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The Ultimate Guide to Investing in Miami Real Estate

Downtown Miami

Known for its beautiful white sandy beaches, diverse cultures, tasty cuisines, and near-perfect weather, Miami has earned its rightful place as one of America’s most popular travel destinations. 

In addition to all that, this beautiful city also has a very strong and healthy real estate industry.

When trying to decide where to invest in property, the location is always paramount. And when that location is within Miami, Florida, then the odds of success are in your favor.

Why? 

Well, unlike most places, Miami’s property market has a proven reputation for being very consistent. 

For the past 10 years, Miami’s real estate appreciation rate has been - consistently - above average

Moreover, Zillow.com reports that Miami property values have appreciated by +4% for the past 5 years. 

If you are looking to invest in Miami’s real estate industry, keep on reading to know everything you need to know about this sunny city! 

If you would like help investing in Miami real estate, contact us at Income Realty Corp for a Free real estate investor consultation

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South Florida's Property Market Appreciation Overview

Did you know that Miami has the second-largest housing industry in the southeastern U.S; which makes it the 8th largest in the whole country? 

Amazing, right?

In just ten years, the city has seen a cumulative appreciation of 22.64%, ranking it among the top 30% of cities in America. 

That’s roughly 2% growth each year.

In fact, Zillow predicts that there will be a 3.7% increase in home values in Miami before the end of 2019. Which is great news for property investors.

Moreover, in 2018 alone, property values went up by 7.56%, which was higher than almost 82.79% of all cities and towns in the U.S. alone.

Among the highest appreciating Miami neighborhoods are:

8 Reasons Why You Should Invest in Miami’s Real Estate Market

So, why exactly should you invest in Miami? 

What makes it so special or better than other booming real estate markets? 

There are so many things that make Miami an ideal investment opportunity for property investors. Below are 8 reasons that explain why Miami Real Estate is for you.

  1. The ROIs for landlords and property investors is impressive. 

  2. It’s a fact that the return on investment is the most important consideration for you as an investor. 

    That’s because, above everything, you want to make sure your investment will thrive.

    Luckily, in Miami, ROIs rarely disappoint. This is in part due to the high demand for housing. 

    This demand is fueled by a population that prefers to rent. This creates a great opportunity for rental housing investors.

  3. Renters form a large percentage of the population.

  4. Did you know that almost 70% of Miami’s residents rent

    And if you are wondering why, it's because most of the people work in temporary or seasonal jobs. Specifically, in the tourism industry which employs over 145,000 people.

    Moreover, the city’s housing supply is low, which results in high property sale prices. 

    This creates more demand for rental housing because it’s more affordable than buying a house. 

    And that’s why a lot of investors are buying single-family homes and then renovating them into multiple rentable units.

  5. Miami is very landlord-friendly.

  6. You’re probably wondering what that means.

    It means that Miami is one of the few places that offer landlords and real estate investors more freedom than the status quo. 

    For example:

  7. The tourism industry is booming. 

  8. Another great reason to invest in Miami’s real estate industry is because of all the tourism. 

    In 2017 alone, Miami had a record-breaking 15.86 million unique visitors. Moreover, during the same year, overnight visitors spent a whopping $25.97 billion in direct expenditure.

    Impressive, right? So, what does that mean for property buyers and investors?

    Miami offers vacation home buyers, landlords and investors numerous opportunities to earn from tourism.

    Miami Beach
  9. There is a strong job market.

  10. Aside from leisure, a lot of people relocate to Miami for work. 

    Why? 

    Well, the city is not only Florida’s biggest urban economy but it also has America’s 12th largest GDP (by metropolitan areas).

    Thanks to its thriving tourism industry, growing economy, and strong property market, Miami’s unemployment rate sits at 3.9%. Which is slightly below the national average.

  11. The city has a big retiree population. 

  12. Due to its great weather and vibrancy, Miami’s population keeps growing by the day.

    One important point to note is that the city has a big retiree population and most of them come to live out their days in South Florida. 

    So, what does this mean for you?

    For starters, housing value fluctuations rarely affect most retirees. And since they don’t have a reason to sell their homes, there are fewer homes on the market for property buyers.

    Obviously, we all know that without sufficient supply, demand goes up and so do property prices and the demand for rental properties.

  13. Miami has beautiful white sandy beaches.

  14. Beaches are some of Miami’s main tourist attractions. 

    Most people travel to the city just to spend a day on its stunning beaches. And sometimes, some even decide to stay because of the beautiful scenery. 

    And who can blame them? 

    Miami is not only stunning and serene but it also has one of the best climates in the U.S.

    This explains why the city’s population grows by roughly 2% every year. 

    Obviously, a growing population eventually leads to a higher demand for housing, right? And that’s good news for any investor.

    Miami Beach
  15. There is a strong international market.

Statistics show that foreign-born citizens constitute more than half of Miami’s population. 

This means that the city is very immigrant friendly. And this is one of the reasons why Miami remains attractive to foreign investors.

There are many reasons why foreign investors are taking so much interest in Miami’s real estate industry. 

For example: 

3 Smart Tips for Miami Real Estate Investors

Now, before you decide to invest in Miami real estate, you should first ensure that you are ready and well-informed. 

Here are a few things you should do:

  1. Know your target market.

  2. Before anything else, you have to know everything there is to know about the market you are investing in. 

    Unfortunately, some investors often assume that they’ll succeed just because they invested in a strong property market.

    What they don’t know is that it takes a lot of experience, knowledge, and analysis in order to succeed in real estate. 

    Figure out which tenant group you are looking for: students or working-class members, long-term or short-term tenants.

    Choosing your exact location should be next. Look for a location that’s still growing and closer to your target renters. 

    For example, beach-side properties are ideal for tourists, and students who prefer to live close to their schools, and working-class members wouldn’t mind a shorter commute.

  3. Prepare enough investment capital.

  4. Miami investment properties are expensive and don’t have a zero-down mortgage plan. You need to have at least a 20% down payment to get better mortgage terms.

    Moreover, you need to set aside a small allocation of funds for repairs, especially if you’re buying a bargain-priced property. Generally, you may have to do a few repairs and revamps in order to make the property attractive to tenants.

    Also, don’t forget to save some funds to act as a vacancy allowance. Most properties don’t have tenants within the first few months. Make sure that even during a vacancy period, you’ll have enough capital to cater for your expenses as well as mortgage repayments.

  5. Decide on how you are going to manage your rental property.

  6. Miami Beach

Should you do it yourself or hire a property manager?

Hiring a property manager takes a huge burden off of you and can greatly improve the experience you have with your investment. 

Property managers handle almost all aspects of handling the property. This means that you get more time and freedom to work on other projects.

Choosing the right property manager is, needless to say, key. Not all of them are created equal so take your time to select the company best suited for your needs.

Conclusion

In summary, it’s safe to say that Miami, Florida is a city worth investing in. 

Numbers don’t lie, which is why it’s clear that investing in Miami’s property market can be a very lucrative venture.

But, as you set off to look into properties, make sure you have every bit of information you need to make the investment decision that best fits your long-term goals.

Hopefully, you’ve found this guide helpful to get you curious about the great opportunities Miami has to offer! 

If you're considering investing in Miami don't hesitate to reach out to us at Income Realty Corp. We've been helping people buy and manage real estate in Miami for nearly 40 years!