Real Estate, Why Miami Preconstruction Real Estate is So Popular?


by ELIZA MALEDEVIC - Date: 2008-05-23 - Word Count: 529 Share This!

It is tough when you don't know about something you want to invest into. Like say for example, Miami Preconstruction Real Estate investing, it is something that people look into especially with the state of the overall market nationwide, people tends to look to what will be beneficial. So what is Miami real estate investing exactly? Well it is buying properties prior to their construction. For example, a condo that will be built in 2 years, you can put a small deposit to hold the condo and capture the appreciation during the 2 years, which is the time it takes for the condo to be built. By then you'll get to reserve the unit and in time it'll be yours. It's what most of the condo investors do nowadays to reserve multiple units for them to invest their money and in the end have a good business.

Now if you are wondering why is Miami Preconstruction investing attractive to investors? Well let me tell you that there is no carrying costs during the 2 years till the condo are built. There is no mortgage, no taxes, and no expenses at all. Most of all, you do not need to manage tenants which can be a concern for Real Estate investors. Also, you do not need to qualify for mortgage. So, regardless of your credit history, developers will sell you a unit. So a person who wants to invest on a property often takes a look into the preconstruction real estate first to vie leverage.

Next question that you might ask is how to calculate your return on Miami Preconstruction Real Estate investing? It's actually easy, if the condo for example priced at $500K, typically, in the Miami market, developer would require 20% deposit. 10% at contract time and additional 10% when construction begins, so, your total out of pocket deposit would be 100K which 20% of 500K. It is that simple and, no other costs or additional expenses to be add just the simple deal that you and the realtor will end up. You don't need to get have a hard time calculating percentages it is all simple.

It is widely known that Miami Real Estate market has been appreciating over 25% annually. However, for this example, let's assume Miami Real Estate will appreciate 20% annually. By the end of the first year, this condo that has not been built yet would have already appreciated from $500K to $600K. Which means you have made $100K on your investing of $100K? That 100% return in one year. In other words, you could double your capital every year. That is what makes it so attractive to investors, the chances of doubli9ng up your money is present. Probably the main reason why it is so popular to buyers now is because they know they have an advantage on it in the long run. Thus giving them business advantage if they decide to sell, Miami preconstruction real estate is really making a good impression in a declining market, would it save the overall market in the future? That's a question we are holding right now.

Jron Magcale
Miami Real Estate

Miami Condos


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