Miami Real Estate Investing

Contributor, Benzinga

Real Estate Offering Update: CityVest Has Launched Catalyst Access Fund With 20%-25% Target Annual Returns (Accredited Investors Only).

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.

get started securely through CityVest’s website
Disclosure: Must be accredited investing a minimum of $25,000.
Fees
0.75%
Minimum Investment
$25,000
1 Minute Review

CityVest is a web-based real estate investment platform that was established to give small-to-medium-sized investors access to real estate investment opportunities that typically require 6-figure minimum investments. CityVest does this by pooling multiple investor contributions into 1 bundle large enough to satisfy the minimum investment requirements of the best institutional private equity real estate investment funds.

Best For
  • Individual investors seeking access to institutional investments
  • Experienced investors looking to diversify their portfolio
  • Investors seeking investments with strong due diligence and screening
Pros
  • Access to high-performance institutional funds
  • High returns
  • Intense vetting of investment opportunities
  • Third-party due diligence on all funds
  • No registration needed to review investment opportunities
  • Quarterly distributions
Cons
  • Only available to accredited investors
  • Not a lot of investor control of fund options
Get started securely through Streitwise’s website
Fees
2% – 3%
Minimum Investment
$5,000
1 Minute Review

Streitwise is a unique online real estate investing platform that was designed to give investors, both big and small, an equal opportunity to invest in real estate. At its core, Streitwise is a real estate investment trust, but it’s one of the few online real estate investing platforms that is available to non-accredited investors.

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
  • Limited offerings
Get Started securely through Arrived Homes’s website
Fees
1% asset management fee
Minimum Investment
$100
1 Minute Review

Arrived Homes is a real estate investment platform that focuses on building wealth through investing in rental properties. While most real estate platforms and REITs focus on commercial properties, Arrived Homes focuses on single-family homes as its source of rental income.

This focus on smaller properties allows Arrived Homes to sell ownership shares on individual properties to non-accredited investors with buy-ins as low as $100. Learn more about Arrived Homes with Benzinga’s review.

Best For
  • Small- to medium-sized investors
  • Investors interested in rental income
  • Investors looking to diversify
Pros
  • Buy-ins as low as $100
  • Open to non-accredited investors
  • Offers ownership shares in real property (and all the tax benefits)
  • Multiple ways to earn dividends (rental income and property appreciation)
  • Great way to diversify portfolio
  • Open to self-directed individual retirement accounts (IRAs)
Cons
  • Long hold periods
  • No secondary market to liquidate shares
Get started securely through CrowdStreet’s website
Fees
1% – 1.75%
Minimum Investment
$25,000
1 Minute Review

Crowdstreet is an online real estate investment platform that lets investors choose from a wide range of real estate investment offerings to crowdfund. Crowdstreet investors are free to buy into managed funds, individual buildings or even build a bespoke investment portfolio that includes both kinds of deals.

CrowdStreet’s platform has a diverse range of property types, ranging from multifamily to office, industrial, self-storage and others.

 

Best For
  • Accredited investors
  • Long-term investors
  • Investors looking to diversify from stocks
Pros
  • User-friendly interface
  • Diverse investment offerings
  • Great investor resources
  • Proven performance history
  • Many offerings eligible for inclusion in self-directed IRA
Cons
  • Accredited investors only
  • Most offerings require a $25,000 minimum investment
Get started securely through Yieldstreet’s website
Fees
average 1-2%
Minimum Investment
$500
1 Minute Review

Yieldstreet is an online investment platform that specializes in alternative investment offerings designed to generate passive income and wealth for investors. The platform offers a 1-stop shop for a range of alternative investments ranging from real estate to structured notes and even art collections.

Best For
  • Accredited investors looking to diversify
  • Alternative investments to stocks and bonds
  • Investors looking for passive income
Pros
  • Easy-to-use platform
  • Carefully selected offerings
  • Excellent mobile app
  • Full spectrum of alternative offerings
  • Options for non-accredited investors
Cons
  • Majority of investments only open to accredited investors

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.

Accelerate Your Wealth

Arrived Homes allows retail investors to buy shares of individual rental properties for as little as $100. Arrived Homes acquires properties in some of the fastest-growing rental markets in the country, then sells shares to individual investors who simply collect passive income while waiting for the property to appreciate in value over 5 to 7 years. When the time is right, Arrived Homes sells the property so investors can cash in on the equity they've gained over time. Offerings are available to non-accredited investors. Sign up for an account on Arrived Homes to browse available properties and add real estate to your portfolio today.