Reading a Florida Investment Deal
Updated September 2026
Most listing sheets for rental property in Miami-Dade are written to make the deal look like it works. Some deals do. The way to tell is to rebuild the numbers yourself, line by line, using your costs rather than the seller’s. This is how we read one.
Why is gross rent a starting point, not a result?
The first number on the sheet is gross rent: what the units bring in, or what the agent says they could bring in, before anything is paid. Net operating income (NOI) is what is left after operating expenses and before the mortgage. Every return metric that matters is built on NOI, so every mistake in the expense lines flows straight into the return you think you are buying.
Ask for the actual leases and the last twelve months of rent collected, not a projection. If a unit is vacant, use the rent a comparable unit actually leases for, not the top of the range.
The expense lines that are real in Miami-Dade
Property taxes reset when you buy. This is the line that breaks the most deals. Under Florida law, homestead property is reassessed at just value as of January 1 of the year following a change of ownership, and non-homestead property (which is what a rental is) is reassessed the same way; the 10% annual cap on non-homestead assessments only starts running after that reset. The seller’s tax bill reflects years of capped assessments. Yours will reflect your purchase price. Run the county’s tax estimator on the price you are paying, not on last year’s bill.
Insurance. Wind, and in many areas flood, are priced on the specific building: roof age, opening protection, construction, flood zone. Florida Statute 627.7011 lets insurers require a roof inspection once a roof passes 15 years, and a roof with under five years of remaining life can make the building hard to insure at all. Get a real quote on the actual property before you write, and read our flood, windstorm and roof insurance guide for what carriers look for.
Association dues. For condos and townhomes, the monthly amount is only part of it. Ask for the budget, the reserve schedule, any pending or recent special assessments and the milestone inspection status. The HOA vs condo association guide explains what each type controls and what it can charge you.
Vacancy, repairs and management. No unit is rented every day of every year, nothing lasts forever, and unless you plan to answer the phone at 2 a.m., someone will be paid to. Put a line in for each. If the seller’s sheet has zeros on any of them, the sheet is not an analysis.
| Expense line | Use this, not the seller’s number |
|---|---|
| Property taxes | The assessment at your purchase price — non-homestead property resets to just value the January 1 after a sale, and the 10% cap only starts after that |
| Insurance | A current quote on the actual building: roof age, opening protection, construction, flood zone |
| Association dues | The budget, the reserve schedule, pending or recent special assessments and the milestone inspection status |
| Vacancy | A line, never zero — no unit is rented every day of every year |
| Repairs | A line, never zero — nothing lasts forever |
| Management | A line, unless you plan to answer the phone at 2 a.m. |
Cap rate and cash-on-cash, defined
Capitalization rate is annual NOI divided by the price. It ignores financing entirely, which makes it useful for comparing two buildings and useless for telling you what lands in your account. A cap rate quoted on the seller’s expenses is not the cap rate you are buying.
Cash-on-cash return is annual before-tax cash flow, after the mortgage payment, divided by the total cash you put in (down payment, closing costs, immediate repairs). This is the number that describes your actual year. It moves with your rate, your down payment and your rehab budget, so two buyers can get different cash-on-cash returns on the same building.
DSCR loans in one paragraph
A debt service coverage ratio loan qualifies the property instead of the borrower. The lender divides the property’s net operating income by the annual debt service; a ratio of 1.0 means the rent covers the payment exactly, with nothing left for vacancy or the owner. Lenders set their own minimum ratios, rates are higher than on an owner-occupied loan, and the appraiser’s rent opinion is what gets used, not the listing’s. It is a real tool for investors with complicated tax returns. It is not a way to make a thin deal thick.
Short-term rental rules vary by city and by association
Do not underwrite a Miami-Dade property on nightly rates without confirming three things. First, the jurisdiction: unincorporated Miami-Dade requires a Certificate of Use before a vacation rental (a stay under 30 days) is even advertised, renews it annually, limits occupancy, and in estate and low-density residential zones requires the responsible party to live at the property more than six months a year. Properties inside a city, from Miami to Miami Beach to Hialeah, follow that city’s own rules, which can be stricter. Second, the association: condo and HOA documents routinely set minimum lease terms that make short-term rental impossible regardless of what the city allows. Third, the taxes and state license, which apply on top of everything above.
Two tools before you write an offer
If you intend to live in one of the units, run the purchase through the affordability tool with the real tax, insurance and association lines, and read the homestead exemption guide: the exemption and the Save Our Homes cap apply to the unit you live in, which is one of the few ways to keep the tax line from resetting on the whole building every time it changes hands. If you will not live there, the mortgage calculator will at least keep the debt service honest.
A deal that survives your numbers is worth pursuing. A deal that only survives the seller’s is a listing.
Sources
- Florida Statute 193.155, homestead assessment cap and reassessment at just value after change of ownership: https://www.flsenate.gov/Laws/Statutes/2025/193.155
- Florida Statute 193.1555, 10% cap on non-homestead property and reassessment after change of ownership or control: https://www.flsenate.gov/Laws/Statutes/2025/193.1555
- Miami-Dade Property Appraiser, Save Our Homes: https://www.miamidadepa.gov/pa/benefit/save-our-homes.page
- Florida Statute 627.7011(5), roof age and insurability: https://www.flsenate.gov/Laws/Statutes/2025/627.7011
- Capitalization rate, definition and formula: https://en.wikipedia.org/wiki/Capitalization_rate
- Cash-on-cash return, definition and formula: https://en.wikipedia.org/wiki/Cash_on_cash_return
- J.P. Morgan, “What is debt service coverage ratio (DSCR) in real estate?”: https://www.jpmorgan.com/insights/real-estate/commercial-term-lending/what-is-debt-service-coverage-ratio-dscr-in-real-estate
- Miami-Dade County, Short-Term Vacation Rentals (unincorporated county rules): https://www.miamidade.gov/global/economy/neighborhood-compliance/residential-short-term-vacation-rentals.page
Frequently asked
Why do property taxes go up when I buy a rental in Florida?
Because non-homestead property is reassessed at just value as of January 1 of the year following a change of ownership, and the 10% annual cap on non-homestead assessments only starts running after that reset. The seller's bill reflects years of capped assessments; yours will reflect your purchase price. Run the county's tax estimator on the price you are paying.
What is a good cap rate in Miami?
The one computed on your expenses, not the seller's. Cap rate is annual net operating income divided by price; it ignores financing, which makes it useful for comparing two buildings and useless for telling you what lands in your account. A cap rate quoted on the seller's tax bill and a zero vacancy line is not the cap rate you are buying.
What is a DSCR loan?
A debt service coverage ratio loan qualifies the property instead of the borrower: the lender divides net operating income by annual debt service, and a ratio of 1.0 means the rent covers the payment exactly. Lenders set their own minimum ratios, rates run higher than on an owner-occupied loan, and the appraiser's rent opinion is what gets used. It is a real tool for investors with complicated tax returns, not a way to make a thin deal thick.
Can I run a short-term rental on an investment property in Miami?
Confirm three things first. Unincorporated Miami-Dade requires a Certificate of Use before a vacation rental (a stay under 30 days) is advertised, renews it annually, limits occupancy, and in estate and low-density zones requires the responsible party to live at the property more than six months a year; cities from Miami to Miami Beach to Hialeah have their own, often stricter, rules. Condo and HOA documents routinely set minimum lease terms that make short-term rental impossible regardless of the city. And the taxes and state license apply on top.