Miami is a major city located on the Atlantic Coast in southeastern Florida. With a population of 471,000, it is the principal, central, and most populous city of the South Florida metropolitan area, the most populous metropolis in the southeastern US. South Florida, also known as Greater Miami, is home to 6.1 million people, making it the 7th largest metro area in the nation. According to NeighborhoodScout, more than 70% of the city’s residents are renters rather than homeowners, which is beneficial to those considering investing in the Miami real estate market. This means long-term rental properties enjoy particularly high demand and occupancy rates, and so they can make for a profitable real estate investment in the city.
Miami is a major center of finance, commerce, and international business. Many large national and international companies call the city home. The financial district in Downtown Miami has one of the largest concentrations of international banks in the US. Because of its proximity to Latin America, the city serves as the headquarters of Latin American operations for more than 1400 multinational corporations, including well-recognized names such as FedEx, Microsoft, and Visa. International trade plays an important role in the city’s economy. Due to its central location between the US and Latin America, Miami is known as the Cargo Gateway of the Americas. PortMiami and Miami International Airport are among the nation’s busiest ports of entry, especially for cargo from Latin American countries and the Carribean. Miami is also a major center for hospitals and clinics, and its Civic Center is emerging as a hub for research institutes, medical centers, and biotechnology industries.
The tourism and entertainment industries are a vital part of the economy in Miami. Known as the Cruise Capital of the World, the port of Miami is the number one cruise passenger port in the world, offering vacationers a long list of fantastic destinations. Tourists are also drawn to the city’s numerous museums, theaters, entertainment venues, and performing arts centers. More than 23 million domestic and international tourists visited the city in 2018, contributing nearly $18 billion to the local economy.
The Miami housing market was named the 12th most important US Market to Watch by PWC in its annual Emerging Trends in Real Estate: United States and Canada 2019 report. Miami’s Downtown is undergoing a multibillion dollar transformation, with multiple construction projects and countless development opportunities. The report highlights Miami’s unparalleled ability to attract global real estate investors, making it a top location for international homebuyers.
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The Miami real estate market has witnessed a strong real estate appreciation in recent years. According to NeighborhoodScout, since Q1 of 2000, Miami property values have increased by 174.56%, which brings an average annual appreciation rate of 5.39%. Zillow reported a 2% increase in home values over the past year, meaning Miami homes continue to enjoy appreciation.
The Miami housing market is currently a buyer’s market, meaning there are many more available houses for sale than buyers seeking to purchase properties. This is the ideal time for those considering to buy an investment property, since they are able to choose a great home from a larger inventory and buy it at a lower cost.
With tourists visiting in record-breaking numbers, Miami is one of the best cities for Airbnb investment. The Miami-Dade County had the highest Airbnb revenue in Florida in 2018, growing much faster than the year before. With 954,000 guest arrivals, Airbnb hosts in Miami-Dade earned a total of $204 million, which is an increase of 52% from 2017. This Airbnb growth is expected to continue in the coming years.
In order to legally operate a short-term rental in Miami, the first thing a property owner must do is check if their listing is located in a legally permissible zone. The rental property must comply with the city’s zoning requirements and use definitions as found in the Miami 21 Zoning Code. In fact, Airbnb rentals are prohibited in all single-family homes and in many multi-family housing buildings in certain zoning districts of the city, especially in residential areas. A vacation rental property must also comply with the Building and Housing Standards set by the city.
It is important to keep in mind that non-owner occupied Airbnb rentals are illegal in most zones. Airbnb Miami hosts must either be on-site, or rent the property out only if they live there for more than 6 months per calendar year.
Prior to listing and advertising the investment property on a vacation rental platform, Airbnb Miami hosts must obtain a Business License, as well as a Certificate of Use so that a property inspection can be scheduled. The cost is $136.17 for the certificate and inspection. All Miami rental properties being rented out for a period of 6 months or less are subject to short-term rental taxes, including tourist and state taxes.
If a residential unit or building is found to be operating as a short-term rental illegally, guests will be evicted and the owner will face fines.