Buy Existing

If you want to use the property immediately or to see an immediate return on your rental investment, then the existing property market is the only way to go. A cash buyer or a buyer with financing already in place can close on the condo of their choice and take ownership in approximately 30 to 60 days.

Another reason for buying an existing apartment is that the buyer does not need any imagination. Everything about the apartment, its finished condition, the functionality of everything in the apartment and in the communal facilities, etc., the views, the management company's approach to owner satisfaction, and the association's accounts, reserves, etc. are all known. The development will also have a known history of rentals and vacancy rates if you want to own an income-generating apartment.

It is also easier to arrange financing on an existing apartment since the lender has equal access to the same facts, some of which it will use to determine whether it will lend to a prospective buyer.

Buy Pre-Construction

This is a longer-term process and may require more cash. The developer's reputation and their own financial backers influence the residential lender as far as providing a pre-construction loan. The loan may be subject to a larger deposit than when buying an existing property. Once approved, the loan is then paid according to predetermined stages in the construction process.

It is valid to note that some developers will prefer a cash buyer for its pre-construction sales. This is because it is cheaper and quicker for them to sell to a cash buyer than to one who brings their own lender into the contract. Paying cash may also play a part in price negotiations.

An advantage of buying pre-construction in Miami is that developers want the cash intake to help fund the construction work. In return, the preconstruction price should be less than the finished price, especially if the project takes two or four years before completion. This provides an opportunity for the preconstruction buyer to make an early and substantial profit. This is especially true as the economic indicators point to a long-term positive real estate market.

Buying pre-construction has another benefit. The buyer will be getting a brand new apartment that has never been lived in. This is very important for many of our clients. The final finish can be customized to suit your own tastes. It is more complicated to upgrade an existing apartment.

A downside to buying pre-construction is that the developer will not permit any "mortgage contingencies." If at closing, the buyer can’t get a mortgage or come up with the cash to close, they will lose their deposit. Lenders of the developer don’t want to get to the closing table with a buyer only to find out that they don’t have the capacity to close!  

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"Miami'de İnşaat Öncesi Konut Satın Alırken Bilmeniz Gerekenler"

All those people at the building's sales office work only for the developer. They don't work for the buyer, no matter how nice they seem to be. The development sales team is looking to maximize profits to the developer and they have no real duty to a buyer. They may "forget" to tell you that a building will likely go up in front and ruin your view. Or, that a garbage transfer station is coming in next door. These things are very important to know. But, don't bet that the development team is going to give you a hint of any of this. Going directly to the developer to buy a condo is a bad decision although a lot of ill advised buyers get sucked in.

For the most part, the buyer's agent comes free of charge since their cost is already baked in to the numbers. While a buyer may think they are going to get a deal if they show up without a broker, they likely have little knowledge about the market and don't know what they don't know. This can be dangerous when entering one of the largest transactions of their life.  

A buyer's agent has two primary roles. The first is to use their detailed knowledge of Miami, its neighborhoods, and the properties available to give buyers detailed and valuable information. They know the good developers and the bad developers and will share this information with buyers, although will never publicize it.

As a result, the buyer will be fully equipped to make the highest quality decisions about what to buy, where to buy, how much to pay, and on what terms. You have your goals and preferences, your must-have, want-to-have, don't-want-to have, and must-avoid list. Armed with your list, your buyer agent will be able to help you evaluate every aspect of your decision-making. Every neighborhood, development, and apartment will be tested against your list. Only an experienced Realtor can do that effectively for you and your family.

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We have already covered Steps #1 and #2, so Step 3 is:

• Engage a successful, experienced, and effective negotiator as your buyer agent.
• Discuss in detail your goals, neighborhood, property preferences, and your budget options.
• Armed with all that, your agent will know exactly where to focus, and to set up appointments for you to receive comprehensive presentations which will be directed at how the developer and the apartments can meet your objectives.
• Once you have decided on a unit, your agent, working on your behalf, will be able to negotiate the best deal possible, prepare the contract to purchase, and receive your down payment. With that in hand, the contract is delivered to the developer's office for signing and communicating back to you. That, under Florida law, makes it binding.
• Your agent will communicate with the title agent or closing attorney form then on to ensure everything stays on track. That will include liaising with your lender if you have one to ensure all finances are in place for the day of closing. Your lender or bank will wire the final mortgage monies and any other amounts needed to the closing officer in good time. Florida closing officers tend not to accept checks on the day.
• As your luxury apartment nears completion, your agent will have contact names for you so they can provide all the interior decorations and furnishings you need.

A condo hotel is a development that usually has condo-style apartments, but which operates as a hotel. Owners of an apartment have a deeded property which is theirs to live in but which may be rented out to hotel guests when it would otherwise be vacant. Some premium developers are merging private apartments with hotel suites to deliver a luxury lifestyle, high quality amenities, supported by a strong brand image and good management.

The Pros of Owning a Condo Hotel Apartment

By looking on their apartment as a vacation home rather than a full-time primary residence, owners have a home with full management maid service and housekeeping, and with first class public facilities such as pool, spa, fine dining, a business center, possibly upscale shops, etc.

The owner and hotel management agree on how much time they are likely to be in residence, and how often it can be rented out. Owners receive a portion of the rental income.

The Cons of Ownership

Firstly, they are not always considered proven investments by some lenders. Some earlier developments were known to sell the property to a different branded hotel group after some years. This can have a negative impact on guest rental income. Having your attorney go through the small print to clarify what the developer or management company may and may not do in the future is a safe way to proceed.

Owner occupancy availability is limited, unless you own in a development that has totally separate hotel suites because the hotel wants to capitalize on its guest income.

Guest income is dependent on the hotel's marketing and reputation and how well other hotels compete for the market share. There is, therefore, no control over income. Neither can owners control the expense side of the ledger.

Maintenance fees and property taxes tend to be higher than for a regular apartment building because of the high number of short-term guest visits, and the built-in management fee.

Because of their history, banks tend not to provide mortgages to investors.

More people traditionally want to own an apartment in a condo development so the potential resale market may be limited should an owner decide to sell their apartment, again, unless your condo apartment is separate from the hotel suites.

Condo hotels do exist in Miami. W Hotel and Residences South Beach is a perfect example of a modern condo hotel development. But, most most miami beach condos are not condohotels. Should you want to explore this redesigned condo hotel concept we will be delighted to tell you more and to represent you as your buyer agent.

Resale Property

It is a transparent market, so determining market value is straightforward. Resale properties are listed for sale in the Miami MLS (Multiple Listing Service) managed by the Realtor Association of Greater Miami and the Beaches. This gives us not only details about each property currently on the market, but how long it has been listed, what price changes it may have had, etc. The MLS also gives us ready access to properties that are under contract but not closed, and all recently closed properties with the actual price they sold for. County records can take a month to update their records. Armed with this, and the accompanying details about each apartment we can calculate accurate market valuations, and advise our clients what a sensible offer price would be when buying apartments for sale in Miami.

Yeni Geliştirme

Some new developments are listed on the MLS in the same way. If not, then we will know what price changes there may have been as each phase was completed and sold. Buying as soon a phase is available usually means our clients get a better price.

Another reason to engage an agent as soon as you begin to think about an investment means they can be of more use to you. The sooner we know about our buyers goals and timescale, the more we can keep them in the loop on what is happening in developments they may be interested in.

An experienced broker usually has an excellent network of contacts, often learning first what may be in a developer's marketing and pricing plans before they are officially made public. The sooner a broker knows about a project, the more valuable a broker they can be to a buyer. 

For both new development and resale properties, an experienced broker will know the backstory about how well established the developer is, how financially stable the management company is, how well-funded the reserves are, how well the property is built (based on the developer's and contractor's past record), and how well the property is maintained. An experienced broker will use all this detail to assess the market value, what a good opening offer price might be, and what the ultimate closing price might be. To some buyers, terms and conditions may be the most important items to negotiate, that is why we always engage an attorney for our clients. 

While we act as your buyer agent, we always recommend our clients have the final contract drawn up by a specialist real estate attorney. Multi-million-dollar investments are important transactions, and so we want an attorney to protect our client's interests once we get to the contract stage.

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"Miami Apartments For Sale Are Much Less Expensive Than Other Global Cities"

Our overseas clients often ask this question. Firstly, it is good to know that the US views foreign property owners in the same way it does domestic investors. There are, therefore, no restrictions such as extra stamp duty as there are in many other countries.

The real estate broker's fee is covered by the seller, so our services are as free to you as they are to all our domestic clients.

Some lenders have additional borrowing conditions such as a lower loan to value amount, but we will happily connect you with a US-based bank. The majority of our clients choose to work with HSBC or Citi Private.

We manage the entire process and liaise with lenders, sellers' agents, title agents, attorneys, etc. Many of our clients are out of town or out f country, so we are used to this part of client service. It also helps that we transact business in several languages. Hablamos español, y falamos portuguese, e noi parliamo italiano.

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"Tax and Legal Issues for Foreigners Buying US Real Estate"

"Yabancılar ABD'de Mülk Satın Alabilir mi?"

Firstly, foreign owners are treated the same as domestic owners as far as most taxes are concerned. Florida does not have a state income tax, so property taxes tend to be a little higher in terms of tax property rate than in some other states. That said, prices in Miami are a third or half of that of New York City which mitigates the total cost. Also with all the tax write-offs available for investor-owners, many pay no income tax at all on their rental income for 10 to 15 years after taking ownership.

Primary residential property owners may "homestead" their home. Homesteading has three benefits. Up to $50,000 of the property's taxable value will not be subject to property tax, there is a limit as to how much property tax rates can increase in any given year. This cumulative limit can have a substantial benefit over the years. The third benefit is that the homestead accumulated limit can be transferred to another primary residence should you decide to sell and buy elsewhere in Florida

As a minor point, Florida discounts the property tax due by up to 4% for paying "next year's" amount by the November of "this year." A dollar saved is a dollar earned.

Many foreign investors ask their attorney to set up an overseas corporation in an appropriate country, so the income on the property, etc. can be avoided. We advise our clients to seek advice from their own country's tax specialists, so they minimize all tax liabilities.

Condo sales are subject to Federal capital gains tax (CGT) on the sale profit. Federal law does, however, enable sellers to fully defer any CGT by using the 1031 Exchange process and buying another approved property in a pre-determined timeframe. 1031 Exchanges have a specific set of steps to follow, and your attorney will ensure all is completed accordingly, and the CGT will be deferred until there is a final sale, should you decide to liquidate and not buy another property.

A foreign owner who sells will have 15% of the sale price withheld until the Internal Revenue Service (IRS) is satisfied that all due taxes are paid. The remaining amount is then refunded.

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"Miami Lüks Emlak Vergisi Hakkında Bilmeniz Gereken Bilgiler"

This is often one of the later questions our clients ask as we begin the search for their new high-end condo. So many of our clients live out of state that they want to know their investment is in safe hands throughout the year.

We have a "light property management service." We also have a full property management service via a local Miami partners. We will:

Market your property, comprehensively, to find you the right tenant on the right terms and at the right rent amount for your property. We fully screen tenants (not simply run a credit check) then prepare the lease documents. We also handle lease renewals and terminations.

Condo associations also screen tenants, so we assist with the condo board application package, to make sure everything goes smoothly and quickly, so you have minimum vacancy time.

Repairs and maintenance are important, so we have an approved team of contractors to handle any eventuality. We also have an effective system to deal with emergencies.

From start to finish, we keep both our clients and their tenants fully in the loop, so no one ever needs to wonder what is happening or what may happen next.

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