Keys to Invest in the Other Miami: Far From the Beach

Keys to Invest in the Other Miami: Far From the Beach

The working middle class is a target that seduces by reasonable prices and demand for rent; where are the opportunities, what areas grow and what are the expenses.

Miami Continental and surroundings, offers good opportunities for those who are in the search to invest in buildings of working middle class. What to keep in mind before buying?

The zones

Broward County – North of Miami Dade – is where the greatest opportunities are presented today. It covers cities such as Sunrise, Plantation, Tamarac, Miramar, Pembroke Pines and Coral Springs, where you can find real estate from US $ 100,000 or town houses that start at US $ 150,000. “Sunrise is a city where commerce is increasing, businesses are going to that city, and there are new developments both commercial and housing,” says Alejandro Tesone, broker and owner of In Motion Realty. There there is construction of new units with which, speculates, the price of the average property will go up. A new condominium is sold for US $ 40,000 and rented at US $ 1500, with expenses ranging from US $ 260 to 350 per month, depending on amenities. Victor Taurizano, broker of Novus Realty LLC, agrees with the same area. In Broward, in the central strip between I75 and I95 there is a great demand for income, it is a stable and growing middle class area. “I like Davie, it has a stable economy, there are universities and the prices have interesting capital gains and good income.” Also in Miami Lakes, the new mall (Miami Dream) is being built, it will require thousands of jobs and the entire surrounding area. will need homes, “he argues. Within the county of Miami, Fernando Bragagnolo, Real Time Finders broker, considers that Little Haiti, just 15 minutes north of Downtown, is shaping up as a new area. “The city of Miami always grows towards the North, towards the South there is little development, partly because it is far from the zone of influence of the beaches”, he emphasizes.

The need to be informed

Before defining the purchase, it is key to investigate the financial status of the condominiums. “A new law that will be implemented next July requires condominiums to have a website with this information for public access,” says Tesone. It is also important to know its rules, since some do not allow the rental of their units, or put restrictions. In turn, the buyer has the right to make an inspection of the state of the property with a certified company, where it is also checked that the unit is in order.

The costs

The buyer does not pay real estate commission, but you must bear in mind that he will pay 6 percent when selling. The cost of closing or writing is usually around 2 percent in a cash transaction, between stamps and lawyers. This means that for it to be a good investment between buying and selling, there must be at least a 10 percent valuation.

The owner must pay the expenses and also the annual tax, which is around 2 percent of the tax value of the property. You can also choose to take out insurance to get rid of liability in case the tenants have an accident inside your home. Taurizano ensures that in case of an eviction the process is easy and fast. “A letter is sent saying that they are delayed and a daily percentage is charged.” On day 10 a three-day summons is sent, which if it is not answered is submitted to the lawyer, who initiates an eviction process and before 30 days Everything is resolved It is important that the person who manages the property has knowledge because if you are not complying with any of the guidelines, such as keeping the security deposit in a separate account and not mixed with the rent, you can delay the process ” , Explain.

How to achieve a better income

The multifamily, are properties of one or two floors in economic zones and two, three or four units for low class people who pay rents of US $ 800 to US $ 1000. “In them, you have to invest from US $ 500,000 but generate between 7% and 8% profitability, while a common unit is around 4%, the counter is that the buyer is responsible for any repairs,” he explains. The advantage is that they do not have a monthly association cost, which often entails administrative expenses or hinders the approval of tenants.

The taxes

The seller must pay a tax on the capital gain. That is, a lien in case of selling your property more expensive than you bought it. Foreigners apply the Firpta. It is a tax law where any foreigner who sells a property that is in his name, is subject to a withholding of 15% of the sale. But when the seller presents his tax return and shows the capital gain he had, the surplus is returned. Example: A person sells his unit in US $ 300,000 that he had bought in US $ 200,000. At the time of sale, 15% of the total is retained, that is US $ 45,000. When making the tax return and specifying that he earned US $ 100,000, the IRS (tax collector) returns the US $ 30,000. “The process can take a year, until you make the declaration.If the property is in the name of an LLC (Limited Liability Company) do not retain that money unless it is in the name of a single partner and is a foreigner,” Bragagnolo warns . There are other exceptions to the Firpta, such as if the property is worth less than US $ 300,000 and will be occupied by a person who will live. “The Firpta, is only a retention at the time of the sale, you will pay the amount of tax according to the profit you generated,” says the broker. Therefore, the most advisable legal figure to buy is in the name of a corporation or LLC. In that case the Firpta does not apply, and the taxes when selling are paid as an American company and not as a person.

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