Short-term rentals face a number of legal challenges in many jurisdictions across the country. While some municipalities see them as a net positive for the local economy, several others view them as a direct threat to local B&Bs and small hotels as well as affordable housing, which prompts them to impose restrictive regulations on them. A good example of the latter is Miami Beach. So what are the Airbnb regulations in the city? Is Airbnb legal in Miami Beach? And what is the ideal real estate investment strategy for the Miami Beach real estate market? This article will explore the legal status of Miami Beach short-term rentals and provide you with a detailed overview of the regulatory framework of Airbnb Miami Beach.
An Overview of Airbnb Miami Beach Laws
As stated above, Miami Beach has some of the most restrictive short-term rental rules in the country. As a result, property owners have to abide by a wide range of laws that include strict zoning rules that limit short-term rentals to only certain areas. Here is an in-depth look at the current legal situation of Airbnb Miami Beach.
1- Short-term rental eligibility
The city of Miami Beach imposes several requirements on Airbnb hosts. First and foremost, the host must be the income property owner as the city does not allow renters to accommodate short-stay tenants. In the zones where short-term rentals are allowed, the activity is not limited to primary residences and the owner is not required to occupy the property for any period of time before renting it out. Another important requirement to keep in mind are the rules pertaining to condo associations/HOAs. Owners who are affiliated with such entities need to have a letter stating that short-term rental properties are allowed.
2- Permitted zones
One of the most restrictive aspects of Airbnb Miami Beach is the city’s zoning rules. In fact, short-term rentals are only permitted in certain residential areas. Most of the areas where short-term rentals are not allowed are situated in Miami Beach’s main single-family residential districts. Consequently, it is imperative that you check the city’s zoning map to get an idea of where the permitted zones are located if you want to invest in Miami Beach real estate.
The Airbnb Miami Beach registration process is quite lengthy. Moreover, it requires getting a State Vacation Rental Dwelling license, a business tax receipt number, and a resort tax certificate number. Registration can take up to two months and it involves submitting a host of documents. Here is what you will need for each step:
State Vacation Rental Dwelling License
- Florida sales tax number
- Federal Employer Identification Number
- Social Security Number
- Certificate of Balcony Inspection
Business Tax Receipt Number
- State Vacation Rental Dwelling License number
- Proof of ownership
- Letter from condo association/HOA
- Notarized affidavit form
Resort Tax Certificate Number
- Driver’s license number
- Social security number
- Business Tax Receipt number
Like nearly every jurisdiction in the Florida housing market, the city of Miami Beach assesses tourist taxes on short-term accommodations of up to 6 months. In fact, the tourist tax rate is 6% in most Florida cities. This includes a 3 percent Convention Development Tax, a 2 percent Tourist Development Tax, and a 1 percent Professional Sports Facilities Franchise Tax. However, only the Convention Development tax is applicable in Miami Beach.
Miami Beach imposes very high fines for illegal short-term renting. In fact, these penalties are by far the highest in the US housing market. Hosts who don’t abide by the latest Miami Beach short-term rental ordinance can incur fines as high as $20,000 for the first offense. Furthermore, the fines escalate with each additional offense.
As you can see, the short-term rental market in Miami Beach is currently controlled by some very strict regulations. But will this change in 2020? Let’s go over some recent Airbnb Miami Beach legal developments.
Potential Changes to the Current Airbnb Regulations
The Airbnb legal challenges that owners face have promoted many of them to attack the city’s ordinances in court. Furthermore, Airbnb Miami Beach laws and fines were deemed illegal in a recent case. It is not yet clear what this means for the future of non-owner occupied rental properties in Miami Beach as the city does not appear to be backing down from its anti-short-term rental stance. As a result, pessimistic observers expect more Airbnb legal issues in the coming years.
The Ideal Alternative to Short-Term Rentals in Miami Beach, FL
Navigating through a maze of legal ambiguity or operating in markets that limit short-term rentals to the primary residence is not ideal for real estate investors. Nonetheless, there is a profitable alternative to Airbnb Miami Beach. Opting for a traditional real estate investment strategy can yield tremendous results in the Miami Beach housing market. In fact, there are several positive trends that bode well for the future of long-term rentals in the city. Here are some of them:
- The Miami Beach real estate market is a large rental market with renters making up 63% of all residents.
- The city attracts a constant influx of retirees who are looking to rent, making a Miami Beach real estate investment profitable.
- The average monthly rental income for long-term rentals in Miami Beach is $2,563, according to Mashvisor’s data.
- Miami Beach is a “very cold” buyer’s market according to Zillow.
Here is one of the best neighborhoods in Miami Beach where you should consider buying a rental property:
- Median Property Price: $1,602,475
- Price per Square Foot: $750
- Price-to-Rent Ratio: 76
- Rental Income: $1,746
- Cap Rate / Cash on Cash Return: 1.2%
To find the perfect Miami Beach investment property, use Mashvisor’s rental property finder. This advanced tool can help you zero-in on top-performing income properties that match your preferences in a matter of minutes!
Check out some of the stats on these Miami Beach investment properties for sale that we have pulled from the tool:
- List Price: $257,000
- Traditional Cash on Cash Return: 11.5%
- List Price: $85,000
- Traditional Cash on Cash Return: 7.2%
- List Price: $425,000
- Traditional Cash on Cash Return: 6.0%
Airbnb Miami Beach: The Bottom Line
Given the legal hurdles to overcome and the multitude of laws that restrict short-term rentals, implementing an Airbnb Miami Beach rental strategy is not recommended. The best course of action at this point is to opt for a long-term rental strategy or to simply wait for a laxer regulatory climate.