How to make money by investing in condos in Miami

What Condos are?

The word condo was coined from the word condominium. It is an individually acquired residential unit in a building or complex comprised of other residential units. Condo proprietors share a common space and often pay association fees to maintain the common space, amenities, and other shared resources.

What you need to know about Condos Miami Investment

Condos Miami Investments is a full-service real estate team led by top-producing realtors all around Miami. The team services the needs of buyers, sellers, renters, and landlords. The agents on the Miami Condo Investments Team have their real estate licenses hung with Luxe Living Realty – a boutique luxury real estate brokerage located in Miami Beach with over $1 billion in luxury real estate sales within the past three years. The Miami Condo Investments team prides itself on its extensive experience, comprehensive market knowledge, quick response time, and exceptional service every step of the way.

The month-to-month growth mirrors a year-over-year jump in condo sales prices. Miami-Dade experienced a 27% rise in condo prices to $360,000 in January 2022 from $280,000 in January 2021. Prices rose by 15% in Broward, to $240,000 in January from $209,000 a year ago

Making Money from Miami Condos

The Rent population is very high. This is because Miami is one of the larger cities in the nation in terms of Population. According to NeighborhoodScout, close to 71% of residents live in a Miami rented apartment. You will find that there is high demand for Properties.

Millions Visit Miami Every year

Tourism is one of the top industries in Miami. Millions of tourists visit the city on a regular basis. This makes your investment in Condo yield a higher return as a tourist attraction in the city is not seasonal, but rather all year round.

You can choose to let out your property either via the traditional means of renting or through AirBnB(though it is highly regulated)

Below are the six factors which comprise the Miami Condo Rankings along with a quick explanation for each:

1. Location –

 This ranking score answers questions such as: How safe is the location? How walkable is the neighborhood? Is there public transportation? Are there green spaces / public parks in the area? A ranking score of 10 signifies a safe and highly walkable neighborhood.

2. Views –

When trying to decide whether or not to consider a particular condo development, buyers and renters often wonder what the views are like from within its units. This ranking factor provides insight by quantifying the answer based on the average views in the condo development. And since most buyers prefer a property with a water view, those which offer direct, unobstructed water views rank the highest (10) in this category.

3. Quality –

To some, quality is single-handedly the most important criterion when deciding on a place to live. This ranking score answers the question, “How luxurious is this condo development?”. In deriving each score, the level and quality of services and amenities were taken into account, with a ranking score of 10 being the best.

4. Waterfront? –

There are many different types of waterfronts (oceanfront, bayfront, riverfront, Intracoastal front, etc.). This ranking factor puts a score on each one, with oceanfront being the most coveted and scoring a 10! Condo developments that are landlocked (i.e. non-waterfront) score a 5 in this category.

5. Age –

 This ranking factor was recently added to better mimic actual demand and buyer behavior in the marketplace. Before its inclusion, older condo developments were ranking too high compared to newer condo developments, something which was not perceived in the marketplace. Due to progressions made in design and architecture along with changes in consumer tastes, this is something that should be expected and accounted for in most cases. 30 years ago, for example, most condo developments delivered units with 8 to 8 1/2 foot high ceilings. These days, 11 to 12 foot high ceilings are becoming the norm.

6. Risk Adjustment –

 Ranging from mild to severe, every condo development has risks that are associated with it. A condo development that has one or more of the following may spell trouble: a high number of distressed properties, pending special assessments, an overabundance of properties currently on the market, a construction defect, high investor concentration, or pending litigation. Here, a high-risk adjustment invests a good thing, with a 0 being the safest.

Why invest in condos in Miami?

Vacation Property

Miami is one of the top U.S. cities for investing in Airbnb because of its huge tourism and hospitality industry. Whether it's a single-family home or a condo, buying a house in Miami and using it as a second home or vacation rental property could be a good return on investment.

A better return on investment: Miami Condos

Real estate markets are always shifting. While the Miami condo market is more volatile, which presents both risks as well as opportunities, the single-family home market is seeing a more steady upward trend. In both markets, you can get great investments if you have the right information and guidance.

Upkeep and Maintenance

●         Owning a condo is less of a hassle than owning a home. A condo doesn’t have a yard, a roof, or a pool to maintain and is generally seen as a low-maintenance investment.

Condo Lifestyle

●          Many Miami condos offer a lavish lifestyle with great services and amenities. This adds to the value of your condo and this can be a great selling point when renting a unit.

 

What you need to know about condos prices in Miami

The month-to-month growth mirrors a year-over-year jump in condo sales prices. 

Miami-Dade experienced a 27% rise in condo prices to $360,000 in January 2022 from $280,000 in January 2021. 

Prices rose by 15% in Broward, to $240,000 in January from $209,000 a year ago.

 

The Miami real estate market continues to break records due to pent-up demand and low mortgage rates which continue to fuel real estate transactions.

It is also because more people and businesses in the United States are relocating to South Florida from high-tax, high-density areas (no income tax, pro-business). 

Miami-Dade County real estate posted its best December sales month in history as it ended its historic 2021 with myriad year-end records including the most all-time annual total home sales, highest annual total dollar volume, most single-family home sales, most condo transactions, and more, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.

 

Miami's hot housing market, fueled by domestic and international homebuyers, ended 2021 with 39,394 existing total home sales, up 49.5% from the 26,345 transactions in 2020 and 31.1 percent from the previous annual record of 30,041 transactions in 2013. Miami's dollar volume of sales will reach $30.3 billion in 2021, a 103.4 percent annual increase.

 

Total home sales in Miami-Dade County increased 14.8% year over year in December 2021, from 2,990 to 3,433. 

While single-family home sales in Miami decreased by 1.2 percent, from 1,372 to 1,356, existing condo sales increased by 28.4 percent, from 1,618 to 2,077. This is the 15th consecutive month of condo gains in the double digits year over year.

Miami single-family homes priced between $400K to $600K increased 25.6% year-over-year to 535 transactions in December 2021. Miami's existing condo sales priced between $400K to $600K doubled, increasing 101.7% to 359 transactions. 

In December 2021, the inventory of single-family homes decreased 30% year over year, from 3,659 active listings last year to 2,563 last month. Condominium inventory decreased 50.1 percent year over year to 6,434 listings in 2020, down from 12,898 listings in 2019.

 

Months' supply of inventory has decreased for single-family homes since July 2019, indicating continued strong demand. 

Months' supply of single-family home inventory decreased 39.4 percent to two months, indicating a seller's market. 

Existing condominium inventory fell 72% to 3.3 months, indicating a seller's market. A market that is balanced between buyers and sellers offers a supply of between six and nine months. 

This is the historical statewide benchmark for the monthly supply inventory available for sale.

 

According to Realtor.com, in December 2021, the median listing home price in Miami-Dade County, FL was $465K, trending up 12% year-over-year. 

The median listing home price per square foot was $345. The median home sold price was $440K. 

Homes in Miami, FL sold for 2.03% below the asking price on average. The sale-to-List Price Ratio was 97.97%. Ideally, a buyer would prefer a sale to ask price ratio that’s closer to 90% while a seller would always prefer scenarios that can yield a ratio of 100% or higher.

 

Is Miami a Good Place To Invest?

Successfully investing in real estate — whether you are in Miami or anywhere else in the world — is all about correctly timing the market. Knowing when to enter the real estate market can often be a bit of a challenge.

 

Miami is a fairly walkable city in Miami-Dade County. Miami hits most people’s radar as a tourist destination, though it periodically hits the news when it looks like it may be hit by a hurricane. However, Miami is a large, thriving city with a strong housing market. Miami is home to just under half a million people. However, the Miami housing market is far larger than that – it includes much of southeast Florida and more than five million people. That makes the Miami real estate market the seventh-largest in the U.S., and it is the second-largest housing market in the southeastern U.S. However, that isn’t reason enough to consider investing in the Miami real estate market.

 

Before the coronavirus pandemic went global, there was talk about Miami being overpriced. On the flip side, there was an over-supply of condos, since they were aimed at snowbirds and tourists. When all the tourists are gone, demand for hotels and tourist destinations collapsed. And many of the tourism-related jobs dried up with it, too.

 

Economic uncertainty has had a chilling effect on the Miami housing market, too. The market has bounced back and is currently red-hot. The demand for South Florida real estate is evident in the median time to contact. Miami single-family homes are selling in 19 days, faster than a year ago (23 days).

Where To Buy Miami Investment Properties?

In any real estate investment, investment, cash flow is gold. The Miami real estate market offers diverse opportunities to real estate investors, allowing you to choose which rental markets you want to cater to and profit from. Good cash flow from Miami investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt.

 

Therefore, finding the best investment property in Miami in a growing neighbourhood would be key to your success. As with any real estate purchase, act wisely. Evaluate the specifics of the Miami real estate market at the time you intend to purchase. When looking for the best real estate investments in Miami, you should focus on neighbourhoods with relatively high population density and employment growth. Both of them translate into high demand for housing.

 

There are 47 neighbourhoods in Miami. Popular neighbourhoods in Miami include Brickell, Kendall, Aventura, Downtown Miami, Little Haiti, Mid Beach, Edgewater, Downtown, Coconut Grove, Brickell, Wynwood, Miami Springs, and South Point, Miami Shores, Hialeah, El Portal, Santa Clara, and South Beach. 

Below are ten neighbourhoods in Miami having the highest real estate appreciation rates since 2000—Listed by Neigborhoodscout.

1. Miami Dade College / Biscayne Blvd
2. NW 2nd Ave / NW 24th St
3. City Center
4. E Flagler St / NE 2nd Ave
5. SE 2nd Ave / SE 1st St
6. NW 7th Ave / NW 17th St
7. N Miami Ave / NE 14th St
8. S Miami Ave / SW 1st St
9. N Miami Ave / NW 36th St
10. NE 8th Ave / NE 151st St