Local real estate agent offers reasons for investors to buy in Miami area – even with its skyrocketing prices | Real Estate Agents
With property prices red hot, the real estate market in the Miami area seems at first sight closed to investor opportunities. But there are plenty of arguments to convince them that home buying is worth it here.
In a chat with Dolores Urdapilleta, head of Urdapilleta Real Estate, and an expert broker in the Latin American region, we learned insights into the enduring strength of the Miami area real estate market, now and in the future.
How can you convince an investor to buy at this price level?
I am an economist and I prefer to refer to concrete facts about what is happening, economically and demographically. Today the most interesting thing about our work is that you have to understand the market very well, and know how to explain it well to the client so that they can see what is happening in the different aspects, with rentals, with sales, with the economy and demographics. You have to have great conviction and experience to give the arguments that show why it is convenient to make an investment in the current context.
Those who are looking for a return in dollars, today have it, because rents have also risen a lot, but there are no rents. Today, greater profitability is obtained when renting a property that is not new construction, which comes with other costs and maintenance expenses.
Isn’t there fear in the buyer that we may be at a peak and values may depreciate soon?
You have to look at facts. Today we have low inventory, and a demand that does not stop, because the Americans who arrive from other states, or the Canadians or everyone who arrives in Florida keeps coming.
For prices to drop, there has to be more inventory, but there is no easy context for there to be more property supply. With the rise in rates, those with a low-rate loan no longer leave their home because they go to a market with higher values and higher rates. So we continue with little inventory and the demand grows. And new construction takes time to generate more supply. That is why when a listing appears that comes out in price, it is sold on the day.
How does the current market impact the investor who comes from Latin America?
The Latin American investor comes and will continue to come looking to have his assets protected, (and) in a place where there are laws and systems that work. …Added to this is that in Miami people feel comfortable doing business because they deal with like-minded people, with whom they easily understand each other in their own language. It is not the same to do business and then have to deal with a lawyer, an accountant or with service people here as it is in Houston, for example. There is also a very important aspect of trust. We try to build that kind of relationship, it’s not just a sale and then I forget about the client. We continue working with them, we manage the property and we reach the sale when the case arises. When someone decides to invest, we are a team, we become partners in that business.
What worries you about the current context?
I’m worried about inflation, fixed costs. Everything went up – insurance and maintenance – that will impact profitability. And I am concerned about new construction, which is at very high prices. In any case, the current panorama is not that of 2008, that analysis is not correct. Miami is today another city, it is another world. In the diagnosis, I insist you have to look at the economy and demography. In addition to the Americans and Canadians, and many others who arrive looking to live here, there is now a much greater traffic of people who come for vacations or in search of a second residence because Miami offers all kinds of options. It is a city more complete, much more attractive than years ago.
