As we round out the first quarter of 2023, we can see our predictions of the 2023 Miami rental market coming to fruition. That’s right, Miami’s rental market is incredibly competitive. The only market even slightly more competitive is North Jersey. This is all laid out in a new study undertaken by RentCafe.com.
The study measures occupancy/vacancy rates, the number of days rental units stay on the market, how many tenants opt to renew their leases and the number of new apartments that are delivered to the marketplace. Miami landlords are enjoying vacancy rates of less than 3% and over 70% of existing tenants are opting to renew their rental contracts.
The low vacancy rate and high rate of tenant renewal is a huge draw for landlords, as apartment turnovers are not inexpensive. You have to take into account the physical turnover, moving the previous tenant out, arranging for the security deposit reimbursement, repair of any damage or wear and tear, marketing costs of seeking a new tenant and the time and energy it takes to qualify the new tenant/arrange their move-in. It isn’t the end of the world, but it is not free and cuts into the return on investment of the property.
In Miami today, rental apartments tend to stay vacant for an average of 33 days while this turnover is undertaken. This is far lower than it has been in previous years, even in seemingly strong markets, but is still a month of your investment not earning a return and instead incurring costs.
Our current market is prime for welcoming new landlords. Inventory is tight, but not as dramatic as it was in the post-COVID market. New buildings are coming to market frequently and despite most of the US real estate markets teetering on recession, the demand remains strong in Miami. Jobs are still plentiful, the tax climate is more favorable than other markets, financing is possible and why wouldn’t people want to live in Miami? If you have considered a safer place to invest your savings over the more volatile crypto market or stocks, Miami is the market to bet on.
If you are a tenant in the Miami market, we are sorry to say that you have your work cut out for you. The RentCafe.com report shows that for each available rental unit, there are 20 prospective tenants jockeying for the keys. This does take into consideration the wealth of new rental buildings delivered to our marketplace as well as units that are overpriced. Even with those less-than-desirable options, there are more tenants in line here than anywhere else in the United States by a good stretch. The second closest market was San Diego, with 13 hopeful renters per available dwelling.
In order to experience success in a market like this, it is imperative to have all of your ducks in a row. Having a good credit rating and no criminal background is an obvious piece of advice, but you also should come equipped with letters of recommendation, documented income and have strong representation. Utilize the skills of a real estate agent who is proficient in the marketplace and can guide you to the front of the line where possible, but who will also level with you on routes that are not the easiest.
How To Get Help
The Light Group is well-equipped to assist both prospective tenants and new landlords. We were recently honored as one of the top teams at Douglas Elliman for securing rental units for our clients throughout all markets that Elliman is present in. We pride ourselves on efficiency and ease of service, almost like a concierge approach to finding a new place to live. We understand that moving is stressful, even more so in an uber-competitive environment and we strive to make it as seamless as possible for our clients.
If you are looking to invest funds into the rental market, we will be able to guide you to the areas and buildings that will offer an abundance of high quality tenants and lower fees. This would include more reasonable HOA’s, high quality builds that require less upkeep and tenants who do not move around as frequently. We love to see our investors make the most of their dollars that are at play in Miami.
To speak more specifically about an investment or if you need/wish to move, please contact Michael Light, Broker and Executive Director of Luxury Sales at Douglas Elliman. You may reach Michael directly at (786) 566-1700 or via email at firstname.lastname@example.org. We would be honored to assist you.