When you hear that more rentals are coming to Miami-Dade, you could view it as a blessing or as a curse depending on your situation. For those who have rental properties in the area currently, and who have seen low vacancy rates and steadily increasing rent, you might see it as trouble. With more rentals available, it means renters will have more choices, and it typically means that the prices will go stagnant or that they will drop a bit.
More Vacancies Could be Available
In 2016, the vacancy rents for multifamily properties have been low – only about 2.3%. However, with the massive influx of properties to the market by the end of 2016 and throughout 2017, it is easy to see that things are changing. This year alone, there will be about 9,000 new rental properties, and over the course of the next two years, they say there will be about 11,000 more. Not all of those will end up as rentals, but quite a few of them will, and this means there could be an oversupply of apartments in the area.
This is the largest increase in units available since 1999 – more than 17 years ago. With the addition of these new rental units, it means the renters in the area will have more choice in where they rent, and even if there is growth in the rental market, there should still be plenty of places to rent. What this means for the current rental prices is anyone’s guess right now. The average rent is currently $1,315 per month, and it might stay that way instead of continuing to rise. Some areas might even see falling rents. This has already been reported in South Beach and Downtown Miami.
For the Renters
Of course, if you are a renter rather than an investor trying to rent out a property, this is likely some very good news for you. It means you will have more choices in where you and your family choose to live, and you may even be able to locate some very nice places with very reasonable rents. Over the course of the next year or so, as the number of units on the market start to go up, you can expect to find more rental properties available.
How Long Will It Last?
It’s difficult to tell how long the surplus of rental units will last. It all depends on the number of people who come to the area and need a place to live, naturally. This doesn’t necessarily mean that getting into the rental business now is a bad idea though. It simply means you need to have a solid strategy in place when you are buying to make sure you are not overextending and buying a unit that won’t be able to pay for itself in the rent you charge. Be more particular when you are choosing properties, buy in good and popular areas, and you should be fine.