In order to make your real estate investment a success in Miami, there’s some prep work you need to do. Most importantly, you need to learn about the 6 key factors to consider before investing in Miami real estate!
Financing your investment
The first of the factors to consider before investing in Miami real estate is how you are planning to finance the purchase. Miami is not the most expensive city to invest in real estate. This means that you do have more options than you’d have in a city as expensive as, say, New York. However, it still doesn’t mean that you can approach the topic casually! At the very least, you need to sort out your finances properly. Even if you have enough money to buy a property outright, should you? Does it hurt your finances in any way? Would you have to suffer through an awkward period of waiting for your next paycheck? If yes, then it’d be better to consider taking out a mortgage anyway! At least you can handle all your expenses easily that way. Without having to worry about unexpected expenses, too.
The kind of real estate investment you actually want to make
Now, another of the factors to consider before investing in Miami real estate is what sort of real estate you want. And by that, we primarily mean the following: residential or commercial? Residential real estate entails properties you can live in or rent out. Meanwhile, commercial real estate touches upon buildings such as warehouses, office space, etc. Both have plenty to recommend them when thinking about an investment. However, you have to be aware of both the price difference and the work they require you to put into them. A commercial real estate investment is typically more expensive, and it’ll take more work to manage. Even if you’d prefer not to, we recommend you get a good real estate agent to help you out if opt for this route. Commercial real estate is, however, popular in Miami since the profit you can earn by renting it out is considerable.
The location of your investment property
You have to remember one thing: there’s a lot you can change about a property, but there’s nothing you can do about its location! This means that picking out where in Miami you want to make an investment is crucial. Typical concerns are local amenities, such as parks, shops, transportation hubs, etc. As well as how nicely positioned a neighborhood is to let you access key city areas and get to work quickly. Local services are also important if you are looking for Miami movers and similar services to help you, you want to join forces with specialists. In Miami, there’s an additional concern: do you invest in an area popular with tourists, or away from these areas? Choosing the former means you’ll need to pander largely to tourists, while you’d be focusing on businesses and locals with the latter. Of course, location also impacts the price of properties.
New vs. old construction investment
An extremely important thing to consider when looking to invest is whether you want to buy an existing building or invest in new construction. Now, in some cities, this would be a non-concern due to a lack of new construction. Miami does offer a lot of decent options, and the bustling local economy and the city’s expansion mean that you won’t be forced to buy an existing build if you don’t want to. New construction investment, if you get in on it early enough, can also frequently be cheaper than the alternative. A fresh building also means you can really focus on home décor and improvement to your heart’s content! However, there is the fact that you can’t really discern the quality of the build ahead of time. So, if you prefer certainty, you might want to go with an existing building anyway.
The condition and valuation of the property
The condition and valuation of the property are extremely important before you commit to an investment. Do not allow yourself to be taken in by a property that seems okay, just to realize it requires a ton of repairs and renovations to make it usable! This is why you always need to insist on a property inspection and valuation ahead of time. The valuation itself will also affect a ton of things for you as well. Things such as the listing price, taxes, and even the insurance costs for the property all depend on its valuation. Both the condition and the valuation of the property can add sudden costs to your investment. And even if you are planning to use the property yourself, such sudden expenses can break your budget and make your move or investment untenable.
Your future plans with the property
The final factor to consider before investing in Miami real estate is what you plan to do with the property. We touched upon this briefly when we talked about the type of property you want to buy. There are really three options you can choose from: using the property yourself, renting it out, or selling it. If we are being completely honest, in Miami, the best real estate investment results are achieved by renting out the property. Rentals are just an amazing way to make good money in Miami, both because of the many businesses in the city and its bustling tourism industry. Of course, your intentions will strongly impact the ‘ideal’ property for you to invest in. For example, if you plan to sell, you need a property you can improve at a reasonable price so you can actually turn a profit.
The best real estate investment for you and your future
If you properly take into account the 6 key factors to consider before investing in Miami real estate, we are sure you’ll be able to turn a profit! Just remember to be careful, and always make sure the property is actually what it presents itself as. Fixer-uppers are almost always a money drain instead of a profit.