The rising rents also reflect that condo sales prices have rebounded sharply in Miami from their recession lows, especially in the downtown Brickell area. Most of the overhang of new condominium inventory has been snapped up more quickly than many had expected, with much of it going to cash-rich foreign investors, who rent the units out.
Raquel Colp, the sales and leasing executive for Axis Brickell, which is still working through sales of about 44 developer-owned units, said rents have to keep pace with the higher market selling prices of condo units, since investors expect a certain rate of return.
Colp recently was preparing a lease renewal letter for a tenant in a two-bedroom condo that was renting for $1,925 a month and wondering: Were looking to renew, but how do you tell someone the rent is going up $375? she said. $2,300 would be close to the bottom pricing for a two-bedroom condo, she added.
One tenant at Axis recently managed to reduce the rent on a two-bedroom unit by $100 a month to $2,600 a month from the asking price of $2,700 a month because they paid five months upfront, Colp said.
Occasionally, existing tenants can negotiate breaks. Melissa Samowitz, who in August renewed the lease on her one-bedroom, 1 1/2-bath condo unit at Latitudes on the River in downtown Miami for a second year, said the couple who owns the unit sought to boost the rent $100 a month to $1,625.
We pushed back, because were good tenants, said Samowitz, 26, who works at a software company in Weston. The compromise: A $50 a month increase.
I know if we moved, we would be paying a lot more, Samowitz acknowledged. Most one bedrooms are $1,800 or so. And the neighborhood is in high demand, she said: Theres restaurants popping up. The place is booming.
Focus president Werley said discounts and come-ons to lure renters in downtown Miami are at historic lows.
Incentives for all intents and purposes disappeared in downtown sometime in 2011, he said. You dont need to offer special deals.
James Brinker, a real estate agent with CVR Realty in Miami, agrees that high occupancy rates and strong demand give landlords the stronger hand.
You have to pay market price, Brinker said. Theres not a lot of negotiation.
Brinker said he recently checked the Multiple Listings Service for rental units between $1,500 and $2,000 a month in the 33132 ZIP code that covers part of downtown. Only six listings showed up. It blew my mind.