Investing in Miami's New Condo Developments

Investors tend to favor newly built condominiums, especially when purchased at favorable early-stage rates. Unlike condos that generate income, new developments are typically acquired with the anticipation of their value increasing upon completion. This article will provide crucial insights into key considerations and potential risks to steer clear of.

Pros: 

• The first and most important is that typically pre-constructed condo prices increase as the construction progresses. Especially in Miami! Today the inventory levels remain low and inflation high, you can get a 30% appreciation. 

• The second benefit is that you don’t need to pay for it right away. Usually, developers give you a payment plan that starts with a deposit and payments all the way when they finish the building 

• The third benefit of buying early in the construction phase is that you get to choose the unit that you like. When buying new construction, you can pick from a variety of floor plans to find one that best suits your needs and preferences. 

Cons: 

• While many investors witness an increase in the value of their newly acquired condos once they enter the resale market, not all condos experience appreciation. We have seen it all too often that units are sold for top dollar in the pre-construction phase only to struggle in the resale market. 

Here are a few reasons why: 

1. The product was not finished as promised and when introduced to the resale market, buyers lost interest at that price level. 

2. The condo was too generic and once released into the resale market it failed to distinguish itself from other condos therefore losing value

3. It was sold for a price that was too high for the features offered (often the case when additional value is derived from luxury brands) 

Buying a new construction condo is always a risk as you deal with an intangible asset and a list of promises. Although you never know if the developer will deliver what he promised, you can assess their track record to verify their ability to fulfill a promise and look back on their previous performance. With over 20 years of experience in real estate, we can offer insights into developers renowned for their exceptional condominium quality and those with a less favorable reputation.

Contact us today and learn our recommendations based on your needs!