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Miami is fast becoming the architectural capital of the world, with dazzling new developments going up at a rapid pace.  Aside from its Art Deco era, until recently, luxury Miami condos could only be found in cookie cutter buildings with mediocre architecture. Luckily, the selection of high end condos in Miami and Miami Beach has greatly expanded in recent years. With constant Biscayne Bay and Atlantic Ocean views, some of these Miami luxury condos have outstanding surroundings elevating each of the unique residential buildings. 

 

As Miami has grown in stature, so has the quality and design of its new residential luxury condo buildings. For example, as discussed recently in the Nytimes article: "In Miami, Embracing the Bold and Brilliant in Architecture", the city has seen stunning architecture from architects:

Renzo Piano at 87 Park in Surfside, 
Richard Meier at Four Seasons Surf Club, 
Jean Nouvel at Monad Terrace in South Beach, 
Rem Koolhaas at Park Grove in Coconut Grove, 
Herzog & de Meuron at Jade Signature in Sunny Isles,
Bjarke Ingels at Grove at Grand Bay in Coconut Grove, and 
Norman Foster at Faena House in Miami Beach. 
 

In addition, the Miami area has seen some other stunning architecture, including the Residences by Armani Casa at  Sunny Isles Beach, Zaha Hadid at One Museum Tower and Architectonica at Oceana Bal Harbour. 

Most recently, Portuondo Perotti Architects at Fisher Island along with interior design firm Indelux, which also designed interiors of Palazzo del Sol and Palazzo del Luna on the island, are designing modern Tuscan estates for the last 12 plots on the island.  Finally, Madrid-based architect Joaquín Torres recently designed a spectacular 11,000 sq. ft. home on Key Biscayne. 

 

When buying a luxury condo in Miami, what do I need to know? 

All the statistics we have listed trend towards an easy conclusion: investing in Miami luxury real estate and beach condos is low risk. As well as the high number of foreign investors, Miami sees many Americans coming here, especially from New York. Many wealthy New Yorkers summer in the Hamptons and winter in Miami.  Some even say it is quicker to fly to Miami than it is to drive to the Hamptons.
 

Some Tax Advantages of Buying in Miami

Florida residents (who do not have to live there full-time) benefit from no state income tax and from "homesteading" their primary residence. It is easy to ignore the homestead benefits since many people think it merely reduces the taxable value of the property by $25,000. 

Florida residents (who do not have to live there full-time) benefit from no state income tax and from "homesteading" their primary residence. It is easy to ignore the homestead benefits since many people think it merely reduces the taxable value of the property by $25,000. 

In addition, there is an annual lifetime limit as to how much that taxable value can increase. Over 10 or 20 years, that can be significant. And you do not have to keep the same property; the homestead exemptions are transferable to a new purchase, so there is every reason to keep looking at properties for sale. In addition, unless the homestead is guaranteeing a debt, it is impossible for any creditor to seize the residence to pay off business or other personal debts.

We have explored in detail "Why you should invest in Miami," so now let us discuss how to invest.

"Miami Home Buying Process"

"Miami Real Estate Tax Information You Should be Aware Of"




Miami Buyers Should Always Use a Buyer's Agent

The Seller’s broker always works for the seller, remember that. Unfortunately, many buyers don’t understand the consequences of going directly to the seller’s broker rather than using their own broker.  
  1. The Seller’s broker always works for the seller, remember that. Unfortunately, many buyers don’t understand the consequences of going directly to the seller’s broker rather than using their own broker.  
  2. For instance, what would be the consequences if you used your wife’s or husband’s attorney for your divorce. Clearly, the consequences would be drastic; don’t make the same mistake when entering into one of the largest purchases of your life. 
  3. Be clear about what you want and why you want it so you can stay focused and work efficiently on the multi-million-dollar project to buy.
  4. Have all the facts to hand so the final decision delivers long-term satisfaction. It is a well-known fact among real estate professionals that, apart from a serious change in personal circumstances, the main reason a resale property goes on the market is because the owner "bought the wrong property in the first place."
  5. Have experienced, successful, and detail-oriented specialists on your team from day one.

Every country in the world and every state in America apply different real estate laws. Some are common, but many parts of the small print are so different that simple errors can cause serious problems.

The property seller, particularly if it is pre-construction or new construction, will have their own agent working for them, and working on their behalf. The buyer should choose their own Miami real estate agent. 

In Florida, it is standard practice for a real estate brokerage to work as what is called a Transaction Broker. This enables them to help the prospective buyer search for and see every property that meets their criteria.

 Once a property is short-listed, their agent can become a Single Agent. As a Single Agent, the Realtor owes all their loyalty to the buyer, and none to the seller, so they can negotiate effectively on price, terms, and conditions. An agent who represents the seller cannot deliver that crucial level of service to the buyer.

The commission, or sales fee, is paid by the seller, so hiring a dedicated agent is free for the buyer. The seller, in effect, pays the buyer's agent to bring a ready, willing and able purchaser to complete the transaction.

Buyers choose Realtors who know:

  • Everything about the Miami real estate market and individual Miami neighborhoods.
  • Every type, style, and specific location and aspect of every piece of property currently on the market that will match the buyer's purchase criteria. The luxury real estate market commonly has properties listed above true market value. Some buyers feel the need to make a quick decision, and some sellers try to capitalize on that by setting a high price. A good buyer's agent will counter that.
  • Every property that is due to come on the market but has not yet been listed for sale.
  • Possible "close-out" sale prices soon to be offered by developers who want to complete a project and begin their next one. There is a real benefit in buying a property that is discounted because the developer wants to "close the books" on a current project. The experienced buyer's agent will also know if a new project which meets the buyer's criteria may offer lower-priced pre-construction prices.
  • With that being said, currently, Miami has a dearth of new development so this strategy won’t apply. 
  • The background details on each development, homeowner association and city code details which may affect long-term satisfaction with a purchase.
  • The details within a contract to purchase. Florida has two main contracts, the "FAR contract" and the "FAR/Bar contract." 
  • Some buyers may hire an agent whose brokerage uses their own contract. The FAR/Bar contract is considered by real estate attorneys to be the tightest and most protective of them all. It is always good for a prospective buyer to know which contract their Realtor will typically use.

"Why You Need a Highly Experienced Real Estate Agent in Miami"




Types of Miami Property to Buy

An investor or someone looking for a pied-à-terre may choose a high-rise condo in Downtown or a Miami Beach condo. Each has their own role in meeting a buyer's preferences, so choosing the right agent to find the right property in the right neighborhood is essential for success.

An investor or someone looking for a pied-à-terre may choose a high-rise condo in Downtown or a Miami Beach condo. Each has their own role in meeting a buyer's preferences, so choosing the right agent to find the right property in the right neighborhood is essential for success. A buyer can purchase a pre-construction condo or a resale condo, which have their own pros and cons.  

"Top 50 Penthouses in Miami for Sale" 

"3 Tips for Investing in Miami Luxury Real Estate"

"A Guide to the Most Distinguished Miami Mansions For Sale"

"These New Construction Miami Condos For Sale Will Change the Skyline in 2019"



Expenses Associated with Owning a Condo or Home in Miami

A single family home's ownership costs are all the owner's responsibility. The property tax is based on assessed value by the Miami-Dade County appraiser. Utility costs are based on monthly usage. landscaping and maintenance costs are subject to contract negotiation by the owner and the contractor
  • A single family home's ownership costs are all the owner's responsibility. The property tax is based on assessed value by the Miami-Dade County appraiser. Utility costs are based on monthly usage. landscaping and maintenance costs are subject to contract negotiation by the owner and the contractor.
  • Homeowner insurance depends on coverage and preferred deductible. Regular insurance will cover wind damage, but flood damage is managed by the National Flood Insurance Program and depends on the FEMA flood zone designation where the property is located.
  • Condos come with a monthly association fee to cover the management and maintenance of all common areas. Florida also requires each association to hold appropriate reserves; funding is included in the monthly fees.
  • Condo owner insurance is charged at a lesser rate than a single family home because the exterior of the property is covered by a separate insurance, and those premiums are included in the monthly management fee. Condo owners should seek advice on taking out flood insurance from their insurance agent.
  • One cost of owning investor property to rent out is the commission. In Miami, it is usual for the owner to pay 10% of the annual rent.

Getting a Mortgage

Typical mortgages are fixed for the life of the loan, which is usually 15 or 30 years. A deposit of 20% up to 50% may be required according to the overall size of the loan, and whether the borrower is domestic or overseas. Foreign borrowers are welcome, and arranging finance is not difficult.
Typical mortgages are fixed for the life of the loan, which is usually 15 or 30 years. A deposit of 20% up to 50% may be required according to the overall size of the loan, and whether the borrower is domestic or overseas. Foreign borrowers are welcome, and arranging finance is not difficult.

Closing (or Transaction) Costs When Buying a Condo in Miami

The rest of the property's purchase price if paying cash, otherwise the rest of the agreed deposit.Finance charges paid to the mortgage lender.
  • The rest of the property's purchase price if paying cash, otherwise the rest of the agreed deposit.
  • Finance charges paid to the mortgage lender.
  • Property insurance premium, plus any "reserve" required by the lender.
  • Title insurance if the property is new construction, otherwise the seller is likely to cover this.
  • Title insurance paid to the lender to guarantee the mortgage in case of any subsequent title dispute.
  • Closing costs payable to the title agent.
  • Legal fees payable to the buyer's attorney. We always advise our clients have a specialist attorney working for them on luxury property purchases.
  • Property inspection fees. The inspector is hired by the buyer to ensure everything is safe and functioning to industry standard.

As a final note, it is worth mentioning that Florida's property tax laws are such that many of these costs may be "offset" by the lower rates when compared with high-tax states like New York, New Jersey, and California. And those lower rates continue every year of course.

We will provide all the relevant information for you to make an educated purchase decision and negotiate the transaction on your behalf. As Exclusive Buyer Agents, we will hold your interests above all others, striving to obtain the best purchase price for the property. Remember, our mission is to grow, protect and preserve your wealth, so we are here to serve you.

We will introduce you to attorneys, mortgage brokers, and tax accountants, as well as provide contacts for schooling, domestic staff, and property management companies, if required. We are used to working with translators and have Chinese, Brazilian Portuguese, Spanish, French, Italian and Korean language-speaking agents to draw from to make the process seamless.

Finally, you, as the buyer, won’t pay us anything for our First-Class service, as the Seller always pays the sales commission in the US.

Managing Your Miami Investment Property

Property marketing to find a suitable tenant. Tenant screening. Preparing, terminating, or renewing lease documents.
  • Property marketing to find a suitable tenant
  • Tenant screening
  • Preparing, terminating, or renewing lease documents
  • Helping tenants prepare the condo Board application
  • Handling repairs and maintenance issues
  • Dealing with emergencies
  • Full communication with landlord and tenant

US Tax Laws are Pro-Real Estate Ownership

If you rent out your Miami property, all taxes and other costs are used to reduce your tax bill.
  • If you rent out your Miami property, all taxes and other costs are used to reduce your tax bill.
  • Capital gains tax (CGT) is applied to property sales. Primary residence owners may deduct up to $500,000 of profit before CGT is applied.
  • CGT may be deferred by using the 1031 Tax Law to sell one property and buy another of like kind.
  • The initial cost of purchase may be "tax-depreciated" over 27.5 years to lower annual tax liabilities.
  • Estate taxes can be totally avoided. Discuss the details with your attorney on how to plan ahead.
  • The US has tax treaties with many countries to avoid "double-taxation" so discuss your personal situation with your own accountant or tax attorney.
  • Tax laws are such that, because of the various applicable deductions, many investors pay no federal income tax for 10 – 15 years.