Eyeing a sunny, seaside city for your next real estate investment? Consider short-term rentals in Miami, Florida.
Miami has always been on top of the United States’ favorite vacation destinations. Its perpetual summers, miles and miles of beaches, epic nightlife, and vibrant food, culture, and shopping keep it on every vacationer’s radar.
It’s the 8th Most Popular U.S. Destination on TripAdvisor’s Best of the Best list this year, and was #5 on the site’s list of top summer destinations in 2021.
Miami’s tourism draw isn’t just appealing. It’s convenient. Major international air and cruise ship ports are situated here, and the city metro is very easy to navigate. Miami is the 5th most walkable city in the country, with plenty of good public transportation and trolley options. Plus, it’s a biker’s paradise.
So aside from good food, great vibes, and plenty of shores and sunshine, what makes Miami a great spot for investing in short-term rentals? Let’s find out.
Miami attracts massive numbers of visitors each year. You’d never run out of short-term renters in this bustling tropical oasis.
In fact, it’s the #1 U.S. city to invest in short-term rentals right now, according to BeyondPricing.com.
Miami’s diverse economy and easy access to international markets have made it a gateway to foreign business, as well as a mecca for housing and real estate investment.
According to MillionAcres, a real estate investing advice company, Miami attracts lots of highly educated, high-income-earning professionals. Doctors, lawyers, bankers, financial consultants, and investors come here to visit, work, play, and eventually settle.
All of those folks need furnished rentals in Miami, whether for short, medium, or long-term stays.
This year alone, the city has been cited for the following:
Here’s why this phenomenal city has an edge in STR investing over many other places in the country:
Miami has over 5 times the housing inventory than the national average. At a time when the majority of the country was facing a housing shortage, this city had more than enough properties to supply the local demand. But the inventory has also decreased over the past couple of years.
Miami is densely populated with a population of 6.2 million after an increase of 0.78% in 2021. Real estate value is high and consistently increasing. The price-to-rent ratio is at 23, making it an attractive market for rental property investment.
But while home values may be affordable for some buyers, prices have gone up 24.3% over the past year. The market is definitely trending upward.
Miami is a red-hot real estate market. Rent is rising in most metropolitan areas, but prices in downtown Miami are now some of the most expensive. An average 2-bedroom apartment, for example, now costs around $3,200 per month. Rate increase is reported at a conservative 39% to as much as 58% when compared to 2020 figures.
But that doesn’t dissuade many from coming here whether on a short-term or long-term basis.
The occupancy rate for short-term rentals in Miami before the pandemic was over 50%. In December 2020, the city’s short-term rental industry reported occupancy levels higher than those of hotels since the pandemic started. Occupancy rates now stand at 75%.
Rental vacancies are at their lowest point in 5 years.
Florida is a tax-friendly state that requires no state tax, no personal income tax, no capital gains tax, and no estate tax. Property taxes rank below the national average, but those in Miami-Dade are slightly higher than the state average. The low mortgage rates also bring additional benefits to both real estate buyers and sellers.
Investments have been pouring into Miami in recent years, and continue to do so despite the pandemic. Tech CEOs from Silicon Valley and venture capitalists from New York have been migrating to the city in recent years, bringing with them countless jobs and opportunities.
Greater Miami saw nearly $2 billion in funding for companies in 2020 alone. Biscayne Times called the city the new “tech haven”, reporting a 45% increase in tech jobs since 2015. It’s ranked by WalletHub as one of the best cities to find jobs or start a career this year.
As could be expected, the job market drew a steady stream of job-seekers. And as more and more tech and other companies open, with all-out support from the local government, the demand for real estate is surging.
This year, multi-billion companies The Blackstone Group, Founders Fund, and Softbank Group secured office spaces in different parts of the city.
It’s also worthwhile to note that starting in 2022, Formula One will be holding its Grand Prix races in the city for the next 10 years.
Even Billionaire Elon Musk is setting his sights on Miami. He has proposed to build a tunnel underneath the Miami River to alleviate the city’s traffic congestion, and the governor and mayor are very open to it.
Last year, Miami ranked the 4th best place to start a business after the pandemic based on economic indicators like funding opportunities, business-tax environment, growth in entrepreneurship, and quality of the labor pool.
This year, it’s hailed as the 2nd best city to start a business in general by FoxBusiness and WalletHub.
Read also: The Best Markets to Invest in Airbnb — 5 Important Criteria to Use
Miami’s warm temperature — typically between 61 and 88 degrees even during the winter — is primarily why snowbirds and retirees flock here. But did you know vast numbers of Millennials are drawn here too? Realtor.com called Miami a “Millennial Magnet”, placing it at the #2 spot where young people want to be in 2017.
Overall, the city ranks high in the global livebility index based on factors like healthcare, education, infrastructure, culture, work-life balance, and the environment. Niche.com gave it top scores for nightlife, cultural diversity, and public schools.
Miami was also cited as the #1 healthiest North American city in 2020 by MindBodyOnline, a wellness technology platform. They cited factors like residents’ overall health, fitness attitudes, and habits, and the success of gym and spa businesses. Miami is also one of the most environmentally friendly cities in the US.
With year-round warmth, 35 miles of beaches, and over 800 parks to explore, folks seeking to stay active and healthy throughout the year will find it irresistible to come here.
Not to mention that the city’s 365 days of sunshine, with its loads of natural Vitamin D, can be a wholesome, all-natural therapy to boost the immune system and avoid getting Covid-19!
Read also: 13 Simple Ways to Boost Your Short-term Rental Income This Summer
All the above factors combine to make Miami a viable place to invest in. The city offers tremendous opportunities for business growth, financial freedom, and even personal health and wellness.
Do your diligence and study the various factors that affect a market’s profitability. Use sites like AirDNA, Transparent, BiggerPockets, and AllTheRooms to find solid numbers and important data to help you.
With enough research, you’ll see that many places present lots of possibilities for short-term rental investing. But not a lot can offer as many promising benefits as Miami does.
Once you’ve acquired a rental property in Miami, let Cohostit do the heavy lifting for you. They provide complete short-term property management services from marketing to maintenance, to automation and issue resolutions. Click here to book a call and see if you qualify.
Read also: Pet-friendly Airbnb: 6 Advantages of Allowing Dogs in Your Vacation Rental
