No carrying costs during the 2 waiting years before condo is built. You don’t need mortgage, no taxes to be paid, and generally no expenses at all. The best thing is that you do not need to manage tenants which can be a real headache for real estate investors. Also, you do not need to pre-qualify for mortgage. So, regardless of your credit history, developers will sell you a unit.

If the condo for example priced at $200K, typically, in the Miami market, developer would require 20% deposit. 10% at the time you receive the contract and another 10% when the construction begins. Your total cash out would be 40K which is 20% of 200K.

MIAMI MLS

ORLANDO MLS

TAMPA MLS

Miami real estate market has been appreciating over 25% every year. Let’s assume Miami real estate will appreciate 20% annually. By the end of the first year, this condo that has not yet been built would already have appreciated from $200K to $240K, which means you have made $40K on your investment of $40K—a 100% return in within a year. Thus, you are effectively doubling your capital every year.

There are some caveats you should consider. Real estate developers are business people in the business of building real estate. They understand the real estate market and they make the most profit by selling at the highest price. Put in mind that these developers have their self-interest at the forefront of their concerns.

Thus it is beneficial if you do your own research. The Internet can be a great aid in finding initial information. After doing some initial investigation and study of the dynamics of the Miami real estate market, search for a reputable real estate agent who understands the market and pre-construction to help you evaluate the options you have available.

If you have a middleman to a Miami real estate developer, you could actually be taking a big risk for the reason that the middleman is not held by any amount of loyalty to you in disclosing vital information. Middlemen are not working for you; they work for the developer. Go for an experienced and well-informed local real estate agent instead. Moreover, it is easy to find real estate agents who provide free service. They are paid commission by the developer and your price is the same.

Interest rates might not have great impact on Miami real estate since Miami is an international market with buyers from all over the world. International buyers are enjoying the extended buying power from the weak U.S. dollar, especially in Europe, and are thus heavily investing their cash in Miami real estate markets. Florida has very flexible rules towards foreign nationals who are buying Miami real estate.