The Miami real estate market is moving to a buyer’s market, which is a sign of a more stable housing market.
According to real estate experts, Miami is the most stable market in the country right now. Mr. Daniel Kodsi, Developer of Paramount Miami Worldcenter, says that Miami real estate investing is a safe and valuable investment.
Miami has been a popular choice for real estate investors from around the globe, especially from South America. Latin American investors are attracted to Miami real estate investing because of favorable legislation for property buyers (for example, in Florida all commissions are paid for by the property seller), the relatively stable rents, and the legal protection against non-paying tenants (the option for eviction).
There is domestic interest as well. Florida offers better tax advantages for real estate owners and investors than other states, including homestead exemption and no state income tax.
A clear sign of the increase in domestic demand is the growing interest in good schools as opposed to dining and shopping options. Still, Miami continues to be a fun-in-the-sun lifestyle city and more.
Disclaimer: The data showcased in this blog is derived from Mashvisor’s data for Q4 2017, and the actual data may change drastically with time due to changes in the market performance.
Miami Real Estate Market Performance
The Miami real estate market is looking solid for this quarter of the year, with both Airbnb and traditional rental properties on an equal ground with regards to their performance on average; the market offers a great number of investment opportunities for all types of real estate investors.
Although typically associated with higher-than-average property sale prices, the median property sale price in the Miami real estate market has been moderate at $513,353, or $1,677 avg/sq.ft.
Despite the fact that the Miami real estate market is more seasonal due to its main attraction being the Miami beach in summer times, the housing market still shows promise for this upcoming winter, and its cash on cash return averages have been solid at 4.03% for traditional rental properties and 4.08% for Airbnb rental properties.
In spite of Airbnb properties coming slightly on top with regards to good cash on cash return, the average rental income for traditional rental properties has shown to be slightly higher with an average of $2,715 monthly rental income, while Airbnb’s average rental income is at $2,567 per month.
With 2,778 investment properties, 1,077 Airbnb properties, and 13,066 traditional rental properties, it is apparent that the dominant type of rental properties that real estate investors have been resorting to is the traditional rental strategy.
Finally, the average Airbnb occupancy rate for short term rental properties in the Miami real estate market has been 51%, which is great considering the fact that Miami’s real estate is a seasonal market, and its highest performance usually takes place during summer times.
Based on our data, these are the best performing neighborhoods in the Miami real estate market and their stats.
Brickell
Brickell has been the most active housing market in Miami with over 500 investment properties available for purchase. This is perhaps due to Brickell’s proximity to the beach as well as the downtown area of Miami, making it a popular choice for traditional and Airbnb investments alike.
- Mashmeter 69%
- Median Price: $530,000
- Cash on Cash Return: 2% Traditional | 2% Airbnb
- Cap Rate: 9.21% Traditional | 7.01% Airbnb
- Rental Income: $4,070 Traditional | $3,097 Airbnb
As you can see, although Airbnb’s performance has been great, Brickell has been performing especially well for traditional rental properties, with phenomenal cap rate and rental income values.
Downtown Miami
It comes as no surprise that the Downtown Miami real estate market has also been doing very well. At the heart of Miami, the downtown area has been one of the main attractions for travelers from all around the globe, making it perform extremely well for Airbnb rental properties in particular.
- Mashmeter 72%
- Median Price: $344,900
- Cash on Cash Return: 3.14% Traditional | 2.54% Airbnb
- Cap Rate: 9.56% Traditional | 10.35% Airbnb
- Rental Income: $2,746 Traditional | $2,975 Airbnb
South-West Coconut Grove
There isn’t much to say about the SW Coconut Grove except that it remains to be one of the most active neighborhoods in the Miami real estate market, with over 500 investment property listings, making it only second to Brickell in that regard.
- Mashmeter 48%
- Median Price: $329,000
- Cash on Cash Return: 5.91% Traditional | 7.41% Airbnb
- Cap Rate: 8.74% Traditional | 9.86% Airbnb
- Rental Income: $2,424 Traditional | $2,735 Airbnb
Also due to its proximity to the beach, the SW Coconut Grove has been performing very well for both rental strategies, with Airbnb coming slightly ahead.
Wynwood – Edgewater
Not one of the most popular neighborhoods for Airbnb properties, Wynwood’s preferred rental strategy for real estate investors has shown to be traditional rental properties.
Additionally, Wynwood has shown to be one of the more expensive neighborhoods in the Miami housing market, with its average median price being the highest on this list.
- Mashmeter 73%
- Median Price: $549,000
- Cash on Cash Return: 2.23% Traditional | 1.52% Airbnb
- Cap Rate: 8.20% Traditional | 5.97% Airbnb
- Rental Income: $3,757 Traditional | $2,735 Airbnb
Flagami
Flagami is unique on this list due to its very high performance for Airbnb rental properties in comparison to traditional rentals. The neighborhood proved to be a major attraction for tourists looking for more affordable short-term residences, which made it a perfect pick for real estate investors looking for affordable investment properties to rent out through Airbnb.
- Mashmeter 67%
- Median Price: $349,900
- Cash on Cash Return: 3.69% Traditional | 5.98% Airbnb
- Cap Rate: 6.37% Traditional | 8.08% Airbnb
- Rental Income: $1,856 Traditional | $2,355 Airbnb
To Sum Up
The Miami real estate market is a solid ground for real estate investments throughout the year. Although the housing market’s performance peaks during the summer season, it remains a very viable real estate investment destination even months after the summertime is over, and it is still managing to attract a large number of real estate investors to it.
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