To understand this, you'll need to first understand how real estate is valued. The short version, is that the only monetary reason to buy a house as that you expect it to increase in value. All other revenues and costs tend to come slightly below break even.
A tax and interest rate normalized home
The importance of assuming a standard interest and property tax rate is discussed in the next section, but a 5% mortgage interest rate is the sign of a "normal economy", and if interest rates will eventually go up to 5% then your home will eventually drop in value as a result of affordability (main component of real estate value assuming constant liveability) impacts on potential buyers.
- 5% interest. The best mortgage rates. (If you paid all cash, you can usually get 0.5% less interest than the best mortgage rate from government bonds)
- 1.5% property tax.
- 1% to 0,5% in sales commissions/transfer costs. The average home is resold in 5 years. 5% in sales commissions from the round trip of buying and selling would make a 1% cost. Keeping the home for 10 years lowers this cost to 0.5%
- 0.2% insurance.
- 5% maintenance and upkeep. Every 25 years the roof must be redone. Heating, cooling, plumbing, electrical, driveways, sump pumps, applicances are other costs that pop up regularly. You can also add small things such as mowing the lawn in that you don't have to do any maintenance whatsoever on a government bond. Also included in upkeep is the cost of modernizing the decor to maintain resale value.
If there is Florida land that is worth $100k at breakeven maintenance and normalized interest costs within the presumably hopeful model, then purchasing value exists only if you can buy it at a discount such that you can profit from the positive rental value created by the discount. Purchasing florida land at a 50% discount provides for a 2.5% annual rental profit. If the value decreases by 50% in the next 20 years, then you still break even as a result of the rental profit. You also break even if you keep the property for 40 years, and it is worth 0 then. But this is only possible if you are able to obtain a 50% discount from the normally presumably "hopeful future" price that homes have. It also assumes no significant property tax hikes.