The Miami real estate market is the place to invest in real estate.
Only a few months into the New Year and Miami is already showcasing traits of a strong and successful real estate market in many different investment property sectors. As a real estate investor, you need to hop on board right now. We’ll show you why and where to invest in real estate in Miami.
Miami Real Estate Market: The First Month
The month of January has proved all of the positive Miami real estate market predictions to be true! Sales of condos, single family homes, and even luxury real estate investment properties (priced around $1 million) have gone way up, compared to last year’s sales in the Miami real estate market. In the whole of Miami-Dade, sales of investment properties have gone up by 5.1% since January of last year.
Naturally, with a greater volume of sales of real estate property come shorter “days on market”. The average single family home came under contract in 47 days after being listed for sale in the Miami real estate market. It took an average of 98 days to close on the deals of these real estate investment properties.
With apartments for sale, they came under contract in an average of 75 days; closing on these real estate investments took an average of 123 days in the real estate market (all Miami real estate market statistics are provided by MLS).
The major cause of these real estate market trends? The housing inventory shortage, of course. This effect is apparent in both the rise in prices, the greater volume, and the speed in sales of Miami investment properties. This time last year, there were 6,255 single family homes for sale in the market, compared to 6,590 homes for sale.
Easily find investment properties, even in a real estate market with low inventory. Click here to get started.
Wait, the Miami Real Estate Market Seems to Be a Seller’s Market
It’s true that a lot of these factors will favor selling investment property over buying investment property in the Miami real estate market. So, why is the Miami seller’s market still a top option for where to invest in real estate? Mainly because of the value real estate investors will get from a Miami investment property. Mashvisor’s investment property calculator shows the Miami real estate market to be one of the top cities for investing in real estate. Both traditional rentals and Airbnb rentals are hot right now for real estate investing. Let’s take a look at the numbers our investment property calculator returns for Miami:
- Median Home Price: $400,708
- Monthly Traditional Rental Income: $2,363
- Traditional Rental Cap Rate: 1.82%
- Traditional Rental Cash on Cash Return: 1.82%
- Monthly Airbnb Rental Income: $2,774
- Airbnb Rental Cap Rate: 3.11%
- Airbnb Rental Cash on Cash Return: 3.11%
Don’t be intimidated by the median house price of Miami investment properties. The rental income for both Airbnb rentals and traditional rentals will bring a good return on investment. The cap rate and cash on cash return (while not considered the ideal return on investment by real estate experts) is pretty competitive in the current housing market. (Just compare cap rate and cash on cash return across different cities using Mashvisor’s investment property calculator!) Basically, a real estate investor will get his/her money’s worth with a cash investment in the Miami real estate market.
Related: What Is a Good Return on Real Estate Investment?
The Best Reason to Buy Miami Investment Property Right Now
If you’re not convinced by the numbers above from our investment property calculator, then consider this: Today you’re buying investment property in the Miami real estate market, tomorrow you’re selling it quickly, for a great return on investment. How? Well, not only have we already shown you how low the days on the market are, but the home prices are on the rise. Competition is high, and you’ll be able to sell for a higher price soon after purchasing. Become a seller in a strong seller’s market!
Don’t wait around until prices rise even further! Click here to find a Miami investment property right now.
Where Is the Buyer’s Market?
If you’re still not willing to step into the seller’s market, certain investment properties make up their own buyer’s market in the Miami real estate market.
The first kind of real estate property is apartments for sale. While there is a steady rise in the price for Miami apartments for sale, the inventory is much higher for these real estate properties. With a 14 month inventory, apartments for sale create a buyer’s market.
The second kind is foreclosures and short-sale investment properties. The sales for “fixer-upper” investment properties like foreclosures and short-sale investment properties have dropped. They only make up 9% of the total sales of real estate property. This means there is less competition for buying investment property of these types. Don’t forget, foreclosures and short-sale properties can already be bought for below market value from motivated sellers. In the Miami real estate market, they’re a great choice for a real estate investor looking for a buyer’s market.
Related: What Is the Best Type of Miami Investment Property?
Top Neighborhoods in the Miami Real Estate Market
Mashvisor’s investment property calculator shows that there are 5 neighborhoods in the Miami real estate market in which a real estate property will perform well. Take a look:
Auburndale
- Median House Price: $330,000
- Monthly Traditional Rental Income: $1,775
- Monthly Airbnb Rental Income: $2,862
- Traditional Rental Cap Rate: 2.44%
- Airbnb Rental Cap Rate: 5.05%
- Traditional Rental Cash on Cash Return: 2.44%
- Airbnb Rental Cash on Cash Return: 5.05%
North Bayfront
- Median House Price: $290,000
- Monthly Traditional Rental Income: $2,351
- Monthly Airbnb Rental Income: $2,448
- Traditional Rental Cap Rate: 3.87%
- Airbnb Rental Cap Rate: 4.25%
- Traditional Rental Cash on Cash Return: 3.87%
- Airbnb Rental Cash on Cash Return: 4.25%
Coral Way
- Median House Price: $540,000
- Monthly Traditional Rental Income: $2,453
- Monthly Airbnb Rental Income: $3,357
- Traditional Rental Cap Rate: 1.7%
- Airbnb Rental Cap Rate: 3.01%
- Traditional Rental Cash on Cash Return: 1.7%
- Airbnb Rental Cash on Cash Return: 3.01%
Shenandoah
- Median House Price: $685,000
- Monthly Traditional Rental Income: $2,296
- Monthly Airbnb Rental Income: $3,226
- Traditional Rental Cap Rate: 1.79%
- Airbnb Rental Cap Rate: 2.9%
- Traditional Rental Cash on Cash Return: 1.79%
- Airbnb Rental Cash on Cash Return: 2.9%
Douglas Park
- Median House Price: $347,450
- Monthly Traditional Rental Income: $2,391
- Monthly Airbnb Rental Income: $2,982
- Traditional Rental Cap Rate: 1.41%
- Airbnb Rental Cap Rate: 2.66%
- Traditional Rental Cash on Cash Return: 1.41%
- Airbnb Rental Cash on Cash Return: 2.66%
While a real estate investor will have success with either an Airbnb rental or a traditional rental, Airbnb rentals bring more rental income and a greater return on investment in the Miami real estate market.
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Related: Four Things to Consider Before Purchasing an Airbnb Investment Property
The Miami real estate market is a great place for real estate investing this year. The US housing market is a seller’s market all around, so why not invest in real estate in a city where you’ll get the greatest value from your real estate investment?!