Miami Investment Property Tips

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Can I assume the sellers mortgage loan when buying a Miami investment property?

Assuming a Loan on a Miami Investment Property

One option you have when purchasing a Miami condo or Miami home as an investment property, you can actually assume the seller's home loan instead of securing your own.

Assumption is an interesting option for a home buyer because it means you are probably putting less cash into the transaction. You will probably pay a point to assume the loan, but that cost is relatively low in the grand scheme of things. You're also not starting from scratch with your mortgage loan which ultimately means less interest being paid to the bank.

This type of financing also means that you can close more quickly on your home since the mortgage company has already assessed the property. Of course, not every seller will look favorable on a loan assumption, but it is an interesting option for a savvy real estate investor.

Can I invest in Miami real estate if I plan to retire to Florida?

Snowbird Investment Opportunities

If you are looking to retire in Florida, you may want to consider investing in property sooner rather than later. By investing in a Miami condo or Miami home and renting it out, you'll be building equity toward your retirement and you'll be getting into the Miami real estate market before home and condo values rise even more.

If you can take advantage of a recently rehabilitated older condo that offers great value, or if you can get a deal on a preconstruction unit, you'll be in great shape.

You don't even have to live in the unit you buy, you are just helping your money make money in the area in which you eventually want to settle. Remember, you can also rent your Miami condo seasonally and start taking advantage of it sooner than later.

How can I make sure I am making a smart Miami real estate investment?

Establishing Rental Income Cash Flow

Making the decision to buy a Miami investment property is not as simple as plunking down the money and reaping the rewards. Before you invest in Miami real estate, you need to calculate the cash flow of the property. This is a relatively simple equation. First, asses the annual rental income and then deduct:

  • Tax Benefits of Owning the Property
  • Maintenance Budget
  • Mortgage Payments

Hopefully this will yield a balanced or positive cash flow, in which case it will be a smart investment. If you get a negative cash flow and you can't adjust the rental income or the mortgage payments, you should probably pass. You don't want to get stuck with a Miami real estate albatross around your neck.

What should I know about financing my Miami investment property?

Financing Your Miami Investment Property

An important Miami Real Estate investment tip: If you don't have 25% to put down, you may be in the red on your Miami investment property for the first few years. If the bank knows that this is an investment property and not owner occupied, they will often require 25% down or you will take a hit on the interest rate.

In many cases a single family home will be easier to finance as an investment property than a condo. This is because the lender is more sure of the home's intrinsic value whereas a condo unit may be more risky. Be prepared with a hefty down payment and your Miami investment property will yield a positive cash flow and a great return on your investment.

Can I invest in preconstruction Miami real estate?

Miami Preconstruction Investment Opportunities

If you have the capital to invest in Miami real estate, consider taking advantage of the financing and deals offered by developers on Miami preconstruction condos and homes. In many cases, before the condo is even complete, you can turn around and sell the unit at a tidy profit. You can also hold on to the unit and rent it out.

Some condo developers are not allowing investors to buy condo units because many Miami condos are more desirable if they are owner occupied. However, if you can find a preconstruction opportunity where you can invest early and benefit later you'll be glad you did.

What drives Miami rental prices?

What Drives Rent Prices

How do you know how to price your Miami condo or Miami home? Here are a couple of tips so you'll know which Miami investment properties will yield the best rent potential:

  • Location – We all know location is important, but specifically locations near to schools and universities are popular because you have a transitory group of people coming in and out of state. Of course, this means you may not get a high rent. Another funny note, did you know that rental rates can actually relate to geography? Sunnier areas and better views yield higher rents.
  • Size – A spacious apartment will always attract more potential tenants. Two bedroom units are especially desirable because a renter can bring in a roommate and halve their own cash outlay.
  • Amenities – Apartment and Condo amenities will attract renters. If there is a washer and dryer available in the unit, if there is a pool, if there is covered or contracted parking available with the unit, if there are newer appliances and fixtures and finally, if the unit is close to the beach.

What is a smart Miami condo investment idea?

College Housing - No Problem

Smart real estate investors are putting their money in Miami real estate since home values are rising upwards of 15% per year. One way that families take advantage of this is by purchasing Miami condos while their kid's are in College.

Why pay the high room and board prices of the Miami College your child is attending when you could invest real estate and provide them with a safe home environment at the same time. College is usually about spending money but in this case, you'll actually make a return on your investment and make some of that money back.

Here is a short list of Miami Colleges and Universities and their zip codes:

  • Barry University (33161)
  • Florida International University (33199)
  • Miami-Dade College (33135)
  • Nova Southeastern University (33162)
  • St. Thomas University (33054)
  • University of Miami (33124).

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