The world-class beaches, numerous museums, vibrant nightlife, impressive cultural scene and business and international trade opportunities found in Miami have justifiably helped it earn the reputation of being a wonderful place to live, work and play. In fact, Forbes recently named Miami as the happiest city in the U.S. to work in.
Q2 2015 Miami Rental Market Update
In Q2 2015, Miami was the eighth-best housing market in the Southeastern U.S. for rental property owners and 37th-best in the country as a whole. Since Q1 2015, Miami retained its eighth-place ranking in the Rental Ranking Report's regional rankings for the Southeastern U.S. but dropped two spots in the national rankings.
Most real estate statistics indicate that Miami rental real estate is a lucrative investment. Miami rental prices jumped an impressive 6.45 percent year-over-year in Q2 2015, which was about 30 percent greater than the national average for that metric during that time period. Property values appreciated by an even greater amount, 10.73 percent year-over-year (more than twice the national average of 5.08 percent), a rate that was the third-highest in the U.S. in Q2 2015. Miami's moderately low vacancy rate of 5.70 percent (compared to the national average of 6.72 percent) and superb annual job growth rate of 2.83 percent (compared to the national average of 2.03 percent) further demonstrate that demand for housing there is quite strong and will likely remain that way for quarters to come.
Unfortunately, due to Miami's location in a region of the United States that is prone to tropical storms, rental property investors must take insurance costs into consideration when calculating the potential returns they could get there. The average annual homeowners insurance premium in Miami is over $2,000, the fourth-highest premium in the country. Forking over these thousands of dollars every year eats up a significant chunk of rental property owners' profit margins, making Miami a much less attractive metro for rental property investment.
Q1 2015 Miami Rental Market Update
The Q1 2015 Rental Ranking Report found that Miami is the eighth-best city in the Southeast for rental property investment and 35th-best nationwide out of the 75 markets it evaluated. House prices are booming in South Florida, and Miami and the surrounding Dade County are no exception. Prices climbed over 12 percent in Miami in the year ending in Q1 2015, the second-fastest price appreciation of home values in the country during that time. Miami's year-over-year job growth of 3.66 percent is also extremely impressive - the ninth-highest rate for that metric in the country. Rents have flattened out and, due to Miami's rapidly-rising home values, its rental housing cap rate must therefore fall. However, the Miami cap rate still remains at a respectable 6.95 percent, high enough for rental property investors to purchase homes, watch their prices increase and in theory get paid to wait! As a whole, the Miami real estate market is reasonably active, with homes for sale sitting on the market a median of 71 days prior to being sold. The median age of U.S. housing inventory is slightly lower, at 70 days.
What data is this Rental Ranking Report based on?
To calculate the statistics found in the Q2 2015 Rental Ranking Report, All Property Management gathered data, including the most recent government housing and jobs data, for 75 metros across the United States. Specifically, we looked at home vacancy, capitalization, home value appreciation and job growth rates, changes in rental prices, and the average number of days properties have been on the market to determine which U.S. metros will give investors the highest returns on rental investments. Click here to learn more about the Rental Ranking metrics.
Should I invest in Miami rental property?
Given how badly Miami was rocked by the 2007-2008 housing bubble burst, this is one of the best times in recent memory to invest in rental real estate in the Miami metropolitan area. Terrific home price momentum, strong job growth and an active real estate market suggest that there is healthy demand for rental units in Miami and that rental property owners can expect good rates of return there.
Thinking about renting out a property in Miami? Save time, avoid hassle and maximize your rental income by having a professional property management company operate your rental property for you. Click here to get a free quote from a local property manager or call 877-780-4510 to have the All Property Management staff get quotes for you.
All Property Management specializes in connecting rental property owners with professional property managers in communities across the United States. These property managers help set rental rates, advertise properties, screen and manage tenants, collect rent, manage vendor relationships and ensure compliance with local, state and federal housing regulations. They take the hassle and worry out of managing rental properties - all while maximizing rental property owners' rental incomes.