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Jan 03, 2022 PropStream

5 Reasons Miami is a Great Place for Buy and Hold Investors

Where sunny skies and luxurious beaches meet a booming economy, it should come as no surprise that more people are drawn to The Magic City, AKA Miami!

For an investor, particularly a buy and hold investor, this city is bursting with opportunity in 2022, whether you specialize in short-term or long-term rentals. Population, market, and travel trends create a demand for these rental property types.

To help you understand these trends fully, we’re going to discuss five reasons Miami is a wonderful place for buy and hold investors.

Here’s what you should know:

 

1. Miami’s Prices for Luxury Properties Are Continuing to Increase

Since 2015, housing prices in Miami have gone up by about 40%, and experts aren’t expecting this trend to slow down.

Miami’s luxury home prices are anticipated to increase about 10% in 2022, putting it in the top spot for growth rate by global city. Across the globe, these four cities follow Miami with their increasing price rates:

  • Sydney (Australia) in second with a 9% increase
  • Los Angeles in third with an 8% increase
  • Auckland (New Zealand) and London (United Kingdom) tied for fourth with a 7% increase.

What does this mean for buy and hold investors? Well, as a property you’ve purchased continues to grow in value, the potential ROI (return on investment) increases! 

In addition to earning a profit while a tenant is renting the property, you’re more likely to get a generous return when you’re ready to sell the property if it’s still increasing in value. Additionally, if you want to use the property’s equity to finance a renovation or buy your next investment, the increasing price should help you do that.

 

2. Florida’s Population Is on the Rise

From 2010-2020, the population in the sunshine state grew around 14.6%, which is double the rate of average population growth in the United States. 

While the population was already on the rise pre-pandemic, the pandemic only pushed more residents to the sandy beaches and warmer temperatures that Florida has to offer. 

Other reasons for the rise in population include:

  • Florida’s low taxes (Florida has the 11th lowest tax rate in the United States)
  • Flexibility in living situations as more companies offer remote work
  • Big-city dwellers see the appeal of more land for their money
  • More people want to have a second home to vacation in and are attracted to Florida’s coastline

In Miami specifically, the population has increased by about 19.73% since 2010, while the annual growth rate is around 1.09%. 

 

3. The Housing Shortage Is Expected To Continue

While Florida’s population is growing, housing shortages throughout the United States are expected to continue, possibly into 2025.

Material shortages are a contributing factor in the housing shortage as new construction homes aren’t being built as quickly and frequently as before. Since there are fewer new constructions, the market for existing homes is incredibly competitive. 

We haven’t seen homes selling at the current rate since the late 1990s. Once homes are listed, many sellers have seen buyer interest in as little as one week! Also, relatively low interest rates have been fueling buyer demand, which some speculate will continue to offset inflation while others feel the interest rates may begin to increase again.

Since you can target homeowners of off-market properties with PropStream to secure a deal as a real estate investor, this gives you an edge in this competitive market. Having access to multi-sourced real estate data allows you to target motivated sellers while other buyers are only bidding on properties currently on the market.

Once you score a few rental properties, you can fix them up and have them ready to rent for new residents who can’t buy but are interested in living in the area.

 

4. Rent in Miami Is Continuously Increasing

As a result of the housing shortage, Miami rent has risen around 27% and will likely keep rising in 2022.

Since many people moving to South Florida are coming from cities where rent is already high, the rent increase isn’t likely to steer them away from making the move. 

Fun fact: The average rent in Manhattan for a 700 square-foot apartment is around $4,000, while the average rent in Miami for an 800 square-foot apartment is about $1,900!

Even if new Florida residents don’t prefer to rent with the higher costs, the current inventory levels can’t support the number of people moving there. Because of this, many people have no choice but to rent until more homes are available on the market.

 

5. More People Are Planning to Travel in 2022, Creating Opportunity for Short-Term Rentals

Even in May of 2021, tourism in Miami passed pre-pandemic levels.

A month later, in June of 2021, occupancy rates in the area were at 117% what they were two years earlier. Now that more people are feeling comfortable with travel and restrictions have eased, this number is expected to grow even more in 2022.

If you’re an investor specializing in short-term rentals, this is a phenomenal trend to capitalize on, especially before spring break and summer holidays. Miami ranks number four in the nation for the busiest spring break spots, so a short-term rental in this area is a potential gold mine between March and April!

 

Using PropStream’s Heat Map Feature

While the housing shortage impacts those looking to buy a vacant home to live in, this doesn’t need to slow you down as an investor!

PropStream offers multi-sourced, relevant data for every region throughout the United States, as well as 120+ unique search filters and 12 Quick List options to help you find off-market properties with owners who may be motivated to sell. 

Tip: To learn more about finding homeowners who may be motivated to sell, check out our Academy Course: ​​Finding Motivated Sellers!

If you’re interested in investing in rental properties, our Heat Map will guide you as you decide on the region that will offer the highest ROI. To learn more about your area of interest, click the “Analytics” button in the upper right corner of the map. From there, you can select one of these four categories to learn about the area’s trends:

  • Estimated Values
  • MLS Stats
  • Price Growth
  • Rental Values

As a buy and hold investor, you may benefit the most from the “Rental Values” category. This category offers information for:

  • Rent Price
  • Rent Price/Bedroom
  • Rent Price/Sq. Ft.

After you’ve specified the information you want to know about an area, use our Draw Tool to narrow your search even further and find up-and-coming regions to invest in.

 

Are You Ready to Soak up Miami’s Hot Real Estate Market?

With more people flocking to Florida to enjoy the sunshine and warmer weather, you may want to take advantage of this as a buy-and-hold investor.

Whether you focus on short-term or long-term rental properties, people are lining up to vacation in Florida or become full-time residents. When it comes specifically to Miami property investments, the coastal metropolis is bursting with opportunity.

Want to start finding investment opportunities in Miami and marketing to motivated sellers? Sign up for our 7-day free trial today!

 

Published by PropStream January 3, 2022
PropStream