I’m ‘Going To Miami’ For Tenanted Property

The first things that spring to mind when most people think of Miami are Ferrari Testarossas and 24-hour parties, (if Will Smith’s Miami Lyrics are anything to go by). However there is an equally exciting side to this city for property investors.

The most exciting thing from my point of view at the moment is Miami tenanted property. You might have heard that the property market in the USA has taken something of a battering in recent years and you will have heard right.

It is no secret that Miami was also swept up in the sub-prime storm with its own sizeable share of foreclosed properties. However people would be surprised to hear that prices have been rising in this Florida city for the past 12 months and buyer activity too has been heating up.

This is particularly true in the apartment and condominium markets, which have overtaken single family homes in popularity with investors. This has helped fuel a Miami property market that hot record-breaking sales in 2011 – even beating the record set before 2005 during the height of the boom.

Data from the Miami Association of Realtors and Southeast Florida Multiple Listing Service show sales of single family homes and condominiums in Miami Dade County increased by a massive 46% on sales in 2010.

Within these figures Miami Condo sales outperformed single-family homes with an increase of 21% over the year before. It is just this type of Miami tenanted property that we are now particularly interested in from a cash flow point of view.

Buying and renting out Miami apartments or condos means that investors have a high probability of being able to more than cover the amount investors spend on their mortgage each month. The market is also flooded with incentives to attract investment from those with cash to invest.

The capital growth you can expect even in the short term should mean that you begin to see profits rolling in from day one.

Local property experts are predicting that strong tenant demand in Miami-Dade County will push down vacancy rates and allow property owners to raise rents. Rents have already risen by around 4% in the county in 2011 and are expected to rise again this year.

So Where Is All This Tenant Demand Coming From?

Firstly the availability of mortgages is restricted to only those with good credit ratings and sizeable deposits. This locks out the majority of would be home buyers who are forced to consider renting instead.

The number of tenants is also likely to receive a further boost from a local economy that is creating jobs in the tens of thousands each year. A total of 20,000 jobs were created in Miami in 2011 alone and the opening of two large casinos and other economic development initiatives will only increase tenant demand in the future, many people are starting to follow this guide to download the app where they practice their gambling strategies.

And the future is where this city firmly has its sights set, which is good news for property investors.

Miami was ranked ninth among the leading ‘North American cities of the future.’ The city also managed to achieve a top 10 ranking due to the large number of foreign direct investment projects that have occurred in the city over the past few years.

Miami was also ranked second for business friendliness and is the metropolitan area is now the 7th most populous centre in the US with an estimated population of 5.5 million people. As recently as 2009 UBS ranked Miami as the 5th richest city in the world based on purchasing power.

Therefore, as the reawakening of this city continues, a combination of low prices and strong and growing tenant demand are just some of the reasons why I think Miami is one of the best places in the world to invest for steady cash-flow and capital growth.

Have you invested in or are you considering investing in Miami property? Are there other US cities that might offer even better prospects for property investors? Please leave your comments below.

Kind regards

Brett Tudor
Property Expert

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