Investing in Miami luxury real estate is a tempting option for investors and high net worth individuals alike, but it’s also an opportunity that is full of risk. Miami has seen booms and busts in recent decades, especially in new condominium development, leaving even the city’s hottest neighborhoods potentially full of bad investments that look good on the surface. Buyers looking for high-end Miami residential real estate should rely on the advice of an experienced Florida luxury real estate broker and keep these tips in mind as they begin the search for the right investment property.
1. Define “Luxury” With Your Broker
In today’s Miami real estate market, the amenities that are considered luxuries in other markets come standard in many developments. Features like pools and spas, security systems, integrated technologies, and other comforts may seem like luxury from a distance, making many properties seem exactly alike. But, careful due diligence is required to ensure the price tag of the residence matches the quality of what’s inside, and the long-term potential for return on investment. It’s not just about the address or the neighborhood; we have seen property values vary widely from floor to floor in the same building
Plus, it’s possible that location and amenities aren’t what luxury means to some buyers. The meaning of luxury is different to everyone, but each individual knows it when they see it. Exclusivity, privacy and high service levels are increasingly considered a must for the luxury buyer. Of course, this is in addition to superior materials, amenities and furnishings. This is why it’s essential to discuss your ideal property with your broker. That will give them the highest possible chance of finding your gem among the many luxury real estate listings in Miami.
2. Plan for the Purchase
Regardless of whether you’re looking for a single-family home or a condo, financing for luxury real estate transactions often takes a bit longer to secure. This is not only because of the high dollar amount, but also often because a luxury real estate broker can sometimes have access to a number of bankers who will be able to help their high net worth individuals secure more competitive financing rates or terms. Owners or developers selling luxury real estate in Miami usually only take time to show the property to qualified buyers and offer nothing else. This is why it’s usually advised that a luxury real estate shopper secure financing before they begin the search for a property. It’s also advisable to consult with a tax expert about the potential ramifications of a luxury real estate purchase, especially for foreign buyers. Our agents are well versed in each of these aspects, so it’s best to talk with us first so we can introduce you to the right team of bankers and CPAs.
3. Rely on Your Experienced Broker for Advice
Often, buyers will be so enamored with a new project’s glossy brochures and websites rather than the actual track record of the developer and sales team involved in the project. Buyer’s might also be turned on by an artificial low price per square foot than what is current market rate. They might also follow their friends and family blindly and purchase in the same building in a herd mentality.
When buying a property in a resale or new development, it’s important to ask the advice of your real estate agent. If they don’t already know the developer’s track record first hand, have them check it out. Our experienced Miami agents know all the major Miami players, and can guide you from the poor or merely acceptable construction to the extraordinary. You might have to pay 10% more for the extraordinary property, but you won’t experience the construction defects that many other buildings will show after a few months or years.
4. Know What Comes Next
Sometimes the search for an ideal luxury investment property in Miami is so time-consuming that when the market shifts, owners may not know right away it’s a good time to sell. Understanding the cycles of the market and selling at the right time will maximize profits. Others who are looking to be landlords for the long term may need to make minor aesthetic improvements to maximize rental income. In all cases, your agent should have the wisdom and industry connections to guide you in the right direction.
At Manhattan Miami, that’s what we’re all about. We aren’t just focused on helping high net-worth individuals buy residential property and then disappear. We are in it for the long haul, helping our clients love their purchases, value their purchases, and ultimately gain the most profit possible from their investment.