With the pandemic and high supply of rentals in the Miami market, some private landlords and many rental communities are offering aggressive incentives to fill their vacancies.
Rents in Miami are slightly declining
More tenants are becoming homeowners
What incentives are rental communities offering?
What incentives are private landlords offering?
Rents in Miami are slightly declining
With the influx of newly built condo's and residential apartment buildings, some Miami residents may have anticipated rents to decline, and the pandemic has lower prices a reality. Miami has seen rent prices down 2.2%, with areas such as Coral Gables seeing rents decline as much as 10.5%. As an agent, I've noticed higher decreases with newer rental communities, even for myself as a tenant. A new tower Park-Line has lowered prices from $2,400 to as low as $1,850 on select units.
With uncertainty and job losses, more and more tenants choose to move home with friends and family. Over the summer, Zumper found that two of three renters suffered pay cuts, loss of hours, and employment. In October, airlines have laid off thousands of airline workers, leaving many Miami workers without income and insufficient unemployment pay. The maximum unemployment pay is only $275 a week, which isn't merely enough to survive off in Miami.
As for workers who have remained employed, more and more companies are moving into permanent remote working. Many renters do not want to pay the big city rents, and a lot are moving into suburban areas with lower rents in more affordable cities.
Overall, the market took a hit and rent prices declined but are rebounding and prices are starting to flatten across the country.
More tenants are becoming homeowners
The pandemic has brought historically low mortgage rates. Many renters who have not experienced job loss are taking advantage of these low rates and are becoming homeowners, purchasing single-family homes, and townhomes seeking more space.
For example: One of my clients was renting a unit in Edgewater and purchased a newly built townhome from Lennar in Aventura. They moved from a one-bedroom condo to a much more spacious three-bedroom home with enough space for an in-home office as both are working mostly working from home now. Their monthly mortgage payment was just around their monthly rent payment for the condo, and Lennar covered their closing costs and only had to put 3% down.
What incentives are rental communities offering?
Many rental communities have been aggressive with their incentives to attract tenants and fill their vacancies.
List of incentives being offered by rental communities:
Up to 2 free months of rent
Flash savings (lower rent prices on select units)
Low security deposits
Waived monthly fees such as parking and amenity fees
Allowing tenants to "try out" units and being able to switch if not satisfied
What incentives are private landlords offering?
The average landlord may have a hard time offering incentives such as two months of free rent but can attract tenants with their own "promotions." Some lndlords are offering lower upfront costs by only requiring 1st month's rent and a security deposit or offering lower security deposits.
List of incentives being offered by private landlords:
A gift card
Lower security deposit
Waive last month's rent upfront
Offer to cover the condo association application fee
As a private landlord, you should first be aware of the market and your situation to plan accordingly. Pricing your rental aggressively is very important during the pandemic. Competitive rent prices will always attract more tenants. Next, you should access your situation and determine if and what incentives you can offer prospective tenants. Keep in mind, the longer your listing is on the market the more money you will lose so offering a good incentive may mean giving up some income up front but it will secure a tenant and protect your profit in the long run.