Investment Opportunities in the Miami Hotel Markets
The South Florida economy is booming, which is good news for the hospitality sector. The greater Miami area, for instance, has become more resilient, with both short-term hotels and beach resorts reporting high demands. Now that everyone is looking for an excellent place to put some money, Miami has become a hotspot for many investors - and you can benefit from the same. If you are looking for passive income in a booming economy, Miami is a great investment place. Here's a detailed guide on investing in the Miami hotel markets.
An Overview of the Miami Hotel Market
Miami has become a significant tourist destination globally known for its near-perfect weather, beautiful beaches, and diverse culture. The Miami hotel market is also strong and healthy. The real estate appreciation rate has been high (22.64%) for the last decade.
While a Florida International University report suggests Miami hotels face a 3 billion economic hit due to the pandemic, traffic in the Miami international airport has risen, implying high growth in the hospitality industry. Also, hotels in Miami have reported a high occupancy rate - 80 to 90%, which is higher than the city's average occupancy of 54%. Now that the rate of vaccinations has risen and there are no more lockdowns, we can expect more people in Miami, and this is an excellent boost to Miami's real estate economy.
Why Invest in Miami Hotel Market
Miami is a busy city. It has beautiful beaches which attract lots of tourists every year. It is also a preferred destination for business meetings. Everyone coming to Miami needs a place to stay, whether short or long term. From families on vacation to newlyweds on romantic getaways, the demand for hotels in Miami is always high.
The high demand for accommodation in the city makes hotel investment a wise thought. Here are the top main reasons Miami is an excellent place for hotel investments:
Miami Is an International Travel Market
We earlier mentioned that the hotel occupancy rate in Miami is high. But did you know that Miami ranks fifth nationwide in terms of hotel occupancy? Business travelers, retirees, and people looking for a vibrant social life think of Miami whenever they spend time in south Florida.
Besides, many hotels are located near the Miami international airport, further increasing the convenience of the city when it comes to accommodation. With such huge traffic, Miami is a great spot to invest in 2022.
Hotel Options Are Endless in Miami
There are many types of hotels in Miami designed to meet the specific needs of investors. Whether you need a classy beachfront hotel or a simple ultra-modern hotel, you can always get the hotel of your needs. The wide array of options makes it easier for investors to choose the best based on their budget. You only need to figure out what you need, prepare your budget, and then select the best hotel investment.
Hotel Market Is Profitable in Miami
Miami's hotel market holds an excellent record of property appreciation compared to the other cities in the United States. One of the main Miami neighborhoods promising high returns on hotels is Wynwood, where the cost of buying property is relatively low. You can buy your hotel property, improve it and keep it, or even sell it at a higher price. Other promising neighborhoods great for hotel investing include Coral Way, Northeast Coconut Grove, and East Little Havana.
Tax and Liability Advantages
Florida is one of the five states which don't impose a state income tax. This is a great advantage because you won't have many financial obligations at the end of the year.
Ways to Invest In the Hotel Market in Miami
One main advantage of hotel market investing is that the market is wide and diverse so that you can choose the most suitable investment method. Here are the three main ways to participate in the hotel market investment in Miami.
1. Buy an Actual Hotel
This is the most common method, where you acquire the actual hotel building. In most cases, you should review the available hotels in Miami and buy the best for your budget. Or, you can build a new hotel from scratch. You can get a hotel of any size and design in Miami.
2. Join a Crowdfunding Hotel Investment
Crowdfunding is the ideal option if you don't have enough capital. Let's say you identify a good property but you don't have the money. You can list the property on an online crowdfunding platform, join hands with the willing investors and get the hotel property. There are many crowdfunding opportunities for other commercial real estates, including hotels. You only need to ensure you list the property on a legit crowdfunding platform.
3. Invest in Hospitality REIT
REIT stands for Real Estate Investment Trust. REITs work the same ways as stocks, except they don't involve stocks but properties. REIT is a property company that pools financial resources from multiple investors. The company then purchases on behalf of the investors and divides the taxable income to the shareholders.
In Florida, many REITs support hotel investments. Some REITs, such as Ryman hospitality properties specialize in high-end hotels, while others, like hospitality properties trust offer mid-level hotels. Investing in the Miami hotel market through REITs promises a regular passive income, so you can consider these options if you need steady income without too much engagement.
Learn More About Miami Hotel Markets
It's safe to say the Miami hotel market is worth investing in. The location is convenient, there are no state income taxes, and most importantly, the population is high. However, it's essential to collect vital information before you set off your journey of becoming a hotel investor in Miami. While the industry is lucrative, you still need to collect the correct information to make an informed investment decision. Determine the investment path you will choose, determine your budget and remember to seek professional guidance. Hopefully, you found our guide helpful as you kick off your journey.
For more information and guidance on real estate investing in Florida, don't hesitate to contact us. We have been helping investors join the Florida real estate market, and we will be glad to help you too.