Structuring a Rental Investment in Miami: A Real-World Guide for Foreign Investors

Table of Contents

1. Introduction
2. Choosing the Right Legal Structure
3. Taxes You Can’t Ignore
4. ROI: Short-Term vs Long-Term Rentals in Florida
5. Multifamily or Single-Family? Picking Your Path
6. Miami vs West Palm Beach: Which Market Wins?
7. Financing Options for International Buyers
8. Inspections and Due Diligence: The Silent Negotiation
9. Property Management: Your Local Lifeline
10. Final Thoughts

1. Introduction

Miami isn’t just beaches, nightlife, and flashy condos—it’s one of the busiest real estate markets in the U.S. For foreign investors, especially those coming from Latin America, the city has become a favorite place to park dollars, protect wealth, and generate rental income.

But here’s the catch: buying a property doesn’t automatically mean you’ll see strong returns. How you structure the investment—from taxes to property management—matters as much as the property itself. A good plan can set you up for steady income; a sloppy one can turn into late-night calls about leaks and lawsuits.

This guide looks at the real steps: why legal structure matters, how taxes quietly eat into ROI, the battle between short-term and long-term rentals, and whether Miami or West Palm Beach makes more sense for your money.

2. Choosing the Right Legal Structure

Most international buyers ask the same question first: “Should I buy under my own name or set up an LLC?”

In the U.S., the LLC often wins. It shields personal assets if something goes wrong, allows you to deduct many property-related expenses, and makes reporting to the IRS a little cleaner. (IRS – Topic No. 414: Rental Income and Expenses)

Buying in your own name is legal, yes—but riskier. If a tenant sues over an accident, your personal wealth is on the line. An LLC, by contrast, works like a legal firewall.

3. Taxes You Can’t Ignore

​Plenty of investors focus only on the rent check and forget about the tax bill that comes later. In Florida, here’s what you’re really dealing with:

• Federal level: Rental income is taxed, and if you’re a foreign owner, sales are subject to a 15% withholding under FIRPTA. (IRS – FIRPTA Withholding)
• State level: Florida is famous for not having a state income tax—huge compared to New York or California. (Florida Department of Revenue)
• Local level: In Miami-Dade, property taxes average between 1.5% and 2% of the assessed value, depending on where the home sits. (Miami-Dade Property Appraiser)

Miss any of these numbers, and your “great deal” might not look so great anymore.

4. ROI: Short-Term vs Long-Term Rentals in Florida

The Airbnb dream is tempting: higher nightly rates, steady tourism, and lots of potential. And yes, in Miami Beach, short-term rentals can outperform traditional leases—if you do it by the book. Tools like AirDNA and Airbtics show strong occupancy and ADR data for 2024–2025.

But the flip side? More turnover, heavier management, and regulations that vary by neighborhood. In fact, some areas of Miami Beach ban short-term rentals outright. (Miami-Dade County) · (City of Miami Beach)

Long-term rentals, meanwhile, are less glamorous but more predictable. RentCafe reports average Miami rents above $3,200, providing consistent monthly income with fewer headaches. Think of it as steady cash flow versus chasing higher peaks with more work.

5. Multifamily or Single-Family? Picking Your Path

This choice is more than a numbers game—it’s about personality.

• Multifamily: More doors, more tenants, often better cap rates. A triplex in Little Havana, for instance, spreads risk because one vacancy won’t sink your cash flow. Marcus & Millichap – 2025 U.S. Multifamily Investment Forecast
• Single-Family: Easier to buy, easier to sell, but yields are getting tighter as prices outpace rent growth. ATTOM – 2025 Single-Family Rental Market Report

Recent Florida reports peg multifamily cap rates around 5.5% in mid-2025, slightly above national averages. (Largo Capital)

So the real question is: do you want simplicity and liquidity, or scale and stronger returns?

6. Miami vs West Palm Beach: Which Market Wins?

Two cities, an hour apart, and two very different markets.

• Miami: The glitzy hub with global demand. Condos downtown average $600,000, and rents top $3,200 in Brickell. You’re paying for prestige, liquidity, and international attention. (RentCafe – Miami Rentals)
• West Palm Beach: More affordable but quickly catching fire. Average rent is about $2,600, and prices are lower, making it attractive for those priced out of Miami. The influx of finance and tech firms has also boosted long-term rental demand. (RentCafe – West Palm Beach Rentals)

In short: Miami is for investors chasing prestige and global exposure; West Palm is for those eyeing better ROI relative to capital invested.

7. Financing Options for International Buyers

Foreign buyers can get loans—it just comes with strings attached. Expect:

• 25–40% down payments.
• Higher interest rates than U.S. citizens.
• Proof of reserves (3–6 months of payments).

The upside is you free up capital for more deals instead of tying all your money into one property. Some banks even offer mortgage products specifically for non-residents. (The Federal Savings Bank – Foreign National Mortgage).

8. Inspections and Due Diligence: The Silent Negotiation

Inspections don’t make for glamorous stories, but they save money.

Take María, a Colombian investor. On paper, her Miami condo looked perfect—until the inspection uncovered plumbing issues. That gave her leverage to shave $15,000 off the purchase price.

The National Association of REALTORS® reminds buyers that inspections can uncover thousands of hidden problems. Skipping one is like gambling blind. (NAR – Home Inspections).

9. Property Management: Your Local Lifeline

​Managing a rental from abroad sounds easy—until the A/C breaks in July or a tenant misses rent. A solid property manager handles:

• Tenant screening
• Rent collection
• Repairs and emergencies
• Clear financial reporting

For foreign investors, property management is not a luxury—it’s survival. Groups like the National Association of Residential Property Managers (NARPM) advise working with accredited firms to keep risks low. (NARPM).

10. Final Thoughts

Setting up a rental investment in Miami is not just about picking the right condo. It’s about structure—legal, fiscal, financial, and operational. Do it well, and you’ll see stable income, capital appreciation, and peace of mind. Do it poorly, and you could be stuck with lawsuits, tax surprises, and stress calls across time zones.

At Binter Real Estate, we’ve seen both sides of the story. Our job is to make sure international investors get the good one: a property that performs on paper and delivers in real life.

Read More