This Destination Is the 'Best-kept Secret in Northeast Florida' — and One of the State's Last Hidden Real Estate Gems

Nestled between St. Augustine and Daytona Beach, Florida's Palm Coast has well-priced waterfront homes that can generate excellent rental income.

Florida's sun-drenched beaches, crystal-clear springs, idyllic islands, and charming small towns have always been a magnet for vacationers and second homeowners. But the Sunshine State's real estate market saw unprecedented growth in the past three years, driving home prices in certain areas into the stratosphere.

However, if you dream of owning a beach house — or a rental property — that doesn't come with an eye-popping price tag, consider the fast-growing northeast Florida community of Palm Coast. According to the latest report from vacation rental company Vacasa, the median home sale price in the area is $345,000, with a cap rate (a.k.a. the yearly return on investment) of 7.13 percent. This means homeowners in Palm Coast could make, on average, $43,120 a year by renting out their homes.

Nestled between St. Augustine and Daytona Beach, this beautiful city is a haven for water enthusiasts. While Palm Coast may not be a household name — it is considered a relatively under-the-radar destination compared to its more famous neighbors — the city has been steadily growing. Census numbers show a 19 percent population growth over a decade, which is impressive for a city that was incorporated only 24 years ago.

And it's popular with tourists, too. Flagler County, where Palm Coast is located, welcomed one million overnight visitors in 2022.

"Palm Coast is the best-kept secret in northeast Florida, with a laid-back lifestyle and seclusion from the hustle and bustle of the city," Kate Gable, a broker with One Sotheby's International Realty, told Travel + Leisure. "Be sure to bring your clubs and your sandals."

Thanks to its year-round sunny weather and world-class golf courses designed by some of the sport's biggest names, Palm Coast and neighboring Flagler beaches are among Florida's top golf destinations.

With a dozen parks, more than 125 miles of biking and walking trails, and its many beaches, Palm Coast residents and visitors have plenty of options to stay active. Kayaking, fishing, boating, and even bird-watching are all favorite activities here. You'll also find many mom-and-pop restaurants and shops, creating a strong sense of community.

"The area is flourishing with breathtaking homes that are half the price of what you would get in major metropolitan cities in the state. Palm Coast is an ideal location for rental properties thanks to its popularity among tourists and its diverse range of neighborhoods that cater to a variety of needs and lifestyles," Gable added, noting that potential buyers have plenty of choices when it comes to the type of property they invest in.

Cinnamon Beach, for example, is a gated oceanfront community with many resort-style amenities — such as a children's splash playground, a swimming pool, and a clubhouse — and is popular for investment properties, according to Gable. Hammock Beach is another sought-after option with its Jack Nicklaus-designed Ocean Course and semi-private club to which both homeowners and guests have access.

"In other areas of Palm Coast, there are opportunities to purchase single-family homes located in gated golf communities, homes built on saltwater canals, and even homes built on freshwater canals," Connie Lattman, the Palm Coast sales manager at Weichert, Realtors Hallmark Properties, told T+L. She explained that properties there are often popular with buyers who own boats and need access to the Intracoastal Waterway without bridges or with bridges that can accommodate tall mastheads.

"On average, properties remain on the market for just a couple of months, which means that it is still a 'seller's market,' but the frenetic multiple-offer situation that was experienced during the height of COVID-19 has somewhat stabilized," she added.

Both Gable and Lattman agreed that working with a local real estate agent, who is knowledgeable about the market is essential.

"Check if there are any rental restrictions in the area you're interested in, as certain communities have regulations that limit or prohibit rental properties," Gable said, giving Hammock Dunes, a private oceanfront golf course community that prohibits short-term rentals, as an example. She also advised factoring any HOA fees into your budget when looking for a home.

"Palm Coast and the Flagler Beaches are growing quickly, and it has never been a better time to invest in this beautiful part of Florida," Lattman added.

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