When it comes to buying-to-let, location is key. That’s why some investments end up in a high rental yield, while others result in nothing but financial misery. If you want your investment business to succeed, you’re insanely lucky to come across this article.
Those who undervalue the importance of pre-investment research end up thinking that the rental business is a losing game. But in reality, all it takes to succeed is to remove the guesswork and make an educated decision. If buying-to-let is your idea of having fun, get a desk globe, make it twist, and decide on your rental investment location by stopping the globe with your forefinger. But if you aim to build a source of passive income – conduct research before making a purchase.
This blog post will help you navigate your way through investment opportunities in Miami and choose the most profitable and least risky option.
Why Miami?
Because waterfront property is always in high demand. Who wouldn’t want to live in close proximity to picturesque beaches?
Because Miami is on the list of best American cities for real estate investment, it boasts an 18.6 percent return year by year.
Because local real estate prices are affordable compared to other major cities in the US.
What neighborhoods are best for the task?
Let’s see what real estate professionals have to say in this regard. The chances are good that you’ll be surprised by their answers.
“Like many who have enjoyed vacationing in Miami, I was initially drawn to consider buying Miami Beach condominiums as investment about two and a half years ago. However, through assessing condo pricing and condo rents, I quickly discovered that likely returns would be 4% or less. Instead I chose to invest in a unique neighborhood just north of Miami’s hot “design district” called Buena Vista filled with modest single family homes built mostly in the 1930s and 1940s. In Buena Vista, I found and invested in homes that generate for me returns from year-round renters between 5.5 and 8 percent because they make 2-3 bedrooms homes on small lots accessible, particularly to millennial renters, at rents equivalent to what they would pay for a Miami Beach studio or small one bedroom apartment.”
Alex Cohen, Commercial Lead Specialist at Core
“33137 is one of the hottest zip codes in Miami, which includes Edgewater, and parts of Wynwood and Midtown. In these neighborhoods, condos are popular due to the ease of management, however many nearby neighborhoods such as Buena Vista, Little Haiti and Allapattah have great single family homes, duplexes and multifamily properties that are all the rage at the moment due to the long-term redevelopment prospects. The North Beach neighborhood of Miami Beach is another very interesting option, as it’s going from a sleepy area of the beach to full of plans for ultra-luxury projects and a revived downtown area.”
Sepehr Niakan, Broker at HB Roswell Realty
We’ve taken into account expert opinions and recent statistics and composed a list of Miami’s five best neighborhoods for rental property investment in 2017. Here’s the result:
Coral Gables
Median rental price: $3,222/mo (April 2022)
Median purchase price: $734,900
According to locals, Coral Gables is the best and most beautiful part of Miami (no wonder it’s usually referred to as ‘The City Beautiful’). But, as numbers suggest, this neighborhood is more than just a pretty face. Although the median resale price is high compared to other neighborhoods of Miami, the market value of local properties has been growing steadily in the last ten years. It seems like a great spot for property investment, right?
Buena Vista
Median rental price: $1,120/mo
Median purchase price: $392,053
Although this leafy residential neighborhood contains plenty of vacant rental properties at the moment, industry experts agree upon the fact that Buena Vista is the next big thing in the rental market in Miami. Located in close proximity to downtown Miami, Little Haiti, and Biscayne Bay, this place is believed to attract more prospective tenants in the years to come. One of the biggest pros of living in Buena Vista is affordable housing. And given that millennials are named the generation of renters and the largest living generation, there are grounds to assume that soon enough local vacancy rate will drop to its possible minimum.
Edgewater
Median rental price: $1,800/mo
Median purchase price: $174,000
Although the area might look like a classic working-class neighborhood with its single-family residences and some high-rise residential towers, we encourage you to take a closer look at what Edgewater has to offer. This place is perfect for outdoor activities, dining with friends, and happy, laid-back living. But most importantly, real estate developers from all over the world have started to recognize the value of this area and appreciate its bayfront location. And as the neighborhood is rapidly emerging, this year might be the best time to make your rental property investments.
Little Haiti
Median rental price: $4,188/mo (April 2022)
Median purchase price: $1,237,375 (April 2022)
According to expert opinion, Little Haiti has got all chances to become Miami’s hottest residential neighborhood in 2017. And although it poses certain challenges for local Little Haiti residents, it provides plenty of business opportunities for those in buy-to-let business. Take a closer look at Little Haiti’s growth index, and you’ll get rid of all possible doubts.
Northeast Coconut Grove
Median rental price: $1,750/mo
Median purchase price: $414,000
Another part of Miami that appears to be a victim of gentrification is Coconut Grove, or its Northeast part, if to be perfectly specific. Once famous for being the mecca of hippies, today, Northeast Coconut Grove features fancy theme restaurants, bars, chain stores, and luxury hotels. Located close to the University of Miami, this neighborhood is home to thousands of international students (and not all of them prefer living on campus). If you’re tired and need a hint at a prominent – rental properties in close proximity to colleges or universities are always a good idea.
Downtown Miami
Median rental price: $1950/mo
Median purchase price: $340,000
It is a center of Miami’s banking, investment, and financial sector. This is the area with the most foreign consultants from different parts of the world who are disinclined to buy property but still need a place to call home. Downtown Miami has a permanent demand for upscale, luxurious apartments and condos for rent from the management of international corporations with headquarters in Miami. The property prices might not have a strong upward trend, but they will never fall below the market- downtown investment will always preserve its value regardless of any economic stagnation.
Brickell
Median rental price: $2150/mo
Median purchase price: $315,000
This is a dense, high-rise residential neighborhood with many upscale luxury condominiums and apartment towers. If you are in your 20s or 30s and you are successful- you want to live in Brickell. That is where extended social circles of young professionals meet and communicate. Tenants are paying a lot extra for location, not the apartments. The rent prices have been stable for the last two years. New developments are balanced with the increasing demand. The neighborhood is a mature and stable market with a firm footing, perfect for long-term investment.
West Avenue
Median rental price: $2000/mo
Median purchase price: $315,000
West Avenue is certainly a market for big investors. At first glance, it might seem that property here is terribly overpriced, and there is no way you will get a good return on your investment. Take a second look. Miami Beach is one of the most prestigious spots in high-end culture. There is high domestic demand from the residents of other US global cities and increasing demand from wealthy foreign investors looking for a safe, comfortable place for their families. It is a cosmopolitan international hub. In contrast to New York and San Francisco, the prices in Miami are pretty affordable. Additionally, the property taxes are significantly lower than in the other parts of the US.
North Miami Beach
Median rental price: $2700/mo
Median purchase price: $1,319,499 (April 2022)
North Miami Beach is a very diverse residential area. It offers a wide array of properties, from affordable smaller houses in North/Mid Beach to upper-class mansions. If you search good enough, you can find luxurious waterfront properties for less than a million dollars. The supply of new condos and apartments has significantly increased over the last couple of years. At the same time, the prices have been slightly increasing annually over the past three years.
North Beach
Median rental price: $2300/mo
Median purchase price: $486,064
Another sure bet for the property investment is North Beach. The neighborhood consists of predominantly upmarket condos. However, there are still abandoned and underdeveloped areas waiting for their investors. The good news is Miami Beach voters have recently approved a massive revitalization of the ten-block district along 71st Street between Collins Avenue and Indian Creek Drive. The project includes new housing developments and significant rezoning of the public spaces. It would lead the way for a more dense and walkable neighborhood with new dining and retail. You still have time to jump in the boat before the prices skyrocket.
Miami is ranked highly for its rental business opportunities – and for a good reason. The city boasts excellent weather, a picturesque skyline, relatively affordable housing, and countless options regarding sports, culture, and business—no wonder why people of all ages, occupations, and races are flocking there. Don’t waste your chance to invest in one of the sunniest cities in the country. If you are actively looking for investment opportunities, check out our comprehensive analysis of other booming southern real estate markets, such as Dallas, Phoenix, and Houston.
Its my dream to own a property in Miami as the I am fond of beaches. Miami is such an amazing place to reside and hence I will be definitely sharing this investment opportunities with my husband. I am glad I came across this and thanks for investing time and sharing this informative post.
So based off this article are you saying there is never a time where it would make sense to buy in South Beach? Me and my Wife have been renting South of Fifth for the last year and are discussing putting in an offer for our 1 bedroom unit. We’d continue to live there for next two years at least then would rent it out. Interested to hear your thoughts!