Why You Should Buy a Miami Pre-Construction Condo

Miami Condo Skyline

With over 170 residential condo towers currently in planning or construction stages in Miami-Dade County, it is important for you to know why you should buy Miami pre-construction condos while you still can!

Pricing Tiers
Miami pre-construction condos are usually sold in tiers, meaning that only a limited amount of inventory is released at a time to take advantage of supply/demand. If you purchase a condo during the first tier, which is also referenced as phase 1 pricing or friends and family pricing, you can lock in a price below any of the other subsequent tiers.

For example, sales at Paramount Miami Worldcenter condos were launched last week. Of the 470 total condo units in the building, only 60 units were released and are available with tier 1 pricing. Prices for these 60 units start at $533 per square foot. Once these first tier units are sold, the developer will raise prices for tier 2, tier 3 and so on. Furthermore, a tier 1 buyer can secure a condo at $533 per square foot whereas a tier 4 buyer could purchase the exact same unit on a lower floor but pay 10%, 20% or even 30% more.

Built-In Equity
Miami pre-construction condos also provide investors with instant equity because of the pricing tier model. Not only will you see equity by purchasing in an earlier tier, but you will also gain equity naturally though market increases in the surrounding buildings and neighborhood. It usually takes about 2-3 years to complete construction, and the condo market in Miami can change dramatically over that time period.

For example, I have a client that secured a Bay House condo in Miami’s Edgewater neighborhood during tier 1 at $397 per square foot. Bay House is now 95% sold out and is in final tier pricing. If you analyze all of the waterfront, new construction projects in Edgewater, the average price per square foot is currently around $600. My client is looking at equity of over 30%, and he hasn’t even closed on his unit yet! If he decides to sell the unit after closing, he will receive a great return on his investment.

Pre-Construction Condo in Brickell

Resale
“Flipping Contracts” was quite popular during the last condo boom but is frowned upon today by developers. The solution to this is simple…keep the condo for the entire term, close on it and then sell. Since construction takes between 2-3 years, this allows an extended amount of time for the condo unit to increase in value. Miami is a truly unique city with a one-of-a-kind luxury condo market that attracts people from all over the world. There will always be a high demand for condos from international buyers.

For example, I have 2 clients who purchased pre-construction condos at Millecento, which is located in Brickell. They are ready to sell their units as soon as closing occurs, which should be in Q1 2015. Both of them paid $400 per square foot for their units even though today the average for a new construction condo in Brickell is about $600 per square foot. These sellers are going to get more than a 30% return on their Miami pre-construction condo investment. This enormous growth is providing investors with an extraordinary resale opportunity.

The most important aspect to consider when purchasing a Miami pre-construction condo unit is choosing a Miami real estate agent who you trust AND is a Miami condo specialist. This is crucial since there are currently over 170 condo buildings being built in Miami-Dade County. If you are looking for a Miami real estate agent who you can trust, has sold many pre-construction condos in Miami and has direct knowledge, inside and out, of the entire Miami condo market, then I am the Realtor® for you!

If you are interested in purchasing a pre-construction condo in Miami, please contact me on my cell phone at (786) 566-1700, at my office at (305) 350-9842 or via email at michael@miamiluxuryhomes.com.

And remember, the Miami pre-construction condo market is hot!  Condos sell extremely fast during early tier pricing, so put in your reservation today.