It’s no surprise that Miami real estate is one of the top investment destinations for international buyers, with Argentina being one of the top Latin American groups buying Miami properties. Many high profile projects are being bought and put in motion by Argentinian nationals – for example, the world renown, 66 story Aston Martin Residences was developed by G&G Business Developments, a Miami-based firm owned by an Argentinian. The Oceana branded condominiums in Key Biscayne and Bal Harbour were created by an Argentinian art collector. Argentinians have also been quietly launching restaurants and many other businesses in Miami. They are boosting the market with their desire to work, play, and live in Miami’s multicultural environment as well as invest in its development.
While Miami is generally considered to be a “safe” place to invest in due to its relatively stable real estate market, it is important for Argentinians to know these key factors when purchasing Miami property:
Why Invest Abroad?
Other than the world renown, luxurious lifestyle, Miami has advantages over Argentina when it comes to property investment. Due to the country’s weakening peso and an inflation rate of about 25 percent, many expats are desperately moving their money into American real estate. The dollar restriction has caused Argentina’s own real estate market to decline, prompting those with properties to sell in dollars rather than pesos. “There are few profitable investments left in the country”, said Eduardo Blasco, a financial consultant in Buenos Aires. Argentinians are saving and making more money through renting while investing into Miami properties. It is safe to say that Miami is a “safe haven” for this group to make lucrative investments.
The Right Mortgage Lender
Argentinians, like many other foreign buyers from Latin countries, often purchase property with cash – many times because they believe this is the only way to do it. However, working with mortgage lenders has its advantages – it allows the buyers to secure assets while keeping their capital fluid and ready to invest in other opportunities simultaneously.
The key here is to choose the right team that is familiar with your home country’s customs and processes. While there are many great real estate professionals in Miami, When choosing a real estate broker, it is highly advised to pick one who has experience and knowledge with international real estate specifically. Same goes for the morgage lender.
What to Expect
Mortgage lenders for foreigners require a review of the client’s bank history and transactions to ensure they can afford the loan and also be asked to pay a deposit, normally of at least 35% up front. When choosing a mortgage lender, Argentinians should prefer one who not only speaks the same language, but who also has knowledge of Argentina’s economy, customs and processes as well. A mortgage lender in Miami for Argentinians that knows his or her way around the south american market could make the process easier and safer.
Before the Deal Seals
Proper tax planning when purchasing South Florida property is essential to making sure you don’t pay unnecessary taxes or worse, end up with an investment that isn’t as profitable as it could be. It’s important to be aware of the consequences that can result from not planning properly when closing the deal. These consequences can vary, depending on the ownership (individually or through an entity) and how the buyer plans to use their property whether it will be personal, for vacation, or for business. Expats need to make sure potential tax liability for them as individuals can be reduced and or completely avoided. Buyers should organize their planning with tax professionals in their home country to assure that any U.S. tax planning does not lead to any unexpected tax consequences back in the buyer’s home. It is very important to schedule a talk with a U.S tax professional before closing on the transaction to guarantee the purchase is properly aligned with the buyer’s goal. In many cases, it is difficult to unwind the deal if accidental tax costs occur. It is strongly advised to make proper tax planning a priority when purchasing Miami real estate. One way to purchase properties in the U.S. as a foreign buyer is to form a domestic L.L.C. that is foreign owned so the asset belongs to the buyer’s domestically owned L.L.C, therefore being treated as citizen owned property and being subject to less taxes. This is just one method of many that can help reduce unnecessary costs.