The conditions for investing in Florida are excellent. Why ?
1 – Depreciation of the Real Estate Market
Since the US financial crisis, the real estate market suffered a huge depreciation with a significant volume of foreclosures forcing banks to sell at very competitive prices. Since 2012 growth has resumed but there is always properties at low and very attractive prices.
2 – Le marché immobilier en pleine expansion
Real estate is a growing sector as the State of Florida’s economy.
The massive wave of foreclosures has led to a loss on properties price of approximately 35%.
3 – An increase in demand for rental
The number of families who are renting is now very high in the US and particularly in Florida. Miami and its surroundings are booming with a population increasingly large, welcoming population flows of Latin American and Europe that strengthen demand and increase values. In Miami, nearly 50% of residents are foreigners and speak over 100 different languages.
After the 2008 crisis, many households have lost their property and their ability to take on debt to banking organizations : they can not borrow and criteria to obtain credit have tightened. American households are forced to rebuild their “credit score” and at the same time they need housing, renting for a few years is the solution. Meanwhile, rents tend to increase, providing good rental returns for investors.
The combination of all these elements is a boon for investors, they can invest in a real estate market with high rental income and capital gains on resale, if the real estate is well chosen and well placed.
4 – Good rental income
Given the very low property prices, the performance of a rental investment can become very interesting. An investment in Florida, can generate a net annual yield between 7% to 12% (before tax). Property prices in Florida is 2-3 times cheaper than in New York or in many other States for a rental return that often reaches twice.
Miami Beach prices are around $800/sqft (and less in some other cities of Florida), which is very affordable compared with California or New York.
A property can be profitable in less than 10 years in Florida. However, a real estate investment is a short term market, so the goal is often to sell between 3/5 years.
5 – Tax benefits
Florida has a specific tax compared to other states. She is one of 10 states that do not pay the State Tax. There is obviously no wealth tax. The single tax is the “Property tax”.
In general, when income property is sold for cash, all gain or loss must be recognized for income tax purposes. The total realized gain is the difference between the net sale price (selling price less selling expenses) and the depreciated basis of the property. The seller pays tax on the gain from the sale of real estate in the year the gain is collected.
Three types of deductions from gross income are allowed when calculating the taxable income from investment real property : operating expenses, financing expenses, depreciation.
In all cases, we invite you to consult your tax attorney.
6 – Strategic location
Florida has an invaluable carrier and geopolitical position being a bridge between Europe, America and Latin America (Many investors in Central and South America come there to secure their savings).
Florida has many other advantages :
– this is one of the best tourist destinations where the migratory flow is always constant. Miami recorded 12.6 million visitors per year, of which 6 million are international visitors.
– the state is served by the International Airport of Miami and Orlando, located within 3 hours of the larger towns and resorts of Florida locations.
– transit port activity and leisure is very important. The Port of Miami is called the “Cruise Capital of the World”.
7 – Dynamic State
Miami is a world capital for business, finance, commerce, media, entertainment, arts and international import / export.
Miami is a growing city in real estate and finance. Miami is the second American financial center with one of the largest concentration of international banks in the United States.
Miami hosting more than 1,400 multinational companies and more than 100 international consulates, trade offices and bi-national chambers of commerce.
The economic health of Florida is very good with an unemployment rate under 6% of the bar and continues to gradually decline.
8 – Unique lifestyle
An exciting lifestyle for all (young people, families, visitors …) with lot of activities (museums, performances, art galleries, sports stadiums, restaurants, concerts, famous places, shopping).
Cultural and entertainment places s are booming.
Florida boasts over 225 miles of beaches for the East Coast and an Atlantic Ocean temperature between 75 and 84 °F.
The State of Florida is home to two national parks, Everglades National Park and Biscayne National Park.
The climate of Florida is one of the most enjoyable in the United States, close to the Bahamas, Florida offers a “subtropical” climate in a continental country, with an average temperature of 75 ° F.
Now lot of investors live there year round.
Miami and Florida offers a pleasant quality of life. Live or invest in the sun, facing the beautiful beaches is a dream that you can now achieve.
“The question is no longer why invest in real estate in Florida but how to buy an apartment or a house? “