How to buy condos in Miami and Dubai
Miami, Florida and Dubai in the United Arab Emirates are thousands of miles apart, separated by geography, cultural differences and political landscapes; however, there's more in common between these sunshine cities that you would think.
The first common thread is weather and climate; both cities are seasonal destinations with hot and humid summers but blissful winters that attract second home buyers from places with chilly winters; from the North East for Miami, and Europe and UK for Dubai respectively. The second similarity is attractive tax benefits, Miami boasts no state nor city tax, while Dubai does one better with no income nor capital gains tax! The third commonality is that both cities are at the forefront of new development and luxury high rises. With everything from branded residences, to architectural marvels built by starchitects like Zaha Hadid, city skyscrapers and waterfront marvels, buyers are spoilt for choice when it comes to buying condos in these cities.
The good news is that there are best practices to identify and acquire the ideal condo in both sunshine cities. This is how to buy condos in Miami and Dubai.
Work with a trusted developer
Rule number one is work with a trusted developer. With so many attractive off-plan projects mushrooming in both cities, it can be very tempting to go for something that looks great on paper. The golden rule is- know your developer. Look up their past projects, if buying pre-construction make sure the developer has a good track record in delivering on time. Also, don't be deceived by off-site sales galleries; it's very common that the end product doesn't live up to the model units. The best things to do when assessing pre-construction quality is to visit a ready building from the same developer to confirm the build and finishing quality, and also to carefully check the spec sheet in a new development contract; look for things like which appliance brands are mentioned, as well as details on finishes and materials to confirm they comply with what you see in the show home or model. If you are still nervous about buying off-plan property, go for a development that is in its late phase (within six months of completion) or completed.
Location really matters
Both Miami and Dubai share another quality that can make the homebuying process confusing; lots of options! As both cities are still growing, new communities are still being created as opposed to more established markets like New York City or Los Angeles- where no vacant land exists. In Miami and Dubai buying in a prime location really matters. Some of the most sought-after real estate in these sunshine cities are waterfront properties. Waterfront properties have special value as there can only be a handful of units with ocean views- which creates future value and higher resale demand. In some cases, waterfront views warrant higher rents. Waterfront properties that are accessible to the beach are in high demand for Airbnb and short-term rentals in Miami's South Beach, and in Dubai- the Palm Jumeirah; a man-made island shaped like a palm tree- dubbed the eighth wonder of the world.
However, if short-term rentals are your investment plan make sure that the building's HOA allows it. For city slickers Brickell and Downtown Miami are both hotspots. Brickell is perceived as more established and high-end, but Downtown Miami has been undergoing a revival with the recent addition of some landmark developments most notably One Thousand Museum by Zaha Hadid- a luxury new development with helipad, sky lounge, and wellness center-which upgraded Key Biscayne Boulevard and boasted record-breaking area numbers with David Beckham acquiring the 10,000 square foot penthouse there in the $20 million range. Downtown Dubai is always in demand; home to the world's tallest tower and world's biggest mall. Rule of thumb is; the closer to Burj Khalifa you get- the higher the property value is- the most valuable condos in Dubai have the best views of the tall tower.
What is your intention?
To make a smart investment in the sunshine cities it is essential to know what your short- and long-term goals are. If you intend to use the condo six months a year versus a week a year this dramatically changes your acquisition choices. For someone seeking a hands-off investment serviced condominiums are a good idea. Both Miami and Dubai have luxury condos serviced by named hotel operators such as the Ritz Carlton or the Edition. There are programs where you can give the condo to the hotel to manage and rent out and you can use the property a couple of weeks a year. A couple of things to look out for here; high HOA and management costs and the use of the property is usually off-peak (no major holidays); however, luxury branded condos demand much higher rents than standard apartments. If your goal is long term appreciation buying pre-construction may be the way to go as the further out the delivery date is the lower the acquisition prices. If the goal is high rental returns, then the safest investment is a ready condo that already has a tenant in place guaranteeing income.
Always buy prime units
Buying condos are not like single-family homes in the sense that there may be hundreds of units in one development. The more units exist in a project the more important it is to buy the prime units. How do you define that? Think what makes sense to an end user- good logical floor plans, the best views and in skyscrapers its best to avoid low floors as higher floors usually have more demand in the resale market. If dense living or high rises aren't for you then purchasing in a boutique development may be the best plan; in Miami an example would be Villa Valencia in Coral Gables- a small development of only 39 units with 19,000 square feet of amenities. In Dubai, single-building projects in prime locations such as the Four Seasons Residences at Jumeirah beach or One Palm Jumeirah.
Understand what the market currently needs and wants
Another common thread between these sunshine cities is the fast-paced ever-changing market dynamic. As both cities are still growing, housing needs can shapeshift and it's important to understand the economic and social drivers in the market.
For example, Miami has recently been experiencing the relocation of large corporate headquarters from New York city and a tech boom in this Covid 19-era, also more people will be working from home permanently- therefore there is a strong near future demand for office-condos. Dubai has been taking advantage of the exodus from Europe and the UK for two main reasons- the tax advantages and the ability to get a lot more for your money than back home. The tax advantage means high rental yields are achievable so acquiring condos with a 6-8% are highly viable.
In conclusion- all real estate investments pose an element of risk, but conducting due diligence, knowing your investment intention and relaying that to a qualified local real estate agent from a credible brokerage firm is essential to maximize the best outcome for success in these sunshine cities.