As the housing market in Miami continues to heat up, buyers are discovering inventory is scarce. When viable options do become available, they don’t last very long on the market. This has led both locals and foreign investors to get ahead and explore pre-construction opportunities more closely.
Whether you’re ready to rock and buy into the hottest condo development or are just beginning to consider the idea, we’ve outlined the three most important things to consider when buying pre-construction condominiums in Miami.
1. The Developer
We always recommend that you do research on the developer of the project you are considering investing in. Ask yourself the following:
- Do they have a good reputation?
- What types of materials and finishes are they known for using?
- Are they in the middle of any legal battles over their properties?
We point this out because there is a variable set in Miami when it comes to pre-construction, there are developers with great reputations and then there are those with not-so-great reputations. It is important that you take the time to consider who you’re getting into business with before committing to buying a project.
Once you’ve verified their reputation and researched their track record, we highly recommend stopping by some of their other developments to see for yourself. This will allow you to get a closer look at the kind of work that they do. Specifically, how these residences are finished out compared to what is promised. Take note of the finished product, the square footage allocation, the brands of appliances they’ve chosen, and most importantly where they were generous and where they may have cut corners.
At the end of the day, no project is perfect and developers are not always consistent. But if you are aware of the things most important to you, you’ll know what to look for and can make the best decision on a developer that meets your criteria.
Action Items:
- Ask around!
- Visit completed projects
2. The Location
Another important factor to consider is the location. You are investing in the area that you buy into, just as much as you are investing in the property itself. You are buying into that immediate street and neighborhood it’s in. You’re somewhat at a disadvantage since you can’t see what the end result will look like until it is complete. Therefore, work with what you have and thoroughly research the location of each development you consider.
Location is often where desirability comes into play. Determine what other potential surrounding factors could attract or deter future residents from wanting to live in your area. The existence or development of schools, retail, and parks could increase value. Conversely, locations close to less desirable commercial activities such as hotels, nightclubs, and bars could dramatically work against you. While not a rule of thumb, it’s just something to consider. Think about what other projects, good or bad, are going up in the area and how that will affect how yours is experienced.
Action Items:
- Visit the neighborhood
- Research upcoming developments in the area
3. Value Forecast
There are more condos in Florida than in any other state in the country. At the same time, new construction is currently so desirable that it has become increasingly less available than in previous real estate cycles. One way to approach this is by analyzing the availability of development opportunities in that area. Everyone wants to buy the newest, nicest product out there. To get the most value out of your real estate investment, we advise buyers to seek out opportunities that are truly special, unique, and preferable to the last of a generation.
What keeps values up is the buyer’s desirability to live in that building or in that neighborhood. Invest in something that will be sought after in years to come and is not easily replaced. Sunny Isles Beach, FL is an example of this potential for replacement. Historically, properties on this stretch of beach don’t appreciate because newer buildings are constantly being built that have the potential to outshine older buildings that came before it. Conversely, ocean frontage in Miami Beach has become increasingly difficult to find as there are little to no development sites available. Investing in a desirable area with limited residential options is a great formula for lasting increases in property values.
Action Items:
- Identify future projects in your area of interest
- Keep an eye out for unique opportunities
Interested in buying or selling in the South Florida area? Or do you want to become more informed on anything related to today’s market? Reach out to us today and let us help you reach your real estate goals.
