BAC Florida Bank's real estate buyers' checklist: have you done your homework?

Latin Trade, Feb, 2004

While many Latin Americans are attracted to real estate ownership in South Florida, those that reap the benefits of profitable purchases plan well and have some local knowledge.

"It used to be difficult for foreigners to finance their real estate purchases in Florida, but now it is much easier," said Jeff Gross, managing director of real estate lending & investments for BAC Florida Bank--the pre-eminent foreign national lender in South Florida. "The result is that a lot of potential buyers are eager to jump into the market. But you have to be cautious and Jeff Gross, Managing Director of Real Estate Lending take the time to think through the process."

He maintains that investors who buy South Florida property expecting a positive return over the long term will not be disappointed. But those looking for a short-term profit run the risk of not meeting their goals. Because the inventory of condominium units is currently increasing and interest rates are starting to rise, although slowly, it is particularly important now to make certain that all potential purchases are researched. To decide whether purchasing property in South Florida is the right decision, Gross suggests the following:

Visit South Florida First

It is important to tour the area and learn its neighborhoods to obtain a sense of which are the most appealing and the most desired for varying types of buyers.

Talk with Several Real Estate Agents

Talking with various sales experts will provide a broad sense of the types of properties, neighborhoods and lifestyle amenities that are available and popular, as well as a good knowledge of the price range for real estate by area.

Compare the Details of a Likely Purchase with Others that are Similar

Once a property emerges as a likely candidate for purchase, compare it to others that are similar. This comparison should include price, features, location and age.

Be Prepared to Carry the Full Cost of a Property

Make certain that there is a record of all costs associated with the property being purchased. If it is to be used as an investment, be aware that the rent derived from tenants may not always cover in full all of the costs involved--especially if the market is dictating lower rental rates. Usually the costs involved in ownership are the principal and interest of the mortgage loan, real estate taxes and condominium association maintenance fees or a reserve fund for home maintenance.

Be Aware of Real Estate Trends

* Pay attention to properties in the $200,000 to $500,000 price range. This is now considered affordable housing in South Florida.

* Land is becoming more scarce in South Florida, so developers are building more condominiums. Single-family homes in popular areas are becoming hot properties.

* Oceanfront and waterfront properties in general are still the most desirable.

Knowledge is Key

Buying real estate is a complicated and expensive endeavor. But the purchase can be well worth the effort if approached with knowledge of all relevant issues.