Buying Investment PropertyInvesting in The Miami Real Estate Market in 2018: Yes or No? by Heba Baker June 3, 2018June 27, 2018 by Heba Baker June 3, 2018June 27, 2018The Miami real estate market is heating up.Location is key when it comes to choosing the right investment property. Whether you’re investing in traditional rentals, Airbnb rentals, short-term rentals, or long-term rentals, location always plays a major role. You’ve probably heard of the buzz surrounding investments in South Florida, specifically in the Miami real estate market. Miami is currently a hot market and you need to take advantage of the opportunities it’s providing. Read on to see how you can start making money in real estate in Miami!Related: The Miami Real Estate Market: Should You Invest in Short Term Rentals or Long Term Rentals?The Miami Real Estate MarketMiami may be one of the smallest major cities in the United States, but that isn’t stopping real estate investors. According to Forbes, foreign investors have dropped $7.5 billion on homes in the U.S. costing over $1 million. Why are we telling you this? Because 25% of those investments were in Miami! The Miami real estate market has been attractive to many real estate investors because of its tax advantage.The federal tax reform signed into law last year has created constraints on real estate investors. The new tax laws have set a cap on deductions for income, sales, and property taxes at $10,000. This new cap has driven the higher demand for property in Florida. Miami real estate investors are facing competition with other investors flowing into Miami from the northern states. This is because Florida has no state income tax, so the new laws don’t apply there. So investors with high property values and income tax would much rather go to Miami. The Miami real estate market is also known for its low price per square foot in comparison to other real estate markets.Related: The Top 5 States With No Property Tax in 2018Should You Invest?From the very beginning of the year, the Miami real estate market has been very strong. The housing market is currently a seller’s market, but that doesn’t mean you shouldn’t invest in Miami. We actually recommend that you do invest. According to data from the Multiple Listing Service, property in the Miami real estate market is selling quickly! Properties listed barely stay on the market which makes sense with what we’ve already told you about higher demand in Florida.Related: How to Buy an Investment Property in a Seller’s MarketTo get a better idea of what you’re looking at when investing in Miami, let’s go over some numbers. Mashvisor’s investment property calculator is providing you with the information you need to make an investment.Miami’s Numbers:Median Property Price: $479,646Traditional Rental Income: $2,424Airbnb Rental Income: $2,708Traditional Cap Rate: 0.7%Airbnb Cap Rate: 1.62%Traditional Cash on Cash Return: 0.7%Airbnb Cash on Cash Return: 1.62%The median property price might be a bit higher than you expected, but this shouldn’t be a worry for you. What this price should be reflecting to you is the high market value for this property. You could be finding the best real estate investment in Miami right now. Click here to see the going rates in Miami just two months ago. The median property price has gone up, but so has monthly rental income for both traditional rentals and Airbnb rentals. Even better is that cap rate has gone down which corresponds to less risk in buying an investment property in the Miami real estate market. If you still want more information on the Miami real estate market, let’s take a look at the best neighborhoods to buy an investment property in.Related: Is Airbnb Miami a Smart Real Estate Investment Choice at The Moment?TOP NEIGHBORHOODS IN THE MIAMI REAL ESTATE MARKETBrickellMedian Property Price: $527,500Traditional Rental Income: $2,809Airbnb Rental Income: $3,850Traditional Cap Rate: 0.4%Airbnb Cap Rate: 2.36%Traditional Cash on Cash Return: 0.4%Airbnb Cash on Cash Return: 2.36%Airbnb Occupancy rate: 58.09%Downtown MiamiMedian Property Price: $330,000Traditional Rental Income: $2,411Airbnb Rental Income: $2,563Traditional Cap Rate: 0.8%Airbnb Cap Rate: 1.56%Traditional Cash on Cash Return: 0.8%Airbnb Cash on Cash Return: 1.56%Airbnb Occupancy rate: 58.72%Wynwood – EdgewaterMedian Property Price: $527,500Traditional Rental Income: $2,959Airbnb Rental Income: $2,346Traditional Cap Rate: 0.3%Airbnb Cap Rate: -0.08%Traditional Cash on Cash Return: 0.3%Airbnb Cash on Cash Return: -0.08%Airbnb Occupancy rate: 52.73%Coral GablesMedian Property Price: $625,000Traditional Rental Income: $2,009Airbnb Rental Income: $2,736Traditional Cap Rate: -0.29%Airbnb Cap Rate: 0.71%Traditional Cash on Cash Return: 0.4%Airbnb Cash on Cash Return: 0.71%Airbnb Occupancy rate: 45.86%Miami IslandsMedian Property Price: $449,000Traditional Rental Income: $2,606Airbnb Rental Income: N/ATraditional Cap Rate: 0.23%Airbnb Cap Rate: N/ATraditional Cash on Cash Return: 0.23%Airbnb Cash on Cash Return: N/AAirbnb Occupancy rate: N/AAlameda – West FlaglerMedian Property Price: $415,000Traditional Rental Income: $1,810Airbnb Rental Income: $1,977Traditional Cap Rate: 0.54%Airbnb Cap Rate: 0.72%Traditional Cash on Cash Return: 0.54%Airbnb Cash on Cash Return: 0.72%Airbnb Occupancy rate: 50.83%North BayfrontMedian Property Price: $592,500Traditional Rental Income: $2,214Airbnb Rental Income: $2,258Traditional Cap Rate: 0.61%Airbnb Cap Rate: 0.72%Traditional Cash on Cash Return: 0.61%Airbnb Cash on Cash Return: 0.72%Airbnb Occupancy rate: 50.03%Little HaitiMedian Property Price: $260,000Traditional Rental Income: $1,587Airbnb Rental Income: $1,554Traditional Cap Rate: 2.4%Airbnb Cap Rate: 2.91%Traditional Cash on Cash Return: 2.3%Airbnb Cash on Cash Return: 2.91%Airbnb Occupancy rate: 45.08%Douglas ParkMedian Property Price: $344,900Traditional Rental Income: $2,157Airbnb Rental Income: $2,529Traditional Cap Rate: 0.76%Airbnb Cap Rate: 1.44%Traditional Cash on Cash Return: 0.76%Airbnb Cash on Cash Return: 1.44%Airbnb Occupancy rate: 53.21%Little HavanaMedian Property Price: $445,000Traditional Rental Income: $1,505Airbnb Rental Income: $1.257Traditional Cap Rate: 0.47%Airbnb Cap Rate: 1.12%Traditional Cash on Cash Return: 0.47%Airbnb Cash on Cash Return: 1.12%Airbnb Occupancy rate: 55.59%Summing it all upSo we’ve given you all the information you need, but what does it all mean? One thing you might notice is that the Airbnb rental income exceeds the traditional rental income in most of the neighborhoods in the Miami real estate market. Airbnb rentals have gotten very popular over the recent years and with all the high demand from other investors, it is highly recommended to invest in a short-term Airbnb rental property. Start your search for investment properties on Mashvisor.Renting out on Airbnb can end up being quite profitable when you do it right and follow the right strategy. To find the optimal rental strategy for your investment properties, use Mashvisor’s heatmap. Our heatmap will directly help you pick the optimal rental strategy in each neighborhood in Miami, or any other city you’re interested in. To start using Mashvisor’s heatmap and many other tools, sign up here. Start Your Investment Property Search! START FREE TRIAL LocationMiami FL 0FacebookTwitterGoogle +PinterestLinkedin Heba BakerHeba is Content Writer at Mashvisor with a BA in Business Administration. Most of all, she enjoys writing about the constantly changing markets in the US real estate industry. If not writing, Heba is exploring and learning. Previous Post All You Need to Know About Becoming a Landlord Next Post The Ultimate Real Estate Investment Strategies for Part-Time Investors Related Posts Buying an Investment Property? Here’s How to Finance It What Are the Best and the Worst Investment Property Financing Options? How to Buy Investment Property Without a Real Estate Agent Low Risk Investments: How to Lower the Risk of Your Real Estate Investment 6 Crucial Features to Consider When Buying a Condo for Investment Failed with Residential Property Investments Before? Read This! Say Hello to Early Retirement with Real Estate Investment Properties How to Become Rich with Rental Properties Is Property Investment More Profitable Than Stock Investment? How to Make Money with Real Estate: Buy and Rent Out a Beach Investment Property How to Start a Real Estate Business with No Money in 2018 Buying Foreclosed Homes as Investment Properties: Yes or No?