I get calls probably once a week from people interested in investing in Airbnb In Miami.
They have often recently visited Miami, already own Airbnbs or short-term rentals elsewhere, know someone who owns one, or a combination of some of these things.
The huge problem is that holding a short-term rental property in Miami or South Florida is much different from almost anywhere in the world.
And if you are not particularly careful, you can get fines in amounts that can quickly add up to the cost of some of the properties!
This article will share with you the things that should not be done and the things you need to do to make money from investing in short term rentals (also known as Airbnbs or VRBOs In Miami.
Creating wealth on Airbnbs, as mentioned earlier, is extremely complicated, and you can be fined, in some cases, $ 5,000 per day for each offense.
Many people think that if they are just looking for Airbnb or VRBO rental sites available or previously rented short term on their sites, these areas are suitable for buildings or communities that they can purchase for rent.
Do not Do It!
Unfortunately, quite a few people rent out properties that are not allowed for short-term rent on Airbnb and VRBO.
In case you are reading this and keep watching VRBO and have no idea what it means, it is an abbreviation of Vacation Rentals By Owner.
This is an Airbnb site that is part of the Expedia Group.
The first step is to figure out what your budget is. If you pay in cash, it's pretty easy to determine.
If you are financing, you need to go to your lender and determine why you are eligible.
The loan plans available for investment properties are much different from those available for end-user homes.
The funding available to Airbnbs usually requires much more than some primary residency lending programs that can be zero percent or three and a half percent down payment.
Typically, investment properties require at least twenty percent for American investors, and even more for foreign investors.
If you need recommendations for a loan for Airbnb assets, Feel free to contact our lending company.
Once you understand what you are entitled to, step number two will be to think about some important issues regarding the assets you would like to use as Airbnb.
Make sure the properties are in an area that exceeds its value.
Ideally, you want this property to be a profitable short-term investment and a profitable long-term investment, if possible.
Find out how many properties are selling in this area and if prices are going up or down.
You can go to Zillow, Realtor.com, Redfin, or call a real estate agent to get the answers.
The next thing to think about is imagining if you were the Airbnb customer staying in this area that you are thinking of investing in.
Would you be comfortable going to the grocery store, getting to restaurants, or having easy access to other fun things to do?
These are the things that people think about before they place their Airbnb bookings.
Do your best to find a property close to the things that people will be interested in.
Once you understand if this is an area where you want your Airbnb, the next step is to go to the Airbnb site or the VRBO site and check and see which properties are rented for the night in that area.
Knowing what kind of annual income you can get is essential to see if you should invest in this property or not.
Our team knows experts who know more about short-term rental management than anyone we have ever met.
Although we are not affiliated with it in any way, we rely on its discretion regarding the type of income these assets can bring.
If you give him the area or address, he can basically figure out what will allow you to get a net per day, what the vacancy rates will be, and what the annual rent will likely amount to.
The next step is to travel near these areas.
If you live out of town, you can do a few things.
You can go into Google Earth and check out the house, the surrounding areas and try your best to get a sense of the area.
I also recommend using Google Street View to get an even better idea of the area.
If you have a friend / family member who lives there, ask him to drive near the area and ask him to do FaceTime for you or make a video of the area and the property.
If you do not know someone who lives there, contact a real estate agent and ask him to do so.
The next thing is negotiation.
We are now in a difficult market for buyers due to the extreme shortage of stock
Chances are that in any property you choose, you will probably have to pay the asking price or above the asking price.
If this is something you feel uncomfortable with, then maybe this is not the market for you.
Since this is a long-term investment for many, paying a little extra now, it probably makes sense that you could start creating wealth from your Airbnb.
For those who want to hold their investment in Airbnb only for a short time, you may be waiting for a more balanced market.
Otherwise, you may be in a bad financial situation in the future.
I wrote an article about the 5 top mistakes buyers make in Miami in 2021.
There are many different ways that people negotiate.
The problem is that most people negotiate the same way, no matter who they negotiate with.
One of the things our team learned a few years ago is that there is a much better way to negotiate using artificial intelligence (AI).
Imagine the best negotiator in the world who will guide you with advice on which words to use, which words not to use, absolute best practices, depending on whether you are negotiating in person, by email or by phone.
Whenever there is a strategy and game plan specifically designed for the person you are negotiating with.
We have saved our clients hundreds of thousands of dollars through these studies and the strategies learned.
The final step is to make sure you find a great testing company that will thoroughly test your future Airbnb property.
There are many great companies in Miami that our team can recommend to you.
Also, be sure to ask friends, family and co-workers about their recommendations.
Checking reviews on Google is something you should do as well.
There are often real estate investors in Miami or many other areas of the country who purchase properties, renovate them to look good, and then sell them as a flip. The problem is that many of them do poor work.
Of course, an appealing looking property will help you rent your Airbnb, but many people who use short-term rentals will treat your place as a rental car rather than their own.
So you need to make sure that the property is in very good condition.
Chances are the property will go through a lot of wear and tear in a short period of time.
It is okay to buy a property that is not in perfect condition but make sure that your expectations are consistent and that you have received a fair price for it.
These are the basic steps for buying Airbnb in Miami, but there is more to know other than that.
Up to this point, many best practices for purchasing Airbnb in Miami have been mentioned.
But, there are also a lot of things not to do when investing in short-term rentals in South Florida, especially in Miami Beach.
Investing in Airbnb is different in South Florida compared to most other places in the world.
In Florida, the industry that makes the most money is tourism.
Thus, the hotel industry is extremely powerful in politics and has a significant impact on short-term rental rules.
Their lobbyists are constantly trying to get rid of short-term rentals, especially apartments.
They feel it will adversely affect the revenue they bring.
Although some of the buildings allow apartments for Airbnb, I highly recommend not unless the building is pre-defined as having an Airbnb license.
I'm sure you'll see a lot of videos and other things on the internet that give a list of apartments that are suitable for short term rent.
The problem is that things can change at any time in the future because hotel industry lobbyists are pushing so hard to make it more and more challenging.
There is a possibility that in the future, a politician with strong ties to this industry will make it more challenging by taxation or stricter guidelines.
Honestly, losing sleep because of a personal investment for me is not something I am interested in doing.
If you're okay with that, you'll have more options.
I highly recommend purchasing only ground-level homes for Airbnb or pre-rented apartments for Airbnb that have been pre-built for that purpose.
A number of municipal properties may work if they do not have committee taxes - HOA - that are strict on rental permits, but are very difficult to find.
Some with HOA (Home Owners Association) will currently work as well, but there is always a chance that board members will be replaced by the association, and they will not allow them more short term rentals unless the building or property is pre-defined as such.
However, I would not recommend a single-family home in Miami or Miami Beach that is in the community with the HOA Association.
The same thing might happen here.
Bottom line Investing in Airbnb in Miami is complicated.
The best advice I can give you is to do your research.
If you would like our team to help you with your research and make the process much easier, Feel free to contact us.