The Miami metropolitan area and the city of Orlando are among the 10 cities nationwide that attract the most interest from investors (Rodríguez, 2019). While Miami is the luxury jewel of the South of the state, Orlando is the mecca of national tourism. So which of the two cities is better to invest in?
Why are the city of Orlando and the city of Miami among the best to invest in?
The University of Central Florida (n.d.) reports that Florida has the fourth largest GDP in the United States. This, only behind California, Texas and New York. Tourism plays a very important role. It is worth noting the fact that 63.4% of the accommodations are located in the coastal counties of Florida. (EDR, 2018).
EDR reports that more than 15 million passengers embarked on cruises in 2016 from Florida ports. This fact is another example of the impact that tourism has on the economy of the State. In addition, the Florida Department of State (n.d.) reports that the state has 663 miles of beaches. This scenario contributes to the growth of rental demand, which adds value to a booming real estate market.
City of Orlando vs. City of Miami, which is more convenient to invest in real estate?
Let’s see the advantages that the city of Orlando and the city of Miami have. Below, we offer some tips to help you decide which of these you should focus your investment on.
Advantages of investing in the real estate market of the city of Miami
Let’s see some advantages of investing in Miami:
- 70% of the city’s population rents. You can rent your property, while it increases in value. After maintenance expenses, payment of taxes and mortgage, the average profitability is 10% (Santarelli, 2020).
- The Port of Miami receives the most cruise tourists nationwide. What makes the city a good option to invest in properties for tourism purposes (University of Central Florida, n.d.).
- The city of Miami is one of those experiencing the most stable growth in property prices. Prices have been growing for 102 consecutive months. In addition, 25.9% of real estate transactions are conducted in cash, compared to the national average of 17% (Gerrity, 2020).
Advantages of investing in the city of Orlando
Among the advantages of investing in the real estate market of the city of Orlando, the following stand out:
- Its theme parks are among the most dynamic in the world. Thanks to them, more and more people plan to travel to Orlando for their vacation. They receive more than 70 million visitors (TEA/AECOM, 2017).
- Vacation condominiums and other properties for tourist rental are booming. The high cost of lodging at Disney World resort hotels, Universal Studios and other Orlando parks is helping this trend continue.
- It has a very dynamic rental market. Henry (2019) reports that rental properties get an average of 34 potential clients and only stay on the market for 19 days.
Tips for deciding which of the two cities to invest in
As we saw, both cities are wonderful for investing in real estate, but, if you must decide on one, you should read the following tips:
Set your investment goals before deciding whether to invest in the city of Orlando or Miami
Do you want to buy a property for tourist rental purposes? You can consider the city of Orlando. Do you prefer to keep your rent in the long term, while you see how your home is revalued? So, your place is Miami.
Locate the most profitable areas of Orlando or Miami
Areas near the theme parks of the city of Orlando are usually more expensive, but offer greater profitability. In addition, they are sold or rented faster.
Before choosing, think about your diversification strategy
Do you prefer to concentrate your real estate investment diversification strategy in a single city? Think of the Miami Metro Area. With more than five million inhabitants, the city has areas with different purchasing power. Pompano Beach, for example, has several communities for people looking for the perfect retreat for their retirement (El Mundo, 2020). The city of Orlando and the city of Miami compete in luxury, cultural diversity, infrastructure and economic dynamism. In addition, both have a thriving real estate market . Setting your investment goals and aligning them with your diversification strategy will help you select the city with the right real estate ecosystem to invest in.
References
EDR. (January 1, 2018). Return on investment for visit Florida. Retrieved from https://edr.state.fl.us/Content/returnoninvestment/Tourism2018.pdf
The World. (March 18, 2020). Florida, the star destination of retirees, under alarm before the Coronavirus. The World. Retrieved from https://www.elmundo.es/internacional/2020/03/18/5e71fdc5fc6c83003e8b45b9.html
Florida Department of State. (n.d.). Florida facts. Retrieved from
https://dos.myflorida.com/florida-facts/quick-facts/
Gerrity, M. (June 23, 2020). Greater Miami Home Prices Continue to Rise in May as Sales Dip from COVID. The World Property Journal. Retrieved from https://www.worldpropertyjournal.com/real-estate-news/united-states/miami-real-estate-news/miami-real-estate-news-miami-association-of-realtors-monthly-housing-reports-miami-home-prices-in-may-2020-condo-11999.php#:~:text=102 20Consecutive 20Months 20of 20Price%20Consecutive%20in%20Miami&text=Miami-Dade%20County 20single-family,a 20streak 20of 208.5%%20Appreciation%%20of%.%20single-family,a%%20of%
Henry, W. (October 14, 2019). Orlando being pitched as Florida’s top city for buying rental property, and that’s bad news for renters. Orlando Weekly. Retrieved from https://www.orlandoweekly.com/Blogs/archives/2019/10/14/orlando-being-pitched-as-floridas-top-city-for-buying-rental-property-might-not-be-very-good-news
Rodriguez, R. (October 16, 2019). Nearly a fifth of all homes sold in South Florida are bought by investors, study says. Retrieved from https://www.miamiherald.com/news/business/real-estate-news/article236202473.html
Santarelli, M. (August 21, 2020). Miami real estate market & investment overview 2020. Retrieved from https://www.noradarealestate.com/blog/miami-real-estate-market/
TEA/AECOM . (2017). The Global Attractions Attendance Report. Retrieved from https://www.teaconnect.org/images/files/TEA_268_653730_180517.pdf
University of Central Florida. (n.d.). Florida tourism’s impact on local
businesses; history, statistics and resources. Retrieved from https://www.ucf.edu/online/hospitality/news/florida-tourism/
