Investment, Property

Miami Housing Rental Property Real Estate Market: 4 Things To Look For Before Your First Investment


Whether buying a place so you can rent it or renting out your own property, it's important to look for the return of investment. Renting out your property in Miami is an excellent real estate investment but before starting a rental property, look for the following things written above. It will help you understand what’s vital to make your investment worthwhile.

Miami offers a lot of rental properties since Miami vacation rentals are popular year-round.

However, various factors can affect your rental income like homes near the water, beach access, and ocean views. Homes near water or have beach access are most preferred by vacationers as they are after the view or the beach itself.

When you have a rental with beach access, you are more likely to attract more renters which can give you huge earnings monthly. Therefore, you'll surely earn from having a rental property with such features.

Here are some of the things you need to look for before investing in its rental property:

1. Purpose of Investment

The first thing you need to look at is your purpose. It's vital to have a clear goal of why you want to enter rental property investing. Without a clear purpose, you can end up distressed. Real estate has low liquidity which requires a high-value investment that can result in financial constraints. To have a clear understanding of real estate, visit https://www.bestrealestatedirectory.com/ for thorough coaching.

Moreover, here are the following purpose that you can look for according to your needs:

  • Buy and lease - a long term value appreciation, and it can give a regular income. However, to get the best rental income, landlordship is a must.
  • Buy and self-use - it saves you from renting and increases value appreciation over time
  • Buy and sell long term - highest value appreciation and can help in retirement plans or child's education
  • Buy and sell short term - smallest value appreciation as selling is quickly done when market value increases

2. Location of the Property

When you buy a rental, you will be stuck in that place unless you sell it. The location of your rental also determines access to amenities such as water, internet or electricity, transportation, and other public services. Some renters prefer rentals near transportation services while others choose closeby shops, tourist attractions, and public services.

For instance, Miami is considered the most overvalued neighborhood for four straight years. The reason behind it is due to its luxury and non-luxury features. Having a place in Miami offers a walk from your house to shops, museums, restaurants and others. On the other hand, Miami waterfront properties can be at risk depending on its location and elevation. Here are risks of some waterfront houses that can decrease the value of your rental:

  • Homes on the beach have a higher danger of being flooded as Miami is prone to flooding and storm surge.
  • Beachfront properties with a foundation built underwater, structural damage is high.
  • Flood-prone areas demand higher maintenance costs and insurance that decreases return of investment.

3. Valuation of the Property

Real estate valuation affects its financing during purchase, investment analysis, insurance, sales price, and taxation. The value of the property can either give you a high or low price. To determine the value of a property, future benefits such as the rising of hospitals, malls, schools, etc. are considered.

Moreover,  you can look into the economic trend that influences its value. For instance, millennials in Miami prefer renting rather than buying homes yet. This trend can be an advantage when you own rental property as it means more people are willing to rent. When there are more renters, you will likely earn more from it. Therefore, you should look for properties with the most valuation so you can gain from it when market increases.

To assess your potential rental property, here are some common valuation methodologies you can use:

  • Sales comparison approach - compare recent sales of properties with similar features such as family rental that has two-bedroom may have a different listing price
  • Cost approach - best for newly built properties which is a summation less its depreciation
  • Income approach - fits for rental properties which are based on the anticipated income

4. New Construction or Existing Property

In Miami, the rise of properties being built increases due to the high demand for rentals as more millennials want renting out than buying a home. When you choose to buy new constructions, it gives you a chance to customize and title it personally. However, the risks include the delay in construction, increase of materials and expenses.

On the other hand, buying existing properties can give you problems with its title and no options for customization. As opposed to new constructions, existing properties has no risk in dealing with the construction company. Moreover, you also need to look for these things when buying existing establishments:

  • Check the quality of items included in the property such as its furniture, facilities or equipment if there are, or fixtures
  • Look into the monthly maintenance costs, taxes, or dues from previous owners as it can lessen your cash flow
  • Check property deeds, appraisal report, and the recent survey of the rental.

Conclusion:

Whether buying a place so you can rent it or renting out your own property, it's important to look

for the return of investment. Renting out your property in Miami is an excellent real estate

investment but before starting a rental property, look for the following things written above. It

will help you understand what’s vital to make your investment worthwhile.

 

 

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Miami Housing Rental Property Real Estate Market: 4 Things To Look For Before Your First Investment