The 5 Rules for Buying Miami Real Estate
The 5 Basic Rules for Buying Real Estate by a Top Producing Miami Realtor
I wrote this blog initially as a short email to a client who is a first time buyer in the Miami market. I wanted to make it short and simple, basically an initial blue print for first time buyers to make the right decision. Although the purchase of this specific client will be as a primary residence, in the future it needs to function as a profitable investment.
Simple supply and Demand economics – How many other units exist like what you want to buy?
If you have 200 exactly the same units in the market for sale, you are going to have a problem when you try to sell. If you own a one of a kind or two of a kind property, it is going to appreciate much better.
How stable is the neighborhood – Is there a lot of investors or end users in that market?
Primary residents are far less likely to sell when markets move down. Investors buy and sell rapidly, which is a problem in the long term. Brickell has this problem now with lots of renters. Coral Gables, which is a primary residence with mostly owners, does not.
How stable is the building? Financially speaking
The developer and building needs to be well-built and well-run. If it is not, mainentance fees will go up and this negatively impacts not only your monthly costs but future desirability of the property as a whole.
Does the product serve the local market need? – Is it Desirable to the local audience?
If you put a condo project that is not located in a prime location in direct competition with superior products for the same price in the same neighborhood you are going to have a problem (e.g. building town homes inside condo projects, that compete with superior but better priced townhomes outside of that condo). If your product does not carry any legitimate advantages, you won’t find your unit holds or appreciates in value.
Also the product must satisfy a need. There must be a local market who would buy it. Don’t put a Ferrari dealership in the middle of the Australian Outback! No matter how good it is, you wont have an audience. Or putting an ultra high-end product in a run down part of town, hoping it will ‘raise the bar’. This is a little like putting the cart before the horse. You have to at least have infrastructure around to allow for the market to improve.
Functionality – How functional is the product in fulfilling a need?
In close proximity to desirability, new condos must actually deliver what they promise to the audience they are targeting. If you are calling yourself a luxury building you must have luxury features: ceiling heights, location, services. You must be able to satisfy the functional needs to your local market. For example, you cannot target or promote a project to empty nesters if all the units have stairs, because older buyers have (or might have in the future) trouble with stairs.
Note: When you hear people say ‘Location, Location, Location’. The rule of the right location is built into all of these above elements.
Location is universally key across the board.