Is Miami too saturated for Air BnB?

Question

Hi! I am looking to start my investment journey and I have been seeing all this hype about air bnb. I wanted to know if air bnb arbitrage was a good choice to go with or is it actually dead how people say it is. I live in Miami so I was thinking of renting an apartment and trying it out. Would Miami be too saturated or is that something I wouldn't have to worry about? Has anyone with experience had multiple months on end without getting a booking? Enlighten me a bit please :)

Michael Baum · Answer

Hey @Daniella Rodriguez, do a search on arbitrage and read up. It is not the best strategy for most people starting out unless you have a nice wad of cash already.

Plus Miami has a lot of regs around STRs in the city.

Sebastian Giraldo · Answer

Hello @Daniella Rodriguez, currently the general state of Miami STR is that it is overly saturated and properties are being either sold or rented MTR or STR for much lower than expected. The listings that are occupied are those that debt expenses and or carrying costs can go as low the market requires in order to get rented.

Now, that does not mean you CANNOT perform well. There are exceptions. Such as homes that have character and set themselves apart. Those that provide a memorable experience OR outstanding location, meaning walking to restaurants or bars.

Regardless, if you can weather the storm the good times will come back and your listing will be fully developed with reviews etc. These are typical market cycles. You may want to sit one out with MTR or rent long term in the mean time.

Jay Thomas · Answer

I'd say Airbnb can be a good investment, but it's vital to research Miami's regulations on short-term rentals first. Miami is a popular destination, so there's competition, but careful property selection can help. Expect fluctuations in bookings due to seasonality and other factors. Plan well, do market research, and have a backup plan. Good luck!

Andrew Steffens · Answer

Generally I do not think arbitrage is a worthy pursuit, however if you must:

Go big.  Getting a $3k per month apartment, furnishing it, paying all utilities etc just to gross $4,500 is not worth the time and energy and will take a long time to pay off the startup costs.  Get a large, unique, legal, and well located property.  My first foray into STR was a small mansion on the water for rent at $6k per months.  $20k in startup costs and it brought in over $30k per month for a whole year.

Sarah Kensinger · Answer

@Daniella Rodriguez @Akash Dedhia

If your curious about rental arbitrage and someone who can teach how to effectively use that strategy, DM and I can give you a list of names. Definitely works if you do it right and then you can build up cash and purchase properties!

Lastly, I'm pretty sure STR are nearly banned in Miami so you may need to spread your sights out.

Akash Dedhia · Answer

any thoughts on sean rakidzich's take on arbitrage

John Underwood · Answer

I agree with Michael. Read up on past post why Arbitrage isn't a good idea.

Dave Stokley · Answer

I don’t know anything about the Miami market so I can’t help you there, but I can tell you that this isn’t a decision that should be made solely on the opinions and anecdotes of people on the internet. You should really go find some hard data (which you will probably need to pay for from a company like Airdna) to inform your decisions.

Is Miami too saturated for Air BnB?

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