WHY INVEST IN MIAMI AND SOUTH FLORIDA
Interest in investing in real estate in the United States, particularly in Miami and South Florida, is on the rise among Latin Americans for various reasons. Some view it as an ideal option for vacation homes or future residences, while others see it as a lucrative investment opportunity, given the benefits and security that the U.S. real estate market offers to foreign investors.
Real estate experts, business attorneys, immigration lawyers, and financial advisors have noted a recent increase in Mexican and Latin American clients. This trend is largely influenced by the political instability in many countries in the region, prompting individuals to seek options to secure their financial assets. Real estate investment is often regarded as one of the safest and most profitable avenues available.
For investors who use their acquisition for leasing, the NAR estimates that they will be able to benefit from an estimated 3% increase in rents.
A property after five years could increase your total return on investment by more than 150%.
During periods of national and international economic downturn, real estate in Miami and South Florida stands out as an attractive and secure investment alternative. It offers high returns on investment and significant capital appreciation, while also providing a pathway to permanent residency.
According to the National Association of Realtors (NAR), home prices in the U.S. are expected to appreciate by 3% in 2024, with mortgage rates remaining below 7% for fixed terms of 20 or 30 years. While there may be a slight increase in residential supply, the real profitability lies in renting properties—whether through long-term leases or vacation rental schemes. Investors could potentially see a 150% return on investment within five years.
Additionally, Freddie Mac's 2024 outlook report indicates that, despite global economic challenges, the real estate market in Miami and South Florida remains robust. There is a steady pace of new construction permits, housing projects, and sales of both new and existing homes, outpacing overall economic growth.
Given these indicators and past experiences, now is an opportune time to invest in real estate.
When considering investments, it is advisable to focus on cities with strong job and economic growth, high capital gains, and low tax rates, especially those geographically or culturally close to Mexico and Latin America. Miami, along with other cities in South Florida, is highly recommended for investment.
According to the profile of international homebuyers in the United States, 60% hold a visa or green card. The EB-5 program allows foreign investors who create jobs in the U.S. to apply for permanent residency, extending this benefit to their spouses and children under 21. As of November 21, 2019, applicants must invest a minimum of $1.8 million and create 10 full-time jobs. If the investment is made in a targeted employment area (TEA) or rural location, the minimum investment is reduced to $900,000.
A temporary subprogram within the EB-5 program, known as the Regional Center program, allows for passive investment, meaning investors act as limited partners without major responsibilities in company management. This subprogram accounts for 85% of EB-5 visa applications but has a cap of 10,000 visas per year, depending on the investors' country of origin.
Mexican citizens can expect to obtain their EB-5 visa in approximately two and a half years, as there is currently no waiting list for applicants from Mexico and other Latin American countries.
When investing, it is crucial to consider tax implications, as becoming a permanent resident of the U.S. requires paying taxes on worldwide income.
What should you know before investing?
"Investing in real estate in the United States is attractive because of its geographic proximity and because property prices, particularly those in the South and Midwest, remain affordable (less than $ 250,000)," says Gay Cororaton, Research Director. Residential and Commercial from the National Association of Realtors (NAR).
What should you know before investing?
To create an optimal investment structure for non-U.S. resident clients, it is essential to analyze their unique circumstances and objectives. This tailored approach ensures that we identify the best options to meet their specific needs.
What works for one client may not be suitable for another. That’s why at Optimus Real Estate & Lifestyle, we offer a dedicated team of professionals with over 27 years of experience serving international clients in the Miami and South Florida markets. Our experts will guide you in making a safe and profitable investment.
While purchasing property abroad can be a smart decision, it is crucial to consider several fundamental aspects before proceeding. Once you identify the property you wish to invest in, it is important to understand that tax obligations and regulations may vary based on the buyer's immigration status prior to closing the transaction.
Foreign buyers may incur taxes of up to 40% when transferring, gifting, selling, or inheriting property. Therefore, consulting with a qualified attorney before finalizing the purchase is essential. They can advise you on the most advantageous methods of acquisition to minimize or avoid these tax liabilities.
Foreigners can acquire property through various structures, including:
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Corporation
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Company
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Trust
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Limited Liability Company (LLC)
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Co-ownership
These structures can provide better investment protection and help reduce tax burdens.
Who qualifies as a foreign buyer in the United States?
A common question from clients is who qualifies as a foreign buyer. The answer is straightforward: any individual or entity that can demonstrate the financial capacity to purchase property, either in cash or through financing, qualifies as a potential buyer.
Is financing available for foreigners?
Yes, many banks offer loans to foreign buyers. However, it is advisable to consult an expert in foreign financing. They can guide you through the best options available from banks and assist with the necessary paperwork to enhance your chances of approval.
It should be noted that real estate has a lower risk than investments in the Stock Market, generate capital gains in the long term and can have annual returns. No other investment offers these advantages.
What type of visa or status is needed to acquire property?
This is another frequently asked question. Properties can be purchased under various immigration statuses, including with a non-immigrant visa such as the B1-B2 tourist visa. The key is to demonstrate financial stability as a buyer and seek advice from an international lawyer specializing in tax matters for foreign investors.
How do I start the process?
The first step is to contact Optimus Real Estate & Lifestyle. One of our real estate executives, along with our team of experts—including lawyers, financial advisors, and title agencies—will support and guide you throughout the entire process, ensuring that you make the best possible investment.
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Note: Some of this information has been obtained from sources outside our company, so it may change at any time. Optimus is not responsible for changes or modifications that external sources may make to this information.