Buying real estate in Miami is an excellent investment opportunity for many compelling reasons.
Trends do not look favorable, in the short term, for the Italian real estate market. Which is why many Italians are looking for similar investment opportunities abroad, especially in an economically stable country such as the United States.
Some of the reasons to invest in Miami are:
- Location and climate.
- Being an international tourist attraction and a refuge from colder climates results in high demand for second homes.
- Immigration from South America translates into high demand for first homes.
- Strong commercial appeal: Miami is a large US financial center (after NY) and is home to many companies that use it as a springboard to South America and the Caribbean. It is also an important commercial port and aviation hub for Central and South America.
- Favorable Euro to Dollar exchange rate.
- Highly profitable residential real estate market.
- Purchasing real estate in the South Florida market is affordable and the process is simple.
- Market trends continue to indicate growth in the near term.
- Low investment risk as another economic crisis in this region of the magnitude experienced in 2008 in very unlikely.
- Diverse investment opportunities for properties of all types and intended use (condominiums, detached houses, plots of land to be developed, whole residential and commercial buildings).
- Highly active market.
- Financing is easily available given the stability of the market.
The Miami real-estate market is growing and very active.
The average prices Increased by 16.1% to $ 244,000, the highest point since 2008. The average price per sqf Exceed $ 305 for the first time in five years. The days That a property remains on the market collapsed to 58, the lowest level since 2008.
In the first quarter of 2014 there was the highest number of sales over the past eight years as the inventory of apartments begins to increase to to. The number of sales in the first quarter rose by 3.9% (5,133) over the same quarter last year and Represents the highest number of sales for the first quarter of the last eight years. The inventory of homes for sale grew by 13.2% (12,664) Compared to a year ago, as rising prices Caused the INCREASE in homes for sale on the market.
The normal sales market share Reached the highest rate of the last four years, ie 69.4%. The volume of short sale and foreclosure continues to fall.
In Particular, sales of apartments in the apartment block were up 2% Compared to the same period last year and the number of apartments for sale has Increased even faster (8,846 apartments for sale), factored That has Caused a decline in the rate of market absorption.
In detached houses Increased by 7.1% in the number of sales and 12.2% in the number of homes for sale.
In Particular in South Beach, the average price of the apartments sales grew by 19.6% ($ 355,000).
Most property is easily rented at market price, with some exceptions depending on the building category.
Skyscrapers and large buildings in South Beach, Miami Beach, Downtown, Brickell, Bal Harbor, Aventura and Sunny Isles with luxurious facilities (pool, gym, valet parking, security, lobby, etc.)
- Benefits: Professional tenants with stable incomes and credentials.
- Disadvantages: High condo fees (with rare exceptions)
- Investment target: From $ 250.000- $ 300,000.
- Potential return: 6-7% before management fees and property tax (3-4% net).
Art Deco buildings in South Beach: low-rise buildings, built in the ’20s,’ 30s and ’40s, that have recently been completely renovated.
- Benefits: Long-term rentals (one year) and low condo fees, higher investment yield.
- Disadvantages: Tenant rating slightly lower.
- Investment target: From $ 200,000.
- Potential return: 6-7% before management fees and property tax (4-5% net).
Shop for appreciation: favorable contingency determined by the INCREASE in property prices in the Miami area and the recent, albeit slow, recovery of available financing by banks. The loan to value (financing on the price of purchase) is determined by the building and property being purchased. Financing for foreigners can usually cover up to 60% of the purchase price.
Luxury buildings (from $ 1,5mil): is a more conservative type of investment. Such investments can be made in skyscrapers and large buildings in established areas such as South Beach, Coral Gables, Aventura, Brickell, or in the purchase of entire buildings and Art Deco villas.
Buying Pre-construction: These long-term investments are plentiful. There are over 40+ new skyscrapers under construction in the Miami area.
- Benefits: 10% payment upon booking and by a further 20% in installments, balance the deed; two potential high profitability to the constant growth of the market
- Disadvantages: Sorting and screening of new projects is key. Risks associated with the builder and the long term market must be thoroughly evaluated. Usually condo conversions of Art Deco buildings involve almost no risk because the demand is so high that these units are normally sold out “on paper”.
Buying property in the United States is simple, fast and cheap.
- A draft of the ‘Offer Purchase Contract’ is prepared by the National Association of Realtors – Florida, contains all the necessary contractual clauses.
- The seller can, if required, make a counter by changing some of the terms but once an agreement is reached this draft become the official ‘Offer Purchase Contract’.
- Deposit: an amount, generally between 5% and 10%, must be delivered by check within a few days and deposited into an escrow account held by the attorney (professional who replaces Italian Notary and is chosen by the purchaser). That amount will be held in escrow until closing.
- The buyer has upto 15 days to perform a technical inspection of the property. At this time, the buyer can lower the offer and reopen the negotiation or withdraw altogether.
- In case of purchase the seller must provide the purchaser with all the condominium documents (including rules and regulations). Within 3 days of receipt of this documentation, the buyer is entitled to withdraw detecting particular rules or restrictions not to his liking.
- Buyer enters the balance amount in the attorney’s escrow account.
- The lawyer does all the checks to verify that there are no outstanding service charges on the property and that the liens are paid
- Closing: only the seller needs to be present, the buyer can sign all documents and send them via email.
- The Title company commissioned by the lawyer prepares the instrument of transfer after the signature is recorded and becomes public (the register of property can be viewed online by anyone).
Fast: the entire processes takes between 1-2 months from an offer being made to closing.
Economic: the cost of closing, including the checks, is between 1.2% to 1.5% of the purchase price, with the exception of new buildings where the cost of closing is about 3% of the purchase price and includes developer fees. If there is a mortgage the mortgage registration fee is around 2% of the loan, which is in addition to the normal closing costs.