One of the best state markets in the United States is the Florida real estate market. Florida contains many world-class markets, such as the Orlando and Tampa real estate markets. Today, we’ll talk about another first-place market in Florida: the Miami real estate market.
Miami was ranked as #12 general real estate market in the United States to invest prospects by PwC and is Florida’s third market on the list, after Orlando and Tampa/St. Petersburg.
If you want to take advantage of this, where should you invest in the Miami real estate market? Why invest in the Miami housing market?
To get answers to these two questions, read on!
4 Reasons to Buy a Real Estate Investment in Miami in 2019
Let’s start with the reasons for investing in the Miami housing market. To be fair, there are several reasons, but we will group them into four main categories.
The number one goal and possibly the sole purpose of an investment property is to generate profits. The benefit comes mainly in two forms: rental income and real estate appreciation. Fortunately for Miami real estate investors, Miami’s investment properties generate high rental income and appreciation (which is an increase in property value over time).
A sign of a lucrative rental market is a high rental income for traditional investment properties and Airbnb. This trend is seen with the Miami real estate market. Both Miami’s short-term rentals and traditional investment properties in Miami have high rental incomes. According to Mashvisor’s investment property calculator,the average traditional rental income for a Miami real estate investment is $2,331 and Airbnb’s average rental income is $3,439.
The average real estate investment in Miami also generates a lot of appreciation. Like many cities in Florida, the Miami real estate market is in the top 10 percent for U.S. real estate appreciation. In the last 10 years, Miami’s properties have appreciated by 52.63%. This translates into an average annual rate of 4.32%.
Miami’s average investment property return impacts, and is affected by Miami’s stellar economy. The Magic City has the largest urban economy in all of Florida. It is also the 12th largest nationwide, with a GDP of $344.9 billion. The city’s burgeoning economy attracts many residents and investors in search of Miami homes for sale. This is particularly highlighted in the city’s employment growth. Future Miami job growth over the next 10 years is expected to be 42.7%, which is much higher than the US average of 33.5%. A lower tax rate than the U.S. average and the lack of an income tax rate in Miami, and across the state, also attracts those interested in a real estate investment in Miami. Among those attracted are interested in miami short-term rentals, which brings us to our next point.
Needless to say, but Miami is an Airbnb powerhouse. This is evident when comparing Airbnb’s higher rental income with its traditional counterpart, as mentioned above. But before we can delve into the success of an Airbnb Miami real estate investment, we have to answer the question: is Airbnb legal in Miami?
The answer to the question, fortunately, is yes. Airbnb is totally legal for an investment property in Miami. However, please note that in some areas and neighborhoods, rentals occupied by non-owners are prohibited. Other common Airbnb regulations in Miami are a business license requirement and a 6% tourist tax and a 6% state sales tax. There are many other Airbnb regulations in Miami.
As usual, Miami is expected to be among the best cities to invest in Airbnb in 2019. In the previous year, it was the best market in the entire state of Florida. Airbnb investors generated a total of more than $134 million the previous year. Of course, this is to be expected, given Miami’s status as a world-class tourist destination. This success will persist in 2019. This should encourage real estate investors to invest in Airbnb Miami investment opportunities.
Finally, a real estate investment in Miami is valuable due to the high demand of the city. According to Mashvisor’s investment property calculator, Miami’sprice-rental ratio is 20, meaning it’s more affordable to rent than buying a property, giving real estate investors and landlords an advantage. In addition, about 70% of the city’s residents reside in rental properties, further expanding the renters pool. The main issue for tenants, however, is affordability rent. According to the Miami Herald, more than half of Miami’s families spend more than 30% of their income on rent. Investors should focus on affordable investment opportunities in Miami to attract as many potential tenants as possible.
source : mashvisor.com