What are the current real estate market trends in Florida?
Currently, the market is observing a tendency for investors to target projects under construction or pre-construction, where they can enter with an initial payment and then pay through agreed payments according to the progress of the work. We can also observe a beginning of change in relation to the sale prices of used properties, which in the last 3 years showed a clear upward trend. In the last 9 months, values in different areas of Miami are experiencing a slight cooling, which makes the plaza attractive again for those buyers with the intention of optimizing their capital.
What factors influence the Florida real estate market?
Today, the Miami real estate market is in great shape thanks to the constant investment of different business groups, investment funds and various developers who are committed to the continuous growth of the city throughout its surroundings. Areas such as Downtown, Brickell, Edgewater, Midtown or Wynwood, to name a few, are overcrowded with new construction and land with signs announcing future construction, which in turn allows for the full development of road, electrical, sewage infrastructure and constant improvements. for the common well-being of current residents and future residents in the face of the emergence of these new projects. At the same time, the growing demand for units suitable for temporary rental has reconsidered the need to build buildings that enable this quality, since Miami has become the epicenter of visits from all over the world, not only for its beaches, shopping malls and various attractions, but also for the arrival of Leo Messi at Inter Miami, the confirmation of the city as the headquarters of Formula 1, the Masters 1000 tennis tournament (one of the most important tournaments of the year, after the Grand Slam), the upcoming musical events such as Ultra and in the medium term, the headquarters of the Copa América soccer tournament in 2024 and the World Cup in 2026. These are sufficient reasons to choose Miami and its surroundings as an investment option.
How does the Florida real estate market compare to other real estate markets in the United States?
In the first instance, the real estate market in Florida has always been attractive to foreign investors from all over the world, as it has turned out to be a safe and sustainable bet over time. Since the great change that the COVID-19 pandemic generated for the entire world, many renowned companies located in other parts of the United States began to migrate to this state due to the tax conditions it offers. Furthermore, the employees of these firms themselves, motivated by the influx of remote work, prefer to be in a place where recreation, climate, and daily life are more enjoyable. That is why Florida is positioned within the country as one of the epicenters in demand for properties both to buy and to rent. The value per square foot is extremely lower than states like California and New York, as well as the cost of living, taxes, food, fuel, among others. Recent statistics show that cities such as San Francisco (California), Manhattan (New York), Boston (Massachusetts) and Seattle (Oregon), to name a few examples, are having negative values in terms of the arrival of new inhabitants due to their high costs. , the opposite situation to what happens in Miami.
What are the best areas to invest in real estate in Florida?
Today, I can highlight Aventura, Bay Harbor Islands, Sunny Isles Beach, Fort Lauderdale and Hollywood. All of these places are located in the northern area of downtown Miami. There are promising new developments, recently opened and already occupied buildings, as well as a wide variety of residential buildings with great features and an excellent offer of recreational and leisure activities. These places are close to the beach and have access to highways and connecting roads throughout Miami-Dade County.
On the other hand, Orlando and its surroundings are another area of Florida where investment opportunities for a secure income are interesting. The fact that it is the city with the most visitors in the world (as it is home to Disney World, Universal Studios and so many attraction parks) makes this city a true option for those who want to invest and capitalize on their assets.
What types of properties are the most profitable to invest in in Florida?
Everything will depend on the risk that the investor wants to take and the capital that he is willing to invest. Residential properties, if chosen for long-term rental (contracts in the USA are for 1 year, with the possibility of renewal), leave an average of between 4.8% to 5.3% annually in dollars. If the investment aims at a mix between temporary rental and personal use, depending on the season, that percentage can improve up to 7.5%. In both cases, the ideal scenario for the investor is to appoint a property manager for his security and peace of mind.
Another attractive investment is the purchase of a Multi-family, which is a property with several units (generally more than 4) and which are oriented exclusively for immediate rental. In these cases, the income is around 6% annual average in dollars. In the United States, it represents 50% of the investment in Real Estate in the entire country.
To close, I add the alternative of purchasing in pre-construction (or in well, as it is called in Argentina), since as I said previously, they allow a staggered payment format, closing the list price at the beginning of the operation and observing a recapitalization. In this way, profitability is generated over the duration of the work, since the value of the unit increases as construction progresses.
Nahuel Cuburu
Real Estate Specialist.
TEL: +54 9 1140728983 / +1 (786) 896-6731
EMAIL: [email protected]
IG: @ncubururealestate
by CEDOC