After All Costs, Miami's Short-Term Rental Premium Drops to 3.8%

The gross short-term rental premium in Miami (Miami-Dade County) is 65% for a 3-bed house, but once you subtract Airbnb fees, insurance, maintenance, utilities, and property tax, the gap narrows considerably. This article breaks down the real after-costs picture for both a 3-bed house and a 2-bed apartment, because the cost structures differ materially: apartments add HOA fees but come with a significantly lower entry price.

A 3-Bed House Nets $28,475 as a Short-Term Rental After $29,340 in Costs

The table below shows what a self-managed 3-bed house in Miami-Dade County actually costs to operate as both a short-term rental and a long-term rental (LTR). Both columns assume owner management with no agent fees.

Based on a median 3-bed house price of $750,561. Short-term rental assumes 67% occupancy at $262/night. Airbnb fee is the host-only rate; Vrbo (~5%) and Booking.com (~15%) charge differently. Short-term rental maintenance includes furnishing replacement costs.

Airbnb Fees and Insurance Are the Biggest Cost Gaps Between Strategies

The largest single cost that short-term rental operators face is the Airbnb host fee at 15.5% of gross revenue, totalling $8,961 per year. This fee alone absorbs a significant portion of the gross premium over long-term rental income. Short-term rental insurance runs roughly $3,452 compared to $1,526 for a long-term rental policy, reflecting the higher liability exposure from frequent guest turnover.

Maintenance costs are also higher for short-term rentals at $8,294 versus $7,318 for a long-term rental, because the short-term rental figure includes furnishing replacement and the faster wear from guest usage. Utilities add another $2,964 that long-term rental landlords typically pass through to tenants. The result: a gross premium of 65% compresses substantially once these costs are deducted. In a premium market like Miami where entry prices average $750,561 (well above the Florida median of $455,850 and the national median of $260,430), every percentage point of yield matters.

A 2-Bed Apartment Adds HOA but Lowers Entry Price to $245,026

Apartments present a fundamentally different cost structure. The entry price drops to $245,026, but HOA fees of $3,236 per year apply regardless of whether you run a short-term rental or a long-term rental. Here is the self-managed breakdown.

Based on a median 2-bed apartment price of $245,026. HOA fees apply to both rental strategies. Short-term rental maintenance includes furnishing replacement costs.

Lower Entry Price Helps Apartments, but HOA Fees Take a Meaningful Bite

The apartment's biggest advantage is its entry price: $245,026 versus $750,561 for a 3-bed house. That lower denominator can improve yield percentages even when absolute income is lower. However, the HOA fee of $3,236 per year is a fixed cost that houses do not carry, and it applies regardless of whether the property is rented short-term or long-term. This makes the apartment's cost structure less flexible; even in months with no bookings, the HOA bill arrives.

On a net yield basis, the short-term rental comparison comes down to 3.8% for the 3-bed house versus 8.2% for the 2-bed apartment. For long-term rentals, the comparison is 2.5% versus 5.8%. Investors choosing between property types in Miami should weigh these yield differences against the substantially different capital requirements. In a premium market where median house prices sit roughly $750,561, the apartment at $245,026 may be the only realistic entry point for many investors, even if the yield dynamics are less favourable on paper.

Short-Term Rental Only Breaks Even at 40% Occupancy

The gross break-even occupancy for the 3-bed house (the point at which short-term rental gross revenue matches long-term rental annual income) is 40%. This is a floor, not a target. The market median occupancy sits at 67%, providing a meaningful buffer above break-even. That said, occupancy is not guaranteed; seasonal fluctuations, increased competition, or regulatory changes could push individual properties below this threshold. Miami's year-round tourism demand provides some insulation, but investors should stress-test their projections at occupancy levels below the median.

Management Costs Eat Around 20% of Short-Term Rental Revenue

The tables above assume you manage the property yourself. For investors who prefer a hands-off approach, professional management changes the equation substantially. For a 3-bed house run as a short-term rental, hiring a manager adds around $11,563 per year (roughly 20% of gross revenue), dropping the net yield to approximately 2.3%. That is a significant compression from the self-managed 3.8%, and it brings the short-term rental yield much closer to (or potentially below) long-term rental returns.

For a long-term rental, a property manager typically charges around 9% of collected rent, adding roughly $3,154 per year and reducing the long-term rental net yield to approximately 2.1%. The gap between managed short-term rental and managed long-term rental is narrower than many investors expect. Self-management is where short-term rental earns its premium; if you are not prepared to handle guest communications, turnover cleaning, and maintenance coordination, the financial advantage shrinks considerably.

Florida Has No State Income Tax, but Depreciation Is the Bigger Story

Florida levies no state income tax, which means your rental income (both short-term and long-term) is only subject to federal tax. This is a meaningful advantage compared to high-tax states. On the federal side, rental property owners can claim depreciation on the building value over 27.5 years. For a typical Miami property, the depreciable building value is approximately $600,449 (roughly 80% of the purchase price, with the remainder allocated to land), yielding an annual depreciation deduction of around $21,835. This paper loss offsets rental income and can significantly reduce your tax liability. Short-term rental income reported on Schedule E may also qualify for additional deductions if you materially participate in management. Consult a tax professional for advice specific to your situation.

Transaction costs also apply at purchase: closing costs and transfer taxes in Florida vary by county and transaction structure. Miami-Dade County's documentary stamp tax and potential surtax add to buyer costs. A Florida state vacation rental license is required for short-term rentals, costing approximately $100, and tourist development tax applies on top of state sales tax. Verify current rates and requirements with a local attorney before purchasing.

Miami's Premium Pricing Means Yield Compression Is the Trade-Off for Appreciation

Miami is fundamentally a premium market. The median 3-bed house price of $750,561 sits well above the Florida state median of $455,850 and nearly triple the national median of $260,430. The long-term rental gross yield of 4.7% compared to the national median of 4.9% reflects this pricing dynamic: higher entry prices compress yields even when rents are strong at $2,920 per month (versus the state median of $1,952). Investors buying in Miami are typically making an implicit bet on capital appreciation alongside rental income, rather than optimising purely for cash flow.

That trade-off is worth understanding clearly. Markets with lower entry prices elsewhere in Florida can offer substantially higher gross yields, but they may lack Miami's demand depth, international tenant pool, and long-run price appreciation trajectory. The dashboard shows all 79 ZIP codes across Miami-Dade, so you can compare individual neighbourhoods rather than relying on county-wide medians. West Palm Beach Short-Term Rentals Gross 47% More, but Costs Nearly Erase It Fort Lauderdale Short-Term Rentals Gross 58% More, but Costs Narrow the Gap

For a deeper understanding of how these figures are calculated, see our market score methodology and data sources documentation.

Data reflects market conditions as of April 2026.

This information is for educational purposes only and should not be considered financial or legal advice. Regulations and market conditions change frequently. Verify current rules with local authorities before making investment decisions.