According to a report by the Miami Association of Realtors, Florida is the top destination for foreign buyers in the United States, accounting for 23% of these buyers’ transactions, and Miami continues to be the preferred market for Colombians, Brazilians and Mexicans.
Within Florida, the Miami metro area is the largest buyer’s market, attracting 47% of Florida’s foreign buyers between August 2022 and July 2023.
During 2023, purchases were led by the local and national market, especially from the north and east of the country, however, taking a look at these 5 months of 2024, Latin Americans have returned and with the same pre-pandemic strength to invest millions of dollars in properties in Florida.
Downtown Miami is an example of these investments, properties such as Gale Miami Hotel & Residences, have seen 30% of sales coming from Colombia, 30% from Mexico, 15% from Honduras, 10% from Brazil and 5% from Ecuador.
For its part, in the case of The Elser Hotel and Residences, approximately 70% of its buyers are from Latin America, specifically Colombia and Mexico, the same has happened with newly built residences such as JEM Private Residences who since the announcement that construction began last April, sales numbers have risen exponentially to 39% Mexican (Monterrey, Puebla, Guadalajara) 22% of Colombians (Bogotá, Medellín), who focus on small studio or one-bedroom units, and 11% of Brazilians who are looking for slightly larger units as second homes for vacation.
On the other hand, the island community of North Bay Village, located about 30 minutes from Downtown in residences such as Continuum club & Residences, has received 20% of Mexican buyers and 15% from Colombia, while Brazilians have decided to bet 40% on boutique residences such as Origin Residences by Artefacto.
Against this backdrop, Valora Analitik consulted Peggy Olin, President and CEO of One World Properties and Craig Studnicky, Co-Founder & CEO of ISG World, in order to gain a deeper understanding of how real estate investments in Florida and Miami work for Colombians.
Process to be able to invest in the real estate sector in Miami from Colombia
“From Colombia, what we are seeing from South America are usually amounts between US$500,000 and US$1.5 million. 80% of all sales last year and this year are in that price range from South America, particularly Colombia,” said Craig Studnicky, Co-Founder & CEO of ISG World.
That’s considering that, according to Studincky, when buyers can’t find that in Miami, they head to Orlando. It’s getting harder and harder to find that in Miami because the city is getting so expensive, according to Studnicky.
He also said that one option for this type of investment is Circ Residences. Its prices range between US$400,000 and US$1 million because it is a condominium conversion, which is usually sold at a very attractive price compared to pre-construction.
But what is the investment process like? The investment process consists of that, once they decide on a unit they want to buy, the customer enters a reserve which goes with a 10% deposit.
“If the project is already completely under contract, a contract is signed and 20% is given, then the second 20% is given in two types of payments, in this case, for JEM Private Residences, the payment works this way. However, for investors coming from Latin America we have some parameters of flexibility in terms of payment times and terms,” says Peggy Olin, president and CEO of One World Properties.
Why is Miami an ideal destination to invest in real estate?
Miami is a conglomerate of Latin America, the entire United States and Europe, so it is very likely that its growth will continue.
“I call Miami the Hong Kong of the west, among all the companies that are opening their headquarters in Miami, the people who continue to move to the city who are looking for economic and personal stability, especially also the issue of security that will continue, Miami is still in its “infancy” on the eve of exponential growth,” notes Peggy Olin, President and CEO of One World Properties
Similarly, in terms of investment, Peggy Olin explains that “in the case of JEM Private Residences, where we have seen a large number of investors from Colombia, we have units that start from US$650,000. Therefore, they need 10% and then 20%, which is around US$130,000.”
And he adds: “In any case, the buyer must contribute a total of 40% in the course of at least one year, the balance is at the time of the deed of the property, that is, the total time is 3 to 4 years. The idea is that the buyer takes advantage of the payment plan to benefit from the appreciation.
On the other hand, it is important to note that, according to Craig Studnicky, not all properties qualify for a visa. “From $800,000 of investment, you get in line for the EB-5 that can help you, one day, get a green card in the United States,” he said in the interview.
What are the best sectors to invest in according to their profitability?
In addition, among the best sectors to invest, according to the president and CEO of One World Property, are Downtown Miami, and other areas, such as Fort Lauderdale, however, he said that Downtown Miami is the best option.
Finally, in terms of taxes, the president and CEO of One World Properties, indicates that “that is very personal, obviously when you have rental income here in the U.S. you must declare it, and it will depend on your jurisdiction and how you are with your taxes, you must declare where that profitability goes.”
However, he recommends that it is always best to consult with an accounting advisor to clear up any doubts in this regard.
