Country Guides Country Guide: Miami

Date Published:

30/05/2008

Miami offers great investment potential as foreclosure property is being sold at prices less than 75 per cent of its premium price a couple of years ago. But the caveat is that the bottom of the market has not yet been reached, which means you could purchase today and find the value of the property will be less in a couple of months' time. However, in the medium term, any purchase made today should be worth considerably more in five years’ time.

Investment Potential: Capital Appreciation

Capital gains of 200 per cent and higher were recorded in Miami during the boom years of 2003-2007; in 2005 house prices increased by 40-50 per cent and more for selected property. Clearly, with hindsight, a bubble was being created but few people foresaw that it would burst so spectacularly. Miami, because of its cache as Florida’s most stylish city and because space is finite in fashionable areas such as South Beach, should rebound more quickly than elsewhere.

Investment Potential: Rental Yield

Falling capital prices and an increase in the number of tenants are balancing each other out somewhat. A greater demand for rented accommodation has pushed prices down but gross yields of around 5 per cent are achievable in Miami. Budget for a rental tax of 10 or 11 per cent, which must be collected from the tenant and paid to the State. Holiday lettings has a two-bedroom condo in Miami’s south Beach to rent from £775 pw.