(Bloomberg) -- It’s not just home sales that are sizzling in Miami. Investors eager to play in the hot property market are also buying up tiny condos that can be rented out as hotel rooms.
Developers are giving them a lot to choose from: There are 2,770 short-term units -- micro condos that can be rented out daily -- planned or under construction in greater downtown Miami, according to data from Related ISG Realty. That compares with just 779 that were built from 2012 to 2020.
Of the nine towers with short-term rentals that are in the pipeline, four have sold out, including the 448-unit Natiivo, and the Legacy, with 310 micro condos within a traditional hotel.
The properties are drawing investors -- particularly from South America -- looking for a slice of the South Florida real estate market at lower price points, said Craig Studnicky, chief executive officer of Related ISG. The deals are also a bet on the future of the area’s hospitality industry, as many of the developments won’t be completed until 2025 or 2026.
“Some of these projects are very, very inexpensive,” Studnicky said. “And this buyer is looking to buy an income-producing property, not a home.”
The sold-out Natiivo’s units started in the mid-$300,000’s, Related ISG said. Prices at a not-yet-begun tower, called District 225, start at $388,000. More than 80% of that project’s 347 units have committed buyers, according to the firm.
The investment is a bargain compared with buying into some of the area’s swankiest condo buildings. In the third quarter, the median sale price of luxury condos in Miami was $1.25 million, a 47% jump from a year earlier, according to a report by Miller Samuel Inc. and Douglas Elliman Real Estate.
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