Many real estate investors have been asking the same question: What’s the deal with the Miami real estate market 2017? The Magic City’s been attracting investors for quite a few years now with great success. But what has 2017 had and still has in store for Miami? We’ve got all it laid down below.
A Quick Overview of the Miami Real Estate Market 2017
It’s no secret that the Miami real estate market 2017 is expanding. No doubt Miami in itself is a very diverse city. You have your high end commercial districts, distinct retail stores, a booming tourism industry, growing financial institutions, its well known entertainment industry, and an ever growing real estate market. In recent years Miami’s growing economy has also created thousands of new job opportunities. This has led to an increase in the number of people moving into the city, and in turn the demand for rental properties in addition to home purchases.
At a larger scale, and according to Miami Herald, Miami-Dade’s real estate market grew by 5% at the beginning of this year. One can see how this reflects on the city’s rapidly changing real estate market and the real estate investment opportunities provided there. More specifically, Miami recorded $2.8 billion in construction and development plans that are further driving growth in the city. Furthermore, the Miami Association of Realtors reports that singe-family home sales increased by 3.7%, while the average property prices also rose significantly in 2017. According to Mashvisor’s latest data, the median property price in the Miami real estate market 2017 is $452,599.
Related: Why You Should Go for Miami Real Estate Investing Now
The Miami Real Estate Market 2017 Is an International Market
Miami has always been drawing foreign real estate investments, especially from Chinese investors in the US real estate markets. According to the National Association of Realtors (NAR), investors from Brazil, Venezuela, Canada, and Argentina have also been buying real estate properties in Miami. The NAR recorded $6.2 billion worth of properties bought by foreign investors between the summers of 2015 and 2016.
Miami real estate is considered more attractive in the eyes of foreign investors due to the fact that it’s more affordable than properties in cities like New York and San Francisco. Development plans have also been attracting foreign real estate investors because they see potential in the city’s growing market. The heightened demand is causing real estate property prices to rise for the Miami real estate market 2017. And while an indicator of a thriving market, it could prove challenging to local real estate investors and home buyers facing affordability crisis.
The Miami Real Estate Market 2017: Our Latest Figures
Median Property Price: $452,599
Average Monthly Rental Income:
- Airbnb: $2,825
- Traditional: $2,890
CoC Return:
- Airbnb: 3.04%
- Traditional: 2.51%
Cap Rate:
- Airbnb: 3.04%
- Traditional: 2.51%
Note: Mashvisor estimates show the same figures for cap rate and CoC return because our calculations assume no mortgage is included (all cash payments are made).
Miami’s top investment neighborhoods are: Douglas Park, Flagami, Brickell, Biscayne Island, and Coral Way. To view the same data for specific neighborhoods and investment properties, make sure to search for Miami investment properties on Mashvisor.
The Miami Real Estate Market 2017: Airbnb Miami
Miami is a favorite vacation destination for foreigners and Americans alike. And what’s a better investment in a vacation city than vacation rentals? Airbnb Miami joins the largest Airbnb markets in the nation alongside New York City, San Francisco, Boston, and Los Angeles. And as you can note from the above data, the CoC return and the cap rate prove Airbnb Miami as a more profitable investment (versus traditional investment). A slight difference exists between the rental income for both types of investments.
But what does it look like legally?
Airbnb Miami has been a fairly controversial issue, especially among other Florida Airbnb markets. As of May 2017, Airbnb collects Miami-Dade County tourist tax equal to 6% after a tax deal was reached in March of this year. Moreover, the city’s current fine for violating the short term rental law has increased from $500 to $20,000. The hotel industry has supported the imposition of the tax in addition to stricter legislation, as Airbnb (as well as other vacation rental services such as HomeAway), have been acting as strong competitors to the industry. Local residents have also supported such legislation because they consider Airbnb a threat to their safety, tranquility, and local business. However, earlier in March, Airbnb sued the City of Miami and in April, Miami judge Beatrice Butchko issued a verdict that stops the city from banning short term rentals such as Airbnb in the city’s residential neighborhoods.
The main take on this is that if you’re considering investing in an Airbnb property in Miami, make sure to read up the latest laws and regulations on the Airbnb website, as well as legal legislations in general for the specific city and/or state, in this case – Florida.
Related: Why You Should Consider Investing in Miami Airbnb Properties
Final Words on the Miami Real Estate Market 2017
Overall, the mix of foreign investment, the surge in construction projects, and the consistent growth of Miami’s tourism industry all contribute to making the city a great real estate investment location. And despite the challenge of rising prices, the Miami real estate market 2017 is one we definitely recommend! So if you’ve made up your mind about investing in Miami real estate, make sure to use Mashvisor’s investment analytical tools. We’ll help you obtain information on CoC return, cap rate, occupancy rates, rental income, NOI, and ROI, among other important indicators. Plus, using Mashvisor’s investment property calculator will save you the trouble of using spreadsheets and will help you make the most out of your investment.
Hurry up with your purchase of a Miami rental property as prices are set to continue to rise in the years to come as the result of the interaction between expected supply and demand.
Related: The 7 Best Places to Buy a Vacation Home in Florida
