RENT REFORM IS DRIVING NEW YORKERS AND CALIFORNIANS TO THE SUNSHINE STATE
The tax reform is not anymore the only motivation for locals to invest in South Florida real estate!
A few months ago we were saying that the Tax Cut and Jobs Act of 2017 was starting to push "high-net-worth individuals" to South Florida. As one of the few resources left to avoid high-income taxes, New Yorkers are now changing their primary residence to the state-taxes-free Sunshine State. However, nowadays there is a new reason for local refugees to invest in South Florida real estate.
Rent control in states like New York, Illinois, and California are creating a quick movement to a more flexible rental market such as Miami. In states like New York, for instance, the recently passed rent reform restricts the rent increase on stabilized apartments. Same for California where annual rent increase is limited to a 5% after inflation.
More property investors from these affected states are getting rid of their current investments and are coming to South Florida willing to close some deals. Mostly this trend is interested in more urbanized areas such as Brickell, Little River, and Little Havana.
The rental market in South Florida has remained strong, which has pushed prices up and even has ranked Miami as the most rent-burdened market in the U.S. Rent prices have increased 15-20% over the last 8 years.
VIRGIN HOTEL TO OPEN IN BRICKELL
A 25,000 sqft lot in 1040 S Miami Ave has been booked for the Miami-based Virgin Hotel. With an expected delivery in 2023, this 250-room hotel will be a mixed-use project in the heart of Brickell, Miami.
This 40-story project includes 15 floors of furnished residential micro-units and co-living units. Hotel amenities will include a three tiers pool lounge terrace, an event room, a bar/ restaurant, a rooftop, car elevator system for the valet parking and more!
LESSONS LEARNED THIS MONTH
As last month, here are some interesting lessons learned this month:
- Permits: Close permits:
In order to sell a house or a condo, the seller needs to have closed all open permits with the city of Miami. Permits are open when the owner/contractor starts a remodeling and closes the permit with the city when the remodeling is finished and done according to code.
Last month my office sold a beautiful unit for around $1M, totally gutted out by the seller and remodeled to perfection. One week before the closing, the closing agent noticed while doing the title search that 3 permits had been opened a few years ago but never closed. We were about to have a heart attack since it could take up to 2 months to re-open and close all these permits. Finally thanks to acquaintances at the city we were able to close with only 1-week delay.
Lessons learned: Always ask the seller ahead of time if the renovation was done with permits and if they were properly closed since it can delay a closing.
- Future assessments disclosure:
Two months ago I sold a friend's townhouse in South Beach. She mentioned to me that she had heard that at some point there might be some building renovation to the foundations. She didn't know the price. When I asked the management if there were any planned assessments they denied in writing. However, when the buyer did his condo interview he verbally learned that there could be at some point an assessment from $5,000 to $15,000 per unit. The buyer was furious because we hadn't disclosed it even if the price and feasibility were still pending.
I had to renegotiate the sale price of the unit to incorporate this new figure.
Lesson learned: Always talk to the building management because in the conversation you might learn some things that are not in black and white yet but can impact the transaction. Also always disclose items even if they are not written in stone.
WHAT TO DO IN MIAMI IN OCTOBER?
October is here and it brings some interesting alternatives for you to get out to the streets and enjoy the lively city of Miami.
Here are our top-3 events that you shouldn't miss this month:
1. Miami Carnival (October 5th-13th): This festive event brings a full schedule with plenty of activities such as parades, music trucks, steel bands, business expo, carnival concerts, and lots of authentic food and drinks options.
2. Grovetoberfest (October 12th): If you are a beer enthusiast, this event should be on top of the list! This all-inclusive beer tasting experience has been designed for those craft beer lovers. Tickets start at $44 for the general admission that includes unlimited beer samples from over 400 breweries.
3. South Beach Seafood Week (October 22nd-26th): South Beach hottest seafood restaurants gather to welcome the annual stone crab season with this remarkable festival. Different deals every day from the best talents of South Florida. Some of the host restaurants are Joe's Stone Crab, Chef Showdown and Crabs Slabs & Cabs.
DEAL OF THE MONTH: 5 ISLAND AVENUE #5C
- Recently reduced: $699,000
- Unobstructed Biscayne Bay views
- 1,305 sqft
- 2 beds / 2 baths
- Maintenance fee: $820/month
- Price: $535/sqft