incomes and tenant quality become limiting factors.
Property managers and local reporting across SWFL highlight tension points like:
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Households whose rents have doubled since early 2020, especially post-Ian.
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Renters and homeowners alike considering leaving Florida altogether as housing and insurance costs mount.
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Vacancy drifting upward in some product types, especially undifferentiated rentals competing solely on price.
For investors, the lesson is straightforward: top-line rent does not equal performance. With insurance and taxes taking a larger bite, you have to underwrite to net operating income with realistic assumptions on vacancy and expenses, not a back-of-the-envelope “$X/month times 12” calculation.
Who’s Actually Winning in This Market?
The Cash-Heavy and the Well-Capitalized
In places like Naples, the statistic that more than half of all closings are all-cash explains a lot.
Cash-heavy buyers:
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Are less sensitive to interest rates and more focused on lifestyle, tax optimization, or long-term wealth parking.
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Can move quickly on high-quality properties and often negotiate favorable terms.
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Are less likely to be forced sellers if rents wobble or values dip for a few years.
Even in less affluent markets like parts of Lee and Charlotte counties, well-capitalized investors are advantaged. They can:
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Absorb higher insurance costs
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Invest in resiliency upgrades (new roofs, impact windows, elevation improvements)
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Ride out longer marketing times or soft rental periods without panic selling
The post-2022 reshuffle has, in many ways, widened the gap between “professional or well-funded” and “thinly capitalized” in Southwest Florida.
Who’s Under Pressure?
The groups feeling the most pain today include:
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Peak-cycle buyers who purchased in 2021–2022 with minimal equity, expecting perpetual appreciation.
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Short-term rental investors whose numbers only worked under very optimistic occupancy, nightly rates, and stable expenses.
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Local renters and middle-income households who are now squeezed between rising rents, rising insurance, and limited wage growth.
In Cape Coral and similar markets, some owners who bought near the peak now find themselves:
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With properties worth less than their loan balances
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Facing doubled insurance costs
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Looking at rental income that no longer covers debt service plus expenses comfortably
That doesn’t mean a foreclosure wave is guaranteed. But it does mean more motivated sellers, distressed listings, and “quiet pain” that translates into opportunity for disciplined buyers.
Where the Opportunities Are (and Aren’t)
For AHL’s borrower base—flippers, DSCR investors, small to mid-sized operators—the key question is: Where does Southwest Florida still make sense, and under what assumptions?
“Corrected but Growing” Submarkets
Areas like Cape Coral, parts of Fort Myers, North Fort Myers, and inland pieces of Lee and Charlotte counties fall into a “corrected but still growing” bucket.
Here, you have:
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Prices down from peak, but still significantly above pre-COVID levels
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Population and job growth that remain positive
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Higher inventory and more realistic seller expectations
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Insurance and affordability pressures that have scared away some casual or overleveraged buyers
For experienced investors, that can be a recipe for solid deals…if you’re disciplined.
This is where a lender like AHL can finance:
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Fix & flip projects that add real value (functional upgrades, layout improvements, structural resiliency) rather than purely cosmetic lipstick.
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BRRRR or DSCR strategies that make sense at conservative rent and expense assumptions.
The edge here is not “I’m the only person who knows about Cape Coral.” The edge is “I’m the one willing to underwrite this market soberly when others are still hungover from 2021.”
“Expensive but Durable” Luxury Hubs
Markets like Naples and prime pockets of Collier County are in a different universe.
Prices are high and likely to stay high relative to regional averages. The buyer pool is heavily skewed toward:
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Retirees and lifestyle buyers with strong balance sheets
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Second-home owners
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Investors prioritizing long-term appreciation and asset preservation over immediate cashflow
Opportunities here tend to be:
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Boutique flips with high design and execution value in competitive micro-neighborhoods
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Longer-term holds where the thesis is stability and appreciation, not double-digit current yield
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Premium rentals catering to affluent tenants or seasonal occupants willing to pay for location and quality
It’s hard to make Naples pencil as a pure “cashflow play” unless you’re buying exceptionally well or operating at a very high level in the short-term or luxury rental segment. But as part of a diversified portfolio, it can still make sense for the right investor.
High-Risk Coastal and Flood-Exposed Pockets
Some of the most picturesque parts of Southwest Florida are also the riskiest from a long-term investment perspective.
Heavily flood-exposed coastal strips, older canal-front housing in low-lying areas, and pockets that were hit hardest by Ian face:
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Very high and rising insurance costs
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Stricter building codes and renovation requirements
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Potential long-term climate and regulatory risk
These assets may still produce returns for well-capitalized, sophisticated buyers who price risk correctly and plan for the long term. But for many small investors and thin-margin operators, they are increasingly a mismatch.
If your whole business model depends on:
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Short-term rental revenue staying sky-high
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Insurance costs stabilizing or declining
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Exit prices resembling 2022
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And no major storms for a decade
…you’re not really investing. You’re rolling dice with a beach view.
A Practical Underwriting Framework for SWFL in 2025 and Beyond
If you want a simple rule-of-thumb guide to bringing discipline back into Southwest Florida underwriting, here’s a framework you can adapt.
Use Three Price Anchors, Not One
Instead of comparing everything to the pandemic peak (which is like using your all-time high weight as your “normal” weight), anchor your analysis in three reference points:
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Pre-COVID baseline (2019) – What would this property likely have sold for in 2019? This helps ground you in a world before the mania.
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Peak pricing (2021–2022) – How far off the top are current values? In some SWFL metros, you’re looking at roughly 10–15% off peak.
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Current market reality – What are similar homes actually closing for after price cuts and days on market, not just list prices?
If the only way your deal works is by assuming a quick return to 2022 peak valuations, that’s a red flag.
Treat Insurance as a Deal-Breaker Input
For each property, before you fall in love with the kitchen, fall in love (or not) with the insurance quotes.
At a minimum, you should:
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Get real, property-specific quotes for homeowners and flood coverage early in the due diligence process.
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Stress test your pro forma for 20–30% higher premiums over the next 3–5 years.
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Understand the impact of:
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Year of construction
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Type of construction (block vs. frame)
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Roof age and type
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Elevation and flood zone
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Then ask: if insurance goes up again, does this deal still cashflow? Or does it turn into a beautiful, sun-drenched negative carry?
Reset Expectations on Speed
The days of listing a renovated property on Friday and picking from 12 offers by Sunday are, for the most part, over.
Across many SWFL submarkets:
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Days on market for standard listings are in the 2–3 month range, sometimes longer.
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Inventory is multiple times higher than at the peak, especially in Cape Coral and parts of Lee County.
For flips, underwrite:
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90–120 days to contract, not 15–30.
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Pricing that bakes in buyer expectations of negotiating below list.
For rentals:
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Assume some friction and modest vacancy, especially in product that doesn’t stand out on quality, location, or amenities.
Time is a real cost. Model it.
Focus on Resilient Product
The assets most likely to survive—and even thrive—through the next decade of storms, regulations, and insurance shifts are those that insurers, lenders, and buyers will all still like.
That usually means:
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Newer construction or substantially updated homes (roofs, windows, mechanicals)
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Solid, hurricane-conscious design: concrete block, proper elevation, impact protection
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Locations that command enduring demand: close to jobs, amenities, or truly differentiated lifestyle features
That doesn’t mean older homes or quirky properties are automatically bad investments, but they require much more careful underwriting and realistic rehab budgets.
What This Means for AHL Borrowers and Lenders
For a lender like American Heritage Lending, and the general population of investors, the Southwest Florida story has shifted from “almost anything wins” to “the prepared and disciplined win.”
For Fix & Flip Investors
The investors most likely to succeed in SWFL flips going forward will:
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Buy at meaningful discounts to both peak pricing and replacement cost
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Focus on projects where they can add real value: functional improvements, resiliency, layout optimization – not just paint and countertops
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Structure their financing and business plans so they can pivot to rental or extended marketing times without panic
From a lending perspective, that means saying yes to:
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Borrowers with strong local knowledge and realistic ARV assumptions
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Deals with multiple viable exit strategies (sell, refinance to DSCR, etc)
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Projects that improve the long-term insurability and desirability of the asset
…and being cautious with deals that only work if 2021 makes a surprise comeback.
For DSCR and Long-Term Rental Investors
DSCR investors in SWFL should treat the region like a barbell:
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On one side, premium markets (Naples, prime Collier) where the play is long-term stability and appreciation with modest or thin current yield, backed by strong tenant or buyer pools.
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On the other, more affordable but volatile markets (Cape Coral, inland Lee and Charlotte) where yields can be stronger, but only if you buy right and control expenses.
Key disciplines include:
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Using conservative rent assumptions and realistic vacancy
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Building rising insurance and tax costs into the pro forma from day one
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Structuring DSCR loans with enough breathing room to handle moderate shocks
If your DSCR underwriting assumes a best-case scenario across every variable, you’re not leaving any room for hurricanes, policy changes, or local economic shifts; all of which Southwest Florida has in abundance.
Is Southwest Florida Still Investable?
Short answer: yes, absolutely…for the right investors, with the right expectations, and the right capital structure.
The long answer:
Southwest Florida today is not the speculative playground of 2021. It’s a market transitioning into a more mature phase where:
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Population and job growth remain strong
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Lifestyle and tax advantages still pull people in
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Climate and insurance realities are finally being priced in
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The gap widens between properties and submarkets that are resilient and those that are not
For serious investors and experienced operators, that’s not a bug—that’s a feature. It means you can differentiate yourself via:
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Better underwriting
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Better execution
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Better risk pricing
Instead of losing deals to sight-unseen cash buyers willing to waive every contingency, you’re increasingly competing against other professionals who are also using spreadsheets instead of vibes.
For AHL, this environment rewards what we already do well: structuring financing around real-world investor needs, focusing on business-purpose loans, and helping operators navigate markets where lender expertise is a competitive advantage.
Southwest Florida isn’t broken. It’s just graduated from the “easy mode” level. And if you can make deals work in a world of real insurance costs, realistic marketing times, and normalized appreciation, the returns you build in this phase are much more likely to survive the next plot twist.
Sources
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Federal Housing Finance Agency (FHFA) House Price Index data for the Cape Coral–Fort Myers metro area (2020–2025).
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U.S. Census Bureau population estimates for Lee, Collier, and Charlotte counties (2010–2023).
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Florida Office of Economic and Demographic Research and state demographic reports on net migration and population growth.
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Naples Area Board of REALTORS® (NABOR) and local MLS market reports for 2019–2025 (median prices, inventory, closed sales, cash share).
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Academic and policy analyses of Hurricane Ian’s impact on Lee County housing markets and rebuilding trends.
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Florida and national homeowners insurance data from state regulators, industry surveys, and investigative reporting on post-Ian premium increases.
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Local and regional news coverage (including public radio and regional outlets) on post-Ian housing, rents, and insurance stress in Southwest Florida.
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Market analytics and commentary from real estate data firms analyzing post-peak price corrections in Cape Coral–Fort Myers, Punta Gorda, and similar Sun Belt markets.