By Sunny Isles Real Estate Expert on October 22nd, 2011
As a professional real estate broker in Miami
I have to deal with clients who are interested in renting and since Miami is a seasonal resort town, there are always people interested in renting short and long term. This is especially true this year as the number of people interested in renting an apartment in Miami have doubled.
Great article was published today in Miami Herald. You can read it below or click the link to read it at Miami Herald: http://www.miamiherald.com/2011/10/21/2464773_p2/south-florida-rents-rise-as-international.html
With continued investment fueled largely by foreign buyers, demand for Miami apartments is growing, meaning increasing residential rents, according to the Miami Herald. “I talk to a couple of investors all over South America and they tell me they buy Miami condos and it takes them about a week to rent them. “Each and every month, the rents are going up.” According to data from the Texas-based MPF Research, rent prices have gone up by between 3 and 7 percent this year. And with a steady stream of foreclosures on the way, the rental trend is likely here to stay.
With occupancy rates in Miami as well as South Florida above 95 percent and the rent prices risen between 3 and 7 percent, at least 160,000 homeowners either in foreclosure or so far behind on payments that an eventual foreclosure appears inevitable, the region’s rental market is likely to see growing ranks of new renters for the foreseeable future. As a result, more so-called “vulture investors” will seek hefty profits by buying up distressed property and converting them to rentals.
“We bought a two-bedroom in Kendall in May for $50,000. We invested $10,000 in repairs, and then rented the unit for $1,200 [a month],” Leon de Vega, a South American real estate investor. “We just closed the sale of the unit for $95,000.”
In addition to the rising Miami rentals market, international investors are drawn to South Florida real estate because the U.S. offers greater legal protection for foreign land owners than many other countries, and because some homeownership can make it easier to obtain a U.S. visa.
Growing investor appetite is driving sales for Miami luxury condos and waterfront single-family homes in Miami back to the boom time levels of 2005 and 2006. In Miami-Dade County, for example, total sales are expected to reach 29,000 this year, more than 2005’s total.
Despite the recent value declines homeowners have experienced during the recession, homeownership has proved a smart investment over the last several decades, with home values rising about 5.4 percent annually on average. The growing crop of renters is not able to benefit from that investment.
Additionally, the idea of saving money as a renter so that you can put together a down payment in the future is not viable for many cash-strapped South Floridians trapped between high rental rates and low wages.