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Miami Real Estate Investing

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Silicon Valley and Hollywood are no longer the cultural and technical hubs of America and real estate investments are following suit. The south is becoming known as a center of commerce, not just great weather. Miami is one of the cities at the center of this shift. 

Why Invest in Miami?

So, why invest in Miami instead of some other international tourism hub? Let’s take a look at some of the unique advantages the city has for investors.

Population 

The Miami metro area is home to a population of 2,757,700 and a goods and services market of over $140 billion. Although Miami is known as a tourist and vacation town, properties spend 175 days on the market when sold. Landlords can expect an average rent of $2,317 per month ($3,590 per month for Airbnbs).

Miami is the second-largest city in Florida and is growing its population at an annual rate of 1.62%. Its population is growing older because there is less room for new people to move in. The immigration that initially built the city in the 1980s has slowed. The population density rose 2,069% in 10 years in downtown Miami and much of the development includes high-rise construction and multifamily units.

Jobs 

Although Miami is becoming denser by the year, its high-paying jobs keep people looking to base themselves in the city. Anesthesiology, the airline industry, tech and healthcare are growing industries that pay in proportion to the price of real estate in the area. As a result, the people who move to Miami tend to stay there.

The tourism industry services entry-level millennials with jobs that can provide a living for short-term residents. However, Miami is generally unforgiving to the 1099 lifestyle, leaving many of the contract workers in the entertainment, hospitality and media industries unable to form a stable lifestyle in the city. As a result, landlords may experience high turnover.

Prices

Miami is a premium market with an upwardly mobile core of residents. The city boasts some of the highest median home values in the country. The median property price in the city is $532,647, which translates to a price of $318 per square foot. The midmarket and millionaire market plays a central role in year-over-year increases in total home sales (a 15.6% rise).

If you can get in, there is a good chance for your investment to pay off quickly. Single-family home prices in Miami have gone up for 98 straight months. You have the benefit of relatively low conventional loan interest rates, which went down from 4.46% to 3.72% year over year. Miami remains a bargain if you compare it to international cities around the world. The city also lags in distressed sales — only around 6% of closings are distressed each month.

Miami Real Estate Market Forecast

Popular neighborhoods like Brickell are leading the charge in rental development. Brickell is expected to build another 4,062 units in 2022. The downtown area has added 6,300 new units since 2014. Places like Kendall and North Miami have surged in popularity because of their low entry-level rent and mortgage costs. Both areas are set to give back great returns for investors who move now. Many experts consider North Miami especially undervalued — it has enjoyed increases in average home value of 7.4% in recent years.

Despite growth in some areas, the overall forecast for Miami is pointing to a 2020 cooling-off period. The COVID crisis will likely exacerbate this trend, but maxed out home prices are curbing demand in some of the higher-end neighborhoods. The condo market suffers from a lack of access to funding in the entry-level market.

By 2040, the metro population of Miami will be above 7.5 million. Experts predict the population will have an older average age than most global cities.

Investing Passively in Miami

Investing in Miami real estate could involve real estate stocks or learning how to invest in REITs. You also relieve yourself of the fixed costs of active real estate investing: bank fees, property maintenance, comparison pricing and landlording.

Traditional investing in a crowded market can mean overpaying to get into the right neighborhood. Miami’s high learning curve and premium pricing make it a perfect market for group investing. Through a platform like DiversyFund, you can connect with other investors to pool your resources for bigger buys while automatically diversifying your portfolio. 

Best Passive Real Estate Investing Platforms

Check out our Diversyfund review and compare it with the passive real estate investing platforms below. Your investing style should match your personality and your platform should match your style.

Minimum Investment
$500
Fees
No management fees
Get started securely through Diversyfund’s website
Minimum Investment
$500
Fees
No management fees
1 Minute Review

DiversyFund isn’t your average crowdfunding platform. You’ll find that the company puts a twist on the traditional everyday crowdfunding platform, beyond anything you can find online with a simple Google search. You only have to look under DiversyFund’s skin one layer to surmise that DiversyFund is a conscientious developer and sponsor and helps hedge risk through improved vetting.

DiversyFund offers a multifamily real estate investment trust, the DiversyFund Growth REIT, and its main goals are to increase cash flow and resale value. It’ll automatically give you access to multi-million dollar real estate assets.

Best For
  • Those looking for an alternative investment beyond stocks and bonds
  • Individuals who aren’t sure they want to be landlords in the traditional sense
  • Investors who aren’t accredited
Pros
  • Only need to pony up $500 to get started
  • Open to investors all over the world
  • No expensive broker fees
Cons
  • You’ll only be able to access “blind pool” investments, which means that you can’t opt out of specific properties
  • There’s only one real investment option, the DiversyFund Growth REIT
Minimum Investment
$10,000
Fees
1% – 1.75%
Get started securely through CrowdStreet’s website
Minimum Investment
$10,000
Fees
1% – 1.75%
1 Minute Review

CrowdStreet is a commercial real estate investing platform where people can invest directly in commercial projects. Unlike a brokerage firm, CrowdStreet isn’t a middleman. Instead, the platform acts as a marketplace where investors can pick and choose the best deals for their time horizon and strategy.

Available investments range from family living spaces to office buildings to storage facilities and investors can sign up for a free membership. Your investment options are limited to what’s live on the Marketplace and you’ll need capital to build a diverse real estate portfolio. Only accredited investors can access deals through CrowdStreet.

Best For
  • Investors looking for diversification away from stocks
  • Real estate investors interested in new opportunities
  • Accredited investors with lots of capital at their disposal
Pros
  • Unique opportunities available
  • Makes real estate accessible and understandable
  • Investors can devote capital to both debt and equity offerings
  • Offers quality education materials and answers to FAQs
Cons
  • Real estate is highly illiquid
  • Most properties require a minimum $25,000 investment
  • You’re limited to what’s on the CrowdStreet Marketplace
Minimum Investment
$50,000 *Origin Investments is for Accredited Investors only
Fees
1.25% per year
Get started securely through Origin Investments’s website
Minimum Investment
$50,000 *Origin Investments is for Accredited Investors only
Fees
1.25% per year
1 Minute Review

Origin Investments is a real estate investment company that has leveraged technology to make investing in institutional-quality private real estate more accessible. Origin Investments places an emphasis on transparency, and fund information and documents are easy to find in their investor web portal. Getting started with Origin is equally as simple, though you’ll need to be an accredited investor to join.

Best For
  • Accredited investors
Pros
  • Your real estate investment is managed by experienced real estate fund managers who have executed more than $1 billion in transactions and resulted in 0 losses across 43 deals.
  • Origin has “boots on the ground” in their target investment markets, providing access to off-market deals
  • Origin principals have invested $56 million of personal capital alongside investors, to ensure alignment of interests.
  • Beginner-friendly platform is easy to operate
  • A personal Origin representative is provided to every investor for personalized customer service
Cons
  • Open to accredited investors only
Minimum Investment
$1,000
Fees
2% – 3%
Get started securely through stREITwise’s website
Minimum Investment
$1,000
Fees
2% – 3%
1 Minute Review

Looking to diversify your portfolio and get into real estate? A real estate investment trust (REIT) that owns income-producing real estate may be a great place for you to start. Streitwise is a REIT that specializes solely in commercial real estate and has a low entry investment requirement of $1,000. Based in Los Angeles, Streitwise was created in 2017 by three veteran real estate investors who were frustrated that there wasn’t a good option for unaccredited investors to get into the commercial real estate market.

Streitwise focuses on investing in low-risk rental commercial real estate aimed at providing clients with consistent high-yield returns. The team invests in markets that are steadily growing and offer low-risk potential outcomes. While they’re still young and growing, the founders have built their business based on solid experience coupled with a vision for the future of investing. If you’re looking to diversify your current investment portfolio but feared real estate was too lofty a goal, Streitwise is worth exploring.

Best For
  • Investors looking to diversify
  • Investors with less than $200k in annual income
  • Passive traders
Pros
  • Consistent quarterly dividends
  • Low, transparent fees
  • Low investment minimum
  • Convenient and easy to use
Cons
  • Young company
  • Projections are uncertain
  • Limited portfolio
  • Limited technology
Minimum Investment
$500
Fees
0.85% asset management fee per year
Get started securely through Fundrise’s website
Minimum Investment
$500
Fees
0.85% asset management fee per year
1 Minute Review

Fundrise, a real estate investment platform, allows small investors to gain exposure to a diversified portfolio of real estate projects hand-picked by the Fundrise team. Investors can choose between a starter plan and three advanced plans, all designed to meet certain investing goals. Each plan gives you an exposure to a specific portfolio which comes in a form of eREITs and eFunds, custom-made products which are not traded on security exchanges.

Best For
  • Small real estate investors
  • Passive investors
  • Long-term investors
  • Beginners
Pros
  • Allows small investors to get exposure to commercial real estate
  • Diversification in the real estate sector
  • Goal-oriented investing
  • Relatively low fees
  • 90-day guarantee
Cons
  • Liquidity issues as eREITs and eFunds are not exchange traded
Minimum Investment
$5,000
Fees
Between 8% and 10% of the purchase price
Get started securely through Roofstock’s website
Minimum Investment
$5,000
Fees
Between 8% and 10% of the purchase price
1 Minute Review

Roofstock is a registered real estate broker and marketplace specializing in single-family rental properties. Unlike its competitors, Roofstock isn’t selling shares of properties through trusts or LLCs — they’re connecting buyers and sellers directly. Roofstock properties are carefully vetted by a qualified home inspector and come with a rental income guarantee. That’s right, Roofstock will pay you rent even if your property stays vacant.

Financial data on each property is available even to those who are not clients and nonaccredited investors are welcome to join free of charge. Cash and financing options are available when making a purchase, but Roofstock will tack on their own fees in addition to closing costs.

As the solitary owner of your property, you’ll be expected to fund repairs out of your own pocket. Still, Roofstock is a great way to get a foot in the door of the real estate industry and their fees are much lower than most of the competition.

Best For
  • Nonaccredited investors
  • Real estate investors with limited capital
  • Investors looking for income through rental properties
Pros
  • Free to sign up
  • No investment minimum
  • Ownership of real assets
  • Low fees 30-day money back guarantee
Cons
  • Single-family homes only
  • Need to finance repairs yourself
  • Requires down payments

Getting in on a Closed Market

The traditional investor may see no opportunity in a high-end town like Miami. Buy-ins are expensive. There’s massive competition for the best properties. You may need to know someone to get the best deals — or risk falling behind. 

Modern real estate investing is a different animal. Savvy investors understand there is no need to limit yourself by proximity or budget. Work with other educated investors through the right platform to access large commercial properties or rents in exclusive neighborhoods. In previous business generations, passive investing might have been considered bad property management. Today, it’s a smart way to invest.

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