Buying in Miami
Located at the crossroads between north and South America, Miami is a prime business centre, a major air hub and the cruise-ship capital of the world. It’s also a magnet for international property buyers.
Probably best known to most South Africans as the location for TV series like Miami Vice and CSI, Miami is experiencing something of an unprecedented renaissance when it comes to infrastructure, population, commerce and culture.
‘Miami is arguably the best city in the US in which to live,’ say Gary Lazarus and Monte Levin, Miami estate agents with whom Pam Golding Properties has recently partnered. ‘Our beaches are pristine, our climate amazing and our multicultural identity rich and rewarding. The city is easy to get around. It’s not too big or overcrowded, and it doesn’t suffer from New York or LA’s overwhelming traffic jams or air pollution.’
What’s more, say Lazarus and Levin, the cost of living in Miami is lower than that in other major US or international cities, and the property costs are half (or even less) of those in New York, San Francisco or London. ‘Miami is a young city. It has a unique atmosphere and it’s going places. This is a great time to invest in and be a part of Miami’s growth,’ both agents maintain.
Scott Hagerman, investment manager (North America & Asia Pacific) at IP Global, a property-investment company that helps high-net-worth investors add global real estate to their portfolios, says, ‘As one of only two North American cities in the top 10 of Knight Frank’s most recent wealth report, Miami will continue to be in demand by high-net-worth buyers from around the world, and will always be seen as a safe-haven market for wealthy individuals and families in Central and South America.’
Esther Percal, senior vice president of Miami-based EWM Realty International, concurs. ‘Miami, and especially the Miami Beach market, is in a total upswing at the moment. It’s both a buyers’ and a sellers’ market as prices continue to rise, with high demand and low supply. The city attracts a lot of foreigners wanting a second, third or even fourth home here.’
One of the factors that doubtlessly adds to the attraction of buying in Miami is that doing so – be it as a local or a foreign buyer – is a relatively easy process. ‘Unlike in New York, we don’t have cooperatives that require board approval for purchases. Our market is condominiums and private homes,’ Lazarus points out. ‘The purchasing process is pretty simple and Miami is totally geared up for foreign buyers, right down to offering a turnkey furniture service.’ And, he adds, ‘While federal income and estate taxes apply, Florida has no income or estate taxes.’
Chris Immelman, MD of Pam Golding Properties International & Projects Division, says, ‘Surprisingly, this rapidly growing urban centre still offers property at prices well below those of other large cosmopolitan American cities, such as New York, Boston, San Francisco and Los Angeles, not to mention prime global investment destinations such as London. Miami’s notable housing rebound is being propelled by the growing demand for luxury condos and upscale urban living in a vibrant city which is attracting a worldwide following.
‘For South African buyers, the prices of these apartments are accessible, starting from $250 000 to R3,055 million at current exchange rates. Return on investment is increasingly attractive. In greater downtown Miami, dramatic increases of 22 per cent, 20 per cent and 15 per cent have been achieved on the resale of condos from 2011 to 2014. Furthermore, a buoyant rental market with high demand has seen average condo leasing prices with yields of 6.4 per cent in 2014 soar to 15.6 per cent in 2015.’
Where and how to buy…
‘The most popular area in the city is Miami Beach, because it offers not only miles of beautiful beaches which can be enjoyed year round, but also an easy-to-navigate bay – a boon for boaters. It boasts great restaurants and shopping, plus an exciting nightlife, with theatres and art aplenty,’ says Percal.
Not surprisingly, homes along the bayfront are the most sought-after and expensive in the city. ‘A two-bedroom home in mid Miami Beach costs in the region of $800 000 to $1.5 million,’ she says, adding that there are, however, areas where one can buy for substantially less. ‘In North Beach – which is still a part of Miami Beach – you can purchase a home in the $500 000 price range – although these are quickly disappearing. And, for the same price, you can buy a condominium unit in a full-service waterfront building in the area.’
Says Lazarus, ‘Downtown Miami, with its captivating vibe, views of multi-storey cruise ships lined up along Biscayne Bay, and Museum Park, is where the key investment opportunities lie, in an area undergoing major redevelopment and revival. Museum Park is an impressive 12-hectare Bayfront space with public gardens, sculpture installations and two museums. With an influx of corporates into the area, rental demand is very buoyant, which is a significant benefit for investors who prefer to rent out their units, at returns of four to five per cent per annum.’
George Radford, director for IP Global Africa, agrees with Lazarus. ‘Apart from the outstanding performance of the Miami real estate market in general, two other factors make Downtown Miami a good property investment destination. First is the age composition of the Greater Downtown Miami household, which shows an increasing influx of young, working-age professionals. Second, the median household income in Greater Downtown Miami has grown to $65 311 – up 32.39 per cent since 2010 – which is more than double that of the City of Miami. All this adds up to a property market from which investors can benefit.’
While visas are required for establishing US residency, there are no purchasing restrictions for foreign buyers and local finance is available for qualifying overseas investors. ‘There are recording fees involved in the purchase of a property, which are typically paid by the seller, and it’s customary for the buyer to purchase title insurance, a onetime fee that insures the title of the property should any inconsistencies arise after closing,’ says Percal, who explains that the cost of this insurance varies according to the property price and, although not mandatory, is required if the buyer is obtaining a bank loan. ‘Buyers are also required to pay any fees associated with their financing in the event they obtain a mortgage and, of course, the expenses charged by the buyers’ attorneys,’ she adds. ‘We also have an annual property tax which is paid by every property owner and is based on the value at which the city assesses one’s property.’
- Embassy of the United States (SA): southafrica.usembassy.gov
- EWM Realty International: estherpercal.com
- Invest in Miami Property: investinmiamiproperty.com
- Marquis international Real Estate: marquisinternationalrealestate.com
- One Sotheby’s International Realty: onesothebysrealty.com
- Theresa Fernandez: email@example.com
- Waterfront Real Estate: waterfront-real-estate-for-sale.com
Text: Jocelyn Warrington
Photographs: iStock, Supplied