Single-family home sales above $5M have surged 225% in Miami over recent years. However, it isn't just the high-end market that's experiencing a boom. Miami's desirable weather, growing economy, and relaxed mask mandates have made it one of the most in-demand locales.
The increase in desirability also makes it a prime location for real estate investing. However, this highly competitive market can also present several potential pitfalls for new investors.
Avoid these five investment mistakes and reduce your risk on your next Miami property purchase.
1. Not Having a Plan
You should always have a plan, no matter what type of investing you do. When it comes to real estate investing, you should have short and long-term goals. The first step is deciding what type of real estate you want to invest in.
Then you need to decide what you want to do with your property. If you decide you want to buy residential property, you'll want to consider whether you're looking for a single-family home or multi-family building.
2. Ignoring the Numbers
No investment is without risk. The advantage of real estate investing is that you can reduce your risk by analyzing the numbers.
Real estate investing in Florida changes depending on where you are. The strategy you use in Jacksonville is different from the one used in Orlando, Tampa, or Miami. Understand the local market when looking at the numbers.
Miami real estate investing is highly competitive as it's one of the fastest-growing cities in the United States. Property values are increasing as land is limited and growth is focused on the redevelopment of low-income areas.
3. Making It Personal
Too many investors forget that this isn't about buying their next home. They make the investment personal by only looking for what they would want. They lose sight of what potential tenants want.
Always remember that you aren't looking for your next dream home. What you are looking for is a property that can make you money. It could command a high rental rate, be poised to increase in value, or both.
4. Going at It Alone
As a beginner, there are several pitfalls that you could fall into and not even realize until it's too late. Trying your hand at real estate investing on your own is a recipe for disaster. Investing in real estate with the guidance of an experienced property manager can prevent many common beginner mistakes.
Your property manager can provide you with a comprehensive property analysis, tenant screening, and property management services.
5. Not Accounting for Repairs and Maintenance
If you want your real estate investment to maintain its value, then you'll need to plan for maintenance and repairs. Otherwise, your property's condition will decline, and with it, its value.
You should set aside a percentage of the rental income each month into a reserve account. Then use this money to pay for property upkeep. Plan to make strategic upgrades that will directly increase the value of the property.
Avoid These Real Estate Investing Mistakes
If you're new to real estate investing, you're already ahead of the game by looking out for these five common investing mistakes. Working with a local Miami property manager will help you avoid others that aren't listed here.
Contact our skilled team of property managers and start investing in Miami real estate.
