So, you’ve been thinking about investing in real estate? Then you should definitely consider buying an investment property in Miami, which is a favorite tourist destination year-round both for Americans and foreigners because of the beautiful beaches, the amazing weather, the proximity to Latin America, and the multiple attractions. Let’s look at the most prominent features of Airbnb Miami and the trends in the Miami real estate market.
Miami is a Hot Airbnb Market
To begin with, currently Airbnb in Miami is one of the largest short-rental markets in the US. To be precise, it is in the top five after NYC, Los Angeles, San Francisco, and Boston. These five cities generated 55% of the $2.4 billion revenues at Airbnb between October 2014 and September 2015. That should already sound quite convincing for someone considering real estate investing, right?
Related: Top 6 Airbnb New York Neighborhoods and More
At the moment there are over 4,500 listings for Airbnb in Miami, and the number is constantly growing. Experts expect an accelerated growth in this market in most areas of Miami, not only along the beach. You can rent a room in someone’s house in North Beach for $85 per night at Airbnb in Miami; for $149 per night you can have a modern, furnished one-bedroom apartment; and for $300 you can rent a one-bedroom penthouse. For comparison, a three-star hotel room averages at $111 per night, and a five-star – at $246.
Below you can see the five Zip codes with the most properties listed in October 2014-September 2015 and how much each of them received in revenues over this period:
- South Beach, South Pointe, and City Center: $45.7 million
- Bayshore and Mid-Beach: $11.5 million
- Golden Beach, Eastern Shores, and Sunny Isles Beach: $8.7 million
- North Beach and North Bay Village: $7.5 million
- Downtown Miami and Brickell Key: $5.9 million
What Attractions are Bringing Tourists to Miami?
In addition to the endless beaches, the ocean water, and the pleasant weather yearlong, Miami has a lot more to offer. Some of the most popular attractions which increase the appeal of Airbnb Miami include:
- Miami Beach: A separate municipality from Miami connected to the mainland by a series of bridges, this island offers beautiful beaches, beachfront restaurants, cafes, and shops in addition to hosting the Art Deco District.
- Art Deco District: This place hosts wonderfully restored, pastel-colored buildings from the 1930s with neon signs and indoor dining possibilities. Some of the most popular structures are the Beacon, the Colony Hotel, Waldorf Towers, the Breakwater, the Cardozo, and the Cavalier.
- South Beach: Located at the southern end of Miami Beach, this is the most famous and popular part of it. It is always busy: for sunbathing and swimming in the summer and for nice walks in the winter.
- Ocean Drive: Passing along the oceanfront in Miami Beach and through South Beach and the Art Deco District, this road offers amazing sightseeing day and night.
- Little Havana: The Cuban district is a popular tourist destination for its distinctive cultural flavor, restaurants, specialty food shops, Latin music, and numerous entertainment possibilities.
- Zoo Miami: The only zoo in continental US located in a subtropical climate hosts more than 2,000 wild animals in a cageless environment, which gives visitors the feeling of embarking on a safari.
- Jungle Island: It hosts a bird sanctuary, a wildlife habitat, and a botanical garden with over 1,100 birds in a tropical forest setting and 2,000 exotic plants.
- Miami Seaquarium: This special place organizes daily shows with dolphins, killer whales, seals, and other ocean species in addition to having observation tanks with alligators, sharks, and tropical fish.
Annual Events That Attract Additional Visitors to Miami
Airbnb Miami is popular both in the summer and in the winter, especially among foreign visitors and tourists from the northern US. Still, however, there are times of the year when Miami is an even more popular destination than otherwise – during the time of special events. As a potential Airbnb Miami host, you should keep those dates in mind and set the price for your listing accordingly. Remember, you can and indeed MUST charge more at times when demand is certain to be higher.
So, if you decide to purchase a rental property in Miami for Airbnb, keep an eye on those:
- Art Deco Weekend – January – Features art exhibits, parades, and culinary offerings.
- Lifetime Miami Marathon and Half Marathon – February – An opportunity for running along a scenic route in pleasant weather.
- Food Network & Cooking Channel South Beach Wine & Food Festival – February –The most prestigious US gourmet gathering.
- Miami Open – March – The largest tennis event after the Grand Slams featuring two weeks with nearly 200 of the top-ranked tennis players and over 300,000 spectators from more than 70 countries, with an economic impact of $386 million per year, more than the Super Bowl.
- Winter Music Conference – March – Delegates from over 70 countries representing their electronic dance music industries, attracting more than 100,000 attendees.
- Miami Beach Polo World Cup – April – A large sport event with numerous polo players and celebrities in addition to 15,000 spectators.
- Miami Fashion Week – May – The only resort-wear-exclusive fashion event with over 10,000 attendees.
- Miami Broward Carnival – October (Columbus Day) – Over 50,000 participants celebrating the culture, traditions, and art heritages of the Caribbean.
- Miami International Auto Show – September – One of five top auto shows in the US every fall featuring more than 40 of the world’s top automobile manufacturers.
- NASCAR’s Ford Championship Weekend – November – Three races over the course of three days attracting 150,000 spectators from 50 states and 30 countries.
What’s Going On with Airbnb Legality in Miami?
As in most locations that are so quickly growing on Airbnb, Airbnb Miami has been facing more and more hostility by local hotels (because of the competition) and regular citizens (because of the associated noise, pollution, and lack of safety). Thus, there has been a lot of pressure to change existing legislation in order to regulate and even limit short-term rentals in Miami. In 2011 Florida passed legislation which prohibits local governments from regulating and restricting vacation rentals with the exception of regulations that had been passed. Nonetheless, in March this year Miami increased the fine for first-time violators of the law prohibiting short-term rentals (of less than six months and one day) in certain areas from $500 to $20,000!!! Repeat offenders will pay up to $100,000. Such legislation claims to protect the residents who live next to the beach, but it definitely shields the hotel lobby from Airbnb Miami competition.
Related: The Trend of Legalizing Airbnb Rentals
How’s the Overall Miami Real Estate Market?
In short, the Miami real estate market is currently shifting to a buyer’s market. Sales are falling down. In the second quarter of 2016 the sales of condos and single-family houses dropped by 25%. The number of active listings for sale is going up, and property listings stay up for longer. Prices have not started going down yet, but it is expected to happen soon.
Related: Is It a Buyer’s Market or Seller’s Market?
The reasons for this slowdown in sales are the strong US dollar, the weakened foreign economies, especially the Latin American ones (most property buyers in Miami used to be Latin Americans and Europeans), and the fact that investors have already purchased most of the foreclosure inventory which developed during the recession. After the tremendous growth which the Miami real estate market experienced over the last few years, such calming down is only normal and signifies a more stable market in the future. Experts generally agree that investing in a rental property in Miami is safe because there will always be people coming in. Moreover, lending conditions are rather favorable now with low interest rates which are though forecast to start rising by the end of the year.
One neighborhood you should keep in mind if you are thinking about buying an investment property in Miami is Little Havana as it is largely undervalued at the moment. This region has a great potential because of its proximity to the urban area and its public transportation. In 2015 the median home price in Little Havana was $250,000 compared to something in the range between $1,500,000 and $3,200,000 in Miami Beach, only eight miles away.
So, if you think joining Airbnb Miami as a host might be the right step for you, check out Mashvisor for important figures on properties in the various neighborhoods.