Miami’s Rental Market Is The Most Competitive And Least Affordable In The United States

 
Another day, another list with Miami in the #1 spot. Actually, there are two lists that we have to discuss today. This will come as a welcome announcement to landlords throughout the Miami area. Tenants, eh, not so much. It’s hard out there for a tenant in the 305 right now.

Miami-Dade has been named the #1 Most Competitive Rental Market in the United States by RentCafe, who surveys the rental markets across the US each year. To add insult to injury, we have also topped the list of the most rent-burdened markets in the country, with tenants paying 60% of their income to their landlord each month. The traditional amount to budget is 30%, so we are seeing a marked difference between what is suggested by banks/governmental bodies and what is actually true on the street. We’re also dealing with the fact that 75% of tenants are renewing their leases even though lease prices have skyrocketed over the last 2 years, now being 58% higher than they were when the pandemic began… and there are no signs of a slowdown.

In 2022, there were on average 32 renters competing for each available unit in Miami. The national average was 14 renters per available unit. RentCafe also showed that vacant rental units took an average of 25 days to be leased, which sounds like a long time but is not. Those 25 days start accruing on the end date of the previous lease, meaning that the time required for making the apartment ready to be shown to prospective new tenants, time to negotiate and sign the new lease, do the application process for the landlord and the management office (typically done separately in condo rentals, not concurrently), and get an elevator date are all lumped into this 25 day time frame. In addition, most buildings do not work on any paperwork or apartment turnover work on the weekends, but the time frame of availability index does continue on weekends and holidays. Considering this, 25 days is a flash in the pan.

It used to be that we would be able to show a vacant apartment to a prospective tenant. The tenant could see a list of apartments in one day or even over multiple days, then sleep on it and we would still have ample time to do all of the paperwork and scheduling without any care in the world regarding competition and time frames. This is not the case any longer.

These days we are having to advise landlord clients to start showing the rental before the previous tenant leaves, and it typically rents before the end of the old lease. You have to be very agile and quick in order to score the perfect spot, and even still it is unlikely that you’ll find a PERFECT spot. More likely, it will be a nice apartment that has most of what you requested and the fact that you beat out the competition will make it a perfect apartment.

How to increase your chances of finding a place:

• Be Organized: Have all of your verifications ready to go. You will need a proof of income, proof of residency, proof of credit and your deposit funds ready to go. The proof of income can come in the form of an employment letter from your HR department, or if you are self-employed you can use bank statements or tax returns to get your foot in the door. These items should be scanned and saved for easy access on the day you go to view options. If you were previously a renter, a landlord recommendation letter is also a great idea.

• Be Loyal: Hire ONE Realtor to represent you. Many tenants feel like dealing directly with the landlord or having many agents shopping for you is the best bet, but that is a misconception. A landlord is going to represent him/herself and look at the bottom line. Wouldn’t you? If you hire several Realtors to shop for you, none are going to give you their full attention. Realtors only get paid when the contract is executed, so first priority goes to those tenants who are most likely to transact. You need to have one person to express your wants/needs/situation/timelines and act in your best interest. Doesn’t that sound better than having to organize ten different people, all showing you the same inventory? That’s right. We’re all working with the same availability, so it’s much more efficient to hire one person and trust them to do their job. It is also important to note that the landlord pays the Realtor commission in Florida, so having the professional representation costs you nothing. Broker fees are also not customary when rental shopping, so there’s a bit of bright news when comparing the process to the process in New York.

• Be Agile: In Florida verbal commitments do not hold any value. When you find “The One”, you need to be able to get the contract executed ASAP. In order to make a binding deal, all parties need to have signed the “Contract to Lease” and have your deposit in escrow. In a rental-only building, they sometimes have their own paperwork, so it may just be the lease and deposit to hold the apartment, but watch your P’s and Q’s with this part and act quickly in order to make sure you don’t have to start over. This is the reason you want to have your entire application kit saved somewhere handy, so you can include it with the Contract To Lease and escrow letter immediately. If the landlord has a few identical offers to consider, they will choose the one that has the organized application over the one that is crumpled and missing pages.

• Don’t Play Games: Landlords don’t like games and we don’t either. They always make additional drama in the process and open an opportunity for a less dramatic tenant to swoop in and take the apartment you were jockeying for to begin with. Shoot everyone straight from the outset. If you have a pet, don’t get fake service pet papers in order to circumvent building rules. Many buildings verify this nowadays anyway. Don’t mark up the lease with terms you invented between the Contract to Lease and the actual Lease. As Realtors, we cannot change those contracts anyway. You have to find an attorney to do that. The same goes for the building application packet. You cannot cross off rules that you don’t like and have no intention of abiding by. You have to fill out the packet in its entirety or someone else is moving in, and that’s just the end of it.

We are not giving you this advice in order to scare you off. It is our goal to make your move as smooth and stress-free as possible. Setting the expectations now will help you to not have a panic midway through the process when you see how things are turning out, inventory continues to dwindle and you fear being homeless. You’re in good hands even if we do have to go through these pointers on the first day.

While inventory is uncomfortably short at the moment, we do expect some relief in the coming years. Next week we will speak about some of the new rental inventory that is being delivered to the marketplace, opening back up the opportunities for those in the mid-range price points.

If you are interested in speaking more specifically about a neighborhood, project or listing, please contact Michael Light, Broker and Executive Director of Luxury Sales at Douglas Elliman. You may reach Michael directly at (786) 566-1700 or via email at michael@miamiluxuryhomes.com.