Miami can be a great city for long distance real estate investing. People from other US states invest in Miami, and it is also popular among foreign investors. Beyond buying investment properties, many investors consider buying a second home in Miami. It can offer a place to stay when you check on your investments or be a vacation home or a home for you to retire in. However, you’ll need to consider financing options for long distance investors.
Miami Real Estate Market Report
At the time of writing, the median home sales price in Miami during May 2023 was $575,000. However, real estate trends can shift quickly. If you need help buying or selling real estate in Miami, click this link to contact us.
Financing Options for Long Distance Investors Looking to Buy a Second Home
Paying Cash
If you have the funds, paying cash for a second home might be the best option. However, we are not talking about literally paying with hard cash. We mean paying without borrowing. It means paying with available funds from a bank account or other source.
There are several advantages. First, you won’t need to pay interest on a loan; the property is yours from day one. Cash buyers are also more attractive to sellers since it makes for a faster closing. The main downside is that you are tying a lot of cash up in the property. It won’t be a good idea if you need to spend most or all of your liquid funds.
Mortgages
A mortgage could be an option for buying a second home in Miami. With a mortgage, you can keep more of your funds in reserves. It can also open more possibilities since you can borrow more than you have on hand.
The requirements are tighter, and the costs are usually higher. For example, most lenders will want a larger down payment from foreign borrowers. However, mortgages are generally less available for foreign investors than for US citizens. The approval process might also take longer.
Having a Green Card or Work Visa
The borrower’s visa status may also play a role in mortgage approval. Lenders might be more willing to offer loans to people with green cards or work visas. It can also open more borrowing options. Depending on the type of visa, you might be eligible for FHA or Fannie Mae loans.
Borrow Against Equity
If you already own property in the US, you can borrow against the equity. Lenders might be more willing to issue a loan with equity from an existing property as security. If you already live in the US and own a home, you can use the equity to borrow. You could also use the equity from investment properties. However, the lender will limit the loan size based on the amount of equity you have in the property.
Invest in Miami Real Estate
Are you interested in long distance investing in Miami? Contact Marion Ott for expert real estate services. Marion is a local real estate professional with years of experience helping foreign investors. Reach out now to learn more about how she can help.
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