While not all-encompassing, this is a quick digest of initial considerations for purchasing in current market Miami. It is comprised from most common misperceptions by out of state and international buyers.
#4 Reality Price Check
The popular budget target of $250,000 does not buy the modern interiors, amenities and zip code many have in mind. Typically at this price point or less, the property or unit is smaller in square feet, older, possibly renovated as well as has fewer or no amenities and is in an upcoming neighborhood or not as desirable an area. As of Q4 2016, the average sales price in Miami is nearly $400,000.
#3 Don’t Fear Fees
In many cases, HOA (homeowners association) fees are nearly same as separate maintenance costs when totaled. Condo associations can be ideal for absentee owners as there is typically onsite property management to handle repairs, grounds upkeep and more. Many single family home communities have association regulations and fees too.
#2 Adjust ROI Expectations
For Miami investment property in a single unit for rental, the average cap rate is 4 - 5%. Factor property taxes, HOA/maintenance fees, insurance, utilities and rental fees (vacancy, broker’s fees, furnishing). Temper turnover and return expectations from Airbnb; on Miami Beach as of 2016, there is a fine of $20,000 for first-time violator of short-term rentals (less than six months and one day) in condo buildings and banned altogether for single-family homes. For transient rentals, owner’s must adhere to regulations: ensure it is legal for property location, submit appropriate business and resort tax receipts, and show proof condo association allows. Additionally for those seeking a coastal/waterfront purchase, flood insurance premiums will increase.
#1 Select One Realtor
Unlike other cities where multiple real estate agents may be used for their different property accesses, only one agent is needed as a partner for all aspects of the process in Miami as the MLS (multiple listing service) access is reliably used by all licensees in this market. Find a licensed, reputable realtor or broker you have rapport with to represent your preferences, negotiate on your behalf, and follow through on your requests. They provide value in recommending areas, giving referrals, and understanding your financial objectives to assign the buy and timing appropriately for wealth building, investment income, or trophy purchase. Aside from being knowledgeable, also select someone well-networked with contacts for inside information on properties, priority for new development better pricing, access to exclusive previews, and a pulse of local market and external factors, for example high vs. low season and economic conditions.
Please contact me for more details, data and deeper insights.