According to the Miami Herald, the numbers of people from foreign countries purchasing waterfront single-family homes in Miami is increasing. As these numbers increase, so does the rent that is being charged. Sources at Texas-based MPF research stated that South American investors are purchasing condominiums in Miami and are managing to rent them within a week. They also state that they are able to charge ever-increasing rates as time goes by. The research firm has found that Miami’s rents have gone up between three and seven percent recently. The fact that housing is still experiencing large numbers of foreclosures means that people are expecting this trend to continue.
Rentals in Miami and South Florida in general are occupied at a rate of 95 percent. The trend mentioned previously was that rents have been rising between three and seven percent. What will increase the numbers of people renting in this area are the 160,000 homes that are set to be foreclosed upon in the near future. This gives ”vulture-investors” several opportunities to purchase these foreclosures and quickly turn them into rental investment properties. This is exactly what South American real estate investor, Leon de Vega, has done.
After purchasing a property for $50,000 and investing in repairs in the amount of $10,000, de Vega was able to rent a two-bedroom unit in Kendall for $12,000 a month. Sale of this property just closed, and he received a purchase price of $95,000.
Foreigners enjoy purchasing American real estate because of the higher rents, the fact that they will receive greater protection than they do when they purchase property in other countries, and also because owning American property can make obtaining a visa to the United States a much easier proposition.
As investors continue to be fans of real estate in Miami, the numbers of home sales will continue to rise to the levels they reached in 2005 and 2006. In some areas, people even believe that home sales will surpass the levels set in the year 2005. One example is in Miami-Dade County where it’s possible that they will see 29,000 home sales this year, and this is much higher than the numbers recorded in 2005.
Throughout this current recession, the numbers of people who own their own homes has been in decline. Although this is the case, homeownership continues to be a great investment because every year, home prices increase by 5.4 percent. It is a trend in which renters cannot partake. Sometimes, people decide to rent until they can afford a decent down payment on a house, but currently, this is not the case due to the high price of rent and low wages people are receiving at the moment.
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