Miami Real Estate Market Analysis

The City of Miami is home to over 483,000 people in early 2022 - this is around 2.2% higher than in 2020. Miami’s population is currently growing at a rate of 1.1% per year, and it has seen a 21% increase since 2010. One of the reasons for Miami’s population growth is the number of people moving to the city - which also boosts the Miami real estate market.

The migration has started since the pandemic, when a lot of people are allowed to work from home. People move to Miami because of its nicer weather conditions, lower cost of living, and favorable tax rates. The increase in population spikes the demand for both Miami housing and traditional rental properties.

Short-term rental investors are also expected to see an increased demand for vacation rentals this year. Since the COVID restrictions are now being lifted gradually, Florida has opened its doors to tourists from all over the country and around the world. In 2019, Greater Miami attracted a total of 24.2 million visitors. We can expect around the same number of Miami visitors (or even more) this year, boosting the Miami Airbnb market.

There is no doubt that Miami has a prosperous tourism industry, and because of this, the Miami Airbnb market has seen significant growth over the years. Since 2018, the Miami short-term rentals experienced around 8% quarterly growth. As of March 2022 Mashvisor data, the Airbnb market in Miami has an average occupancy rate of 58%.

Short-term rentals are legal in the city of Miami as long as they are licensed by the State of Florida and registered with the Florida Department of Revenue. Short-term rental owners who rent for six months or less should also register for a Tourist Tax Account. Before you list any vacation rental property on any platform, you are required to obtain a Certificate of Use (CU). The CU must be displayed in the vacation rental property and should be clearly visible to guests. You should include the name, address, and phone number of the contact person, as well as the maximum occupancy allowed.

The maximum overnight occupancy for Airbnb rentals is two persons per bedroom, plus two additional persons per property, up to a maximum of 12 persons. Children under three years old are excluded. For example, if your vacation rental home has four bedrooms, the total maximum occupancy is 10 persons. If your investment property has six bedrooms, you can only rent up to a maximum of 12 persons at a time.

The owner of the property or the responsible party must reside for more than six months per calendar year in a Miami Airbnb property. You can rent the vacation property while the responsible party is residing there. This regulation only applies to properties designated as Estate or Low Density Residential on the CDMP Land Use Plan Map. If the short-term rental has a swimming pool, you must display at least one of the pool safety features listed in Section 515.27 of the Florida Statutes before you rent out the property. This provision is not applicable to a vacation rental with a community swimming pool, like a condominium.

Before you buy any Miami real estate investment property, it’s important to check the Airbnb rules and regulations in that particular Miami neighborhood. This is to ensure that you don’t break any rule to avoid penalties so you can maximize your profits.

With the current price to rent ratio of 23, about 71% of houses in Miami are occupied by renters. The current average rent for a single-bedroom apartment in the city of Miami is $2,500, which is a 56% increase from 2021. From last month’s Miami real estate market data, the average rent for a studio unit rose by 6%, while the rent for a single-bedroom apartment increased by 4%. There is an 8% increase for the average rent for a two-bedroom apartment.

The traditional cap rate in Miami is currently at 1.79%, while the traditional cash on cash return is at 1.76%. If you are planning to buy a Miami income property, it’s important to consider the price of the property against your potential profit. According to Mashvisor, there are currently 11,188 traditional rental listings in Miami, FL, with an average monthly rental income of $3,477. The number of traditional rentals available is quite low compared to Miami’s population, which is the reason why the demand for rentals keeps the rental prices high.