The Miami real estate market is a dynamic market that offers investors strong rental income potential. Rental yield refers to the annual percentage of an investment property’s rental income relative to its value. In this article, we take a closer look at the rental yield in Miami based on current data for 2024. We will compare short-term rental yields (daily/weekly rentals such as Airbnb) with long-term rental yields (traditional yearly rentals) and examine the average rental yield rates across Miami, variations by region and net profit after expenses.
Note: The data and rates below are based on current statistics as of 2024.
Short Term (Airbnb) vs. Long Term Rental Yields
In a tourist and business hub like Miami, short-term rentals are a popular investment strategy. However, there are some advantages and disadvantages compared to long-term rentals:
- Income Potential: In short-term rentals, you rent out your property on a nightly or weekly basis. It is possible to generate higher gross income by increasing prices during high demand season and event periods. Long-term rentals have a fixed monthly rental income. For example, long-term rentals in Miami generate an average monthly income of ~$3,300. Short-term rentals can exceed this amount with the right location and management, but may experience income fluctuations (income may drop during low season).
- Occupancy Rate: Occupancy is generally high for long-term rentals. Miami was the most competitive rental market in the US with a very high occupancy rate of 96.5% in 2024. This means that when you rent an apartment for a long-term rental, the chances of it becoming vacant are very low. For short-term rentals, the average annual occupancy is lower – the average occupancy for short-term rentals in Miami hovers around ~50%. This means that the property can be vacant for about half of the year. Of course, the occupancy rate can go up to 70-80% depending on the location and tourist appeal of the property, but in general, long term rentals are more advantageous in terms of continuity.
- Management and Workload: Short-term rentals require active management. Frequent tenant turnover, cleaning, check-in and check-out, and guest communication means daily chores. If you do not want to manage individually, you may need to hire a professional management company. Short-term rental management fees in Miami are usually between 8-12% of monthly income. For long term rentals, the workload is less and management is simpler as the tenant usually stays for 1 year or more. Once the tenant settles in, there is no daily hassle other than regular rent collection and maintenance.
- Expenses and Taxes: While income is high in short-term rentals, expenses are also high. For example, lodging taxes: The state of Florida and Miami-Dade County impose a total lodging tax of 12-13% on rentals shorter than 6 months (12% in Miami city limits and 13% in Miami Beach.) While this tax is usually collected by platforms like Airbnb and remitted to the state, it is important to consider this additional burden when setting your rental rates. Short-term rentals will also include furniture, internet, cable TV, cleaning costs, frequent maintenance and repairs, and guest advertising/marketing costs. For long term rentals, some of these costs can be passed on to the tenant (e.g. the tenant may be responsible for the electricity and water bills) and there is no accommodation tax for rentals longer than 6 months. Therefore, in the long term, expenses are less and more predictable.
- Legal Permits and Restrictions: Short term rentals in Miami are restricted by local regulations. In particular, many neighborhoods in Miami Beach prohibit rentals of less than 6 months. Single-family homes (detached) and many condos are not eligible for short-term rentals in Miami Beach. Investors planning to rent short-term should check whether the neighborhood and building allow short-term rentals before purchasing a property. Long-term rentals, on the other hand, generally do not have such restrictions and are available in all areas.
Which is More Profitable?
There is no clear answer to the question “which strategy is more profitable” for short vs. long term returns, as it depends on the location of the property, tourist demand, quality of management and control of expenses. In general:
- In areas with high tourist traffic such as South Beach and Downtown, with the right short-term rental management, it is possible to generate 10-30% more annual income compared to long-term rentals. Especially during the summer season, festival and event periods, the income from short-term rentals can multiply the long-term rental income during the same period.
- On the other hand, if your occupancy remains low or is poorly managed, short-term yields can fall below long-term rental income. In fact, according to data from the end of 2022, the average short-term rental income across Miami ($3,043/month) was close to the long-term average ($3,339/month), but the average occupancy of short rentals was only around 35%. This suggests that many landlords are not earning the full potential income.
To summarize: If you own a property in a busy tourist area and you can actively manage it (or hire a professional service), short-term rental may offer a higher gross return. However, if you want a more stable and passive income, a long term rental is safer and less hassle. Investors should choose one of these two strategies, taking into account their own time and risk preferences.
Average Rental Yield in Miami (%)
Miami is a market with high rental yields compared to the US average. Based on 2024 data, the average annual gross rental yield in Miami is around 7%. This is higher than the US average gross yield of ~6.1% over the same period. So, if an investor buys a $500,000 apartment in Miami and rents it out, they can expect to earn an average annual gross rental income of ~$35,000 (around $2,900 per month).
Of course, this depends on the type of property and its location. For example, condos can often have higher yields than single-family homes. In Miami, there are many condo/apartment options where the rent multiplier (price to rent ratio) can favor the investor. Downtown apartments, in particular, can offer strong gross returns due to high rental rates. For example, according to Q3 2024 data, the average gross rental yield for apartments in Miami is 7.38%.
Several factors play a role in Miami’s high rental yields:
- High Rental Demand: As mentioned above, Miami is the most competitive rental market in the country in 2024. Tenants are struggling to find housing and existing tenants are renewing their leases (72% of tenants have renewed their leases). This high demand keeps rental prices high, increasing investors’ income.
- Relative Affordability: Although housing prices in Miami have risen rapidly in recent years, they are still relatively affordable compared to cities such as New York and Los Angeles. This means a lower investment capital for the same rental income. For example, a property with a similar rental income may be much more expensive in New York than in Miami, so in Miami the investor’s money works more efficiently in terms of rental income.
- Tourism and Immigration: Miami has a vibrant rental market as it is both a tourist destination and an immigrant destination. Short-term rents appreciate during the tourist season, while year-round new residents create demand for long-term rents. This dual demand structure allows property owners to generate rental income year-round.
An average annual gross return of 7% is, of course, an average. There are luxury properties on the market with gross returns of less than 5%, and there are high yield opportunities with returns as high as 8-10%. Below, we take a closer look at how returns vary by region and property type.
Rental Income Rates by Neighborhood
Rental yields within Miami vary significantly by neighborhood. Because the balance of prices and rents is different between downtown and waterfront neighborhoods and more suburban neighborhoods, investment returns also vary.
As a general rule, more affordable neighborhoods offer higher percentages of rental income to property value. Luxury and expensive neighborhoods, on the other hand, tend to have lower rental return percentages (because the property value is very high but the rental income is relatively low relative to that price).
The table below shows the average gross rental yields for different housing types for Miami Beach (touristy beachfront area) and Brickell (downtown financial district), two popular investment areas in Miami:
| Region | Studio Apartment | 1 Bedroom | 2 Bedroom | 3 Bedroom |
| Miami Beach | %9,0 Gross | %8,5 Gross | %6,8 Gross | %6,6 Gross |
| Brickell | %8,0 Gross | %7,1 Gross | %6,7 Gross | %6,7 Gross |
The above data reveals some important points:
- Miami Beach: Small apartments in this highly attractive tourist destination offer very high yields. The gross return on a studio apartment reaches 9%. A 1+1 apartment also has a strong rate of 8.5%. However, as the apartment gets bigger (square meters increase), the rent multiplier decreases; the yield for 2-room and 3-room apartments drops to 6-7%. This may be due to the fact that the sales prices of luxury and large apartments are very high, but this luxury is not reflected in the rent at the same rate. Nevertheless, 6%+ gross yield is still good for this segment.
- Brickell: There is a similar trend in the skyscraper-laden Brickell area, known as a financial center. Smaller units offer higher proportional returns – a studio apartment yields ~8%, a 1-bedroom ~7.1% gross. For larger 2-3 bedroom apartments, the rate drops to ~6.6-6.7%. Brickell is a prestigious neighborhood with a high concentration of white-collar professionals. Since rental demand is very high, prices are also high, so returns are balanced at a moderate level.
- Other Neighborhoods: Many other neighborhoods in Miami offer opportunities for investors, not just these two areas. For example, areas such as Wynwood and Little Havana have lower real estate prices than Brickell or Miami Beach, so the gross return percentage can be higher when rented out. Little Havana is an area undergoing urban regeneration and has cultural charm; there are investors who can buy affordable properties and earn returns of up to 8-10% at reasonable rents. Likewise, the Edgewater or Allapattah districts near the city center stand out as neighborhoods with development potential and relatively affordable prices. Since it is possible to buy an apartment in the $250,000 – $350,000 range in such neighborhoods and receive a monthly rent of over $2,000, the gross rate of return can approach double digits.
- Luxury Neighborhoods: On the other hand, in very high-value luxury neighborhoods such as Coral Gables, Key Biscayne, Downtown Miami (outside Brickell), gross rental yields can be 3-5%. For example, in Coral Gables, a detached house worth over $1 million can fetch around $50-60k per year, which means a gross yield of 5-6%, which is considered normal for the luxury segment. Investors aim for long-term appreciation (capital appreciation) rather than rental income when buying property in prestigious neighborhoods, as rental income may be low relative to the money invested.
Regional differences in terms of short-term rentals:If you are looking for short-term (Airbnb-type) rentals, the Miami Beach and Downtown/Brickell areas offer the highest returns.Due to the high number of tourists, you can increase your annual income by short renting an apartment in these areas throughout the year.In Miami Beach, for example, daily rental prices average between $200-300 per day, while occupancy rates can reach 70-80% during the high season. This means a potential income of $4-5k per month for a well-managed property. However, keep in mind that some neighborhoods in Miami Beach have a ban on short rentals and only certain areas are allowed. Midtown, Design District, Wynwood, and other touristic/central areas are also popular with young tourists and travelers and can be considered for short-term rentals.
To summarize, each neighborhood in Miami has a unique rental yield profile. When choosing an area, investors should not only look at the percentage yield, but also the development potential of the area, the stability of the tenant profile and the suitability of the area for their investment strategy.
Net Earnings Ratios after Expenses (Net Return)
The rental yield rates mentioned above are gross (gross = before deducting expenses). For the wise investor, what really matters is the net rental yield, i.e. the ratio of the earnings to the value of the property after all expenses, taxes and costs have been deducted. In Miami, gross yields hover in the 6-8% range, while net yields are usually lower than that. So what are the main expenses that make up this difference?
- Property Tax: There is an annual property tax on real estate in the state of Florida and Miami-Dade County. The median (average) effective property tax rate in the city of Miami is approximately 1.33%. This equates to an annual tax of approximately $6,650 for a property worth $500,000. While Florida has the advantage of not having a state income tax, it is necessary to include real estate tax in the budget. Real estate tax is an important item that will directly reduce your gross rental income.
- Insurance: Due to Florida’s climate risks (hurricanes, floods), home insurance premiums are higher than the national average. Especially in the Miami area, insuring a home can cost several thousand dollars per year (depending on the location and age of the property). Insurance can cost 0.5-1% of the property value per year. For example, a condo can cost $1,500/year and a detached house can cost $3,000+/year.
- Maintenance & Repair: Maintenance costs are inevitable for a rented property. A general rule of thumb for routine expenses such as air conditioning maintenance, painting, plumbing repairs, etc. is to budget 1% of the property value each year for maintenance/repairs. For a $500k house, this means ~$5,000/year. Of course, in new buildings, maintenance costs may be low in the first years, whereas in older buildings, this ratio may increase.
- Dues and Common Expenses (HOA): If the property you are buying is a condo, there will most likely be a condo association/condo management fee. In Miami, monthly dues can be high, especially in luxury buildings (for example, $500-1000/month is normal for a residence in Brickell). On an annual basis, an expense of $6,000-$12,000 can take up a significant portion of your rental income. While detached houses do not have direct dues, gated communities may have association fees. Dues are one of the biggest items to consider when converting gross yield to net.
- Management Fee: If you use a property management company or consultant for long-term rentals, they typically charge a fee of 8-12% of the monthly rental income. This service includes tenant sourcing, rent monitoring, maintenance coordination, etc. and is particularly useful for those investing remotely. For short-term rentals, management fees can be even higher (some companies charge up to 20-25% because of the high workload). If you manage your property yourself, you can keep this fee as a profit, but you will need to invest time and effort.
- Short Term Rental Taxes and Charges: As mentioned above, short-term rentals are subject to a total of 12-13% lodging tax (state + county + city taxes, if applicable). Although the platforms collect this tax from the guest, ultimately, considering the competition in the rental market, your nightly rates are considered including these taxes. There is also the cost of cleaning after each guest (housekeeper’s fee or your time), furnishings/depreciation, and commissions (~3-5%) from platforms like Airbnb. All of these things, when deducted from the short-term gross income, will drag down the net profit. Fortunately, many of these expenses are tax deductible (cleaning, furniture depreciation, advertising, etc. are considered business expenses).
When all these items are added up, the difference between gross and net rental yield becomes apparent. For example:
- Let’s consider an apartment worth $500,000 with a 7% gross yield (annual gross rental income of $35,000). Let’s assume that the annual expenses of this apartment are as follows: $5,500 property tax, $1,500 insurance, $5,000 maintenance/repairs, $6,000 dues, $3,500 (10% of rent) management fee. Total expenses would be ~$21,500. Subtracting these expenses from the gross income of $35,000, the net income is ~$13,500. This corresponds to a net rate of return of 2.7%.
This example is perhaps a conservative (high expense) scenario, but it shows that net returns can be as low as 3%, especially for luxury and expensive buildings. Let’s consider a scenario with more reasonable expenses: Let’s consider a property worth $300,000 with an annual rental income of $24,000 (8% gross return). Property tax ~$4,000, insurance ~$1,000, maintenance ~$3,000, utilities ~$0 (assuming a detached house), management ~$2,400 (10% of rent). Total expenses of ~$10,400 leaves a net income of ~$13,600. This gives a net return of 4.5%. As you can see, net rental yields are typically in the 4-5% range, with a well-managed, low-cost investment getting closer to 6%, and a high-cost property getting closer to 3%.
Advice for investors: Even if the gross rental yield of a property looks attractive, always calculate the net yield by taking into account the expenses. Especially in Miami, dues, property tax and insurance costs are too large to be underestimated. If you are renting short-term, don’t forget the platform commission and cleaning costs. When doing your own bookkeeping, a reasonable approach is to allocate at least 30-40% of gross income to annual expenses, and consider the rest as net income. Fortunately, since Florida is a tax-friendly state (no income tax, property tax is relatively reasonable) and many expenses in the rental business can be used as tax deductions, you can optimize the net return with proper planning.
Smart Investment Strategy with Miami Rental Yields
The rental yield in Miami is an attractive parameter that offers investors both regular income in the short term and the potential for capital appreciation in the long term. As of 2024, Miami offers a very strong rental market, with very low vacancy rates (around 3-4%) and high rental rates. Short-term leases, especially in tourist areas, can yield higher returns than long-term leases if executed correctly, but they come with more intensive management and regulatory compliance. Long-term leases are an ideal option for investors looking for stable, predictable and passive income.
When making an investment decision, it is useful to follow these steps:
Analyze the Area: Decide which area of Miami to invest in. Research the rental demand, development potential and whether short-term rentals are allowed. For example, for a tourism-oriented strategy, Miami Beach or Downtown is a good fit, while for a long-term residential tenant, Kendall or Coral Gables may be a good choice. Compare the rent multipliers for each area.
Calculate Gross and Net Yields: Calculate the gross return using the rental income and sales prices of the properties you have your eye on. Then find the net return by learning the above expense items (especially property tax, dues, insurance). This calculation will show whether the investment is really profitable or not. Remember that the net return should be > bank interest/inflation so that the investment makes sense.
Determine Short vs Long Strategy: Decide early on whether you will rent out your property short term or long term. This decision affects everything from buying furniture to choosing an advertising platform, and in some cases even the decoration of the property. If it is a short-term rental like Airbnb, you should make the property fully furnished and attractive, list it with professional photos and perhaps use dynamic pricing tools. For long-term rentals, durable materials and tenant selection are important.
Don’t Hesitate to Get Professional Support: Especially if you are investing remotely or have limited time, hiring a good property management company will make your job easier in the long run. By including the management fee in your budget, you can make your return more passive. A reliable manager in Miami will protect your investment in finding tenants and solving problems.
Follow Market Trends: The rental market is not static. For example, an increase in housing supply or economic fluctuations can affect rental prices. In 2024, rents were very strong in Miami, but in the future, occupancy rates or rent growth rates may normalize somewhat as new construction enters the market. Therefore, update your strategy by monitoring the market and competing properties.
In conclusion, Miami is a strong market for rental yields. For investors who choose the right area, do their income and expense calculations well, and implement the appropriate rental strategy, Miami continues to be a profitable investment with both short-term cash flow and long-term appreciation. Based on 2024 data, this analysis provides a roadmap, but remember that every investment is unique. By doing your own research and consulting with experts where possible, you can maximize the rental return on your real estate investment in Miami.
