As we all know, the South Florida real estate market has been quite active for the past 5 to 7 years and
Miami condos have been flooding the market. New and pre-construction developments have been popping up all over the county. Even now, over 22,000 units are under construction set to be delivered over the next few years. Many of these developments will have good timing and be ready as the market climbs out of the down turn. Until that time happens though, homeowners and condo investors who had planned to make a quick profit have been trying to figure out what to do. With so much new inventory on the market, owners are having a rough time trying to reduce their own inventory. Some investors purchased 10 or more units in the pre-construction phases of development and are now stuck with mortgages, taxes, and HOA’s. Some of the costs have to be covered in the mean time!
Obviously, the next step for most people is to convert the condo into an income producing asset rather than an endless expense. The rental market in
South Florida has drastically increased in the past few years because if this. People are trying to at least cover their taxes and HOA costs if nothing else. Condo
Miami would rather be upside down a few hundred dollars per month rather than a few thousand.
Renting though can be tough too. In markets like
Miami it is all about who you as an owner are marketing to.
Miami is a huge vacation city so why not take advantage of all the pleasure travelers, Spring Breakers, and business travelers. Some investors/owners of condos in
Miami can rent their homes on the beach and completely cover their costs a few months out of the year which certainly helps! Owners can undercut nearby hotel prices by a few hundred dollars per night and still cover most of the mortgage during the Spring and Summer months.
Another great advantage to renting a condo is the size of the units. These are homes and have full kitchens, washers and dryers, and most of the amenities that hotels now have.
Miami condo developers are building projects that create a full live, work, and play environment and offer spa amenities, pools, concierge services, 24 hour valet, and more. With all that to offer at a lower price, why stay in a hotel?
Of course many condo buildings prohibit short-term renting but there are ways to negotiate around this. Short term renting is usually considered anything rented for 6 months out of the year or less. This of course is very hard to monitor and enforce as is the rental income for homeowners.
All in all, renting in these markets is proving to be a good alternative for the owners who can’t sell. Who knows, maybe as the market takes a turn for the better and values start climbing again, the owners will be thankful they didn’t sell. A little unanswered prayer sometimes goes a long way.