Why Miami real estate is the favorite investment of Latin Americans

Economic stability, infrastructure, low taxes and profitability in dollars are a strong attraction for people from countries with devaluations and tax pressure. In addition, there are huge communities in the region and Spanish is spoken.

At the end of the 444th century, Miami was a hamlet of 1959 inhabitants around a railway project. In the first half of the XNUMXth century, it was promoted as a tourist destination, with night clubs and Havana-style orchestras that gave the beach its tropical atmosphere. It was already an emblem for retiring in old age —a place without winter— when the first wave of emigrants from Cuba, after the XNUMX revolution, changed its face.

Today 51% of the 2,76 million people who live in Miami-Dade County were born abroad. The predominant ethnic groups are of Hispanic origin: 34,3% Cuban, 10,9% South American, 8,5% Central American, among them.

Those who buy the most properties —whether they live there or as an investment— are, predictably, Latin Americans: according to the Florida Association of Realtors, Argentines represent 13% of all buyers, followed by Colombians (12%) and Venezuelans (10%).

Mexicans, who appear in sixth place after the Chinese and Filipinos, are those who prefer the most expensive properties: they choose homes five times more expensive than those bought by Argentines, who prefer the cheapest.

After the market crash in 2008, which severely affected the Latino communities in South Florida, both former residents and immigrants, Miami has bounced back. Currently, in fact, there is a notable increase in sales and rental prices: after the pandemic, Canadians, New Yorkers and Californians have come to the beach in search of good weather and low taxes, and their pressure on the market has added to that of Argentines, Colombians and Venezuelans.

For Latin Americans, the historical reasons why Miami has been their favorite investment destination, large and small, in the entire region remain. From Mexico to Chile and Argentina, the countries present political oscillations and economic instability; the quality of life is inferior to that of the United States and violence abounds, particularly in places affected by gangs and drug trafficking.

There are also cultural reasons: the proximity between Florida and Central America and the Caribbean facilitated contacts and for the upper classes of many countries owning a property in Miami has been a status symbol throughout history. The predominance of the Spanish language, even in counties to the north, such as Broward and Palm Beach, makes it very easy for non-English speakers.

According to Miami Partners Realty Group, it is estimated that almost 1.400 multinational companies have chosen Miami as the headquarters for their offices for the Latin American market and commercial exchanges between the city and the countries of the region accounted for 40% of the total.

For political reasons similar to the Cuban case, the Venezuelan population increased 116% between 2000 and 2010 —there is a Little Venezuela, the town of Doral— and the Central American population, driven mainly by the Nicaraguan population, 65 percent. The elections in Mexico, Chile and Colombia seem to have also influenced the increase in investment and population in those places, and in the case of Argentina, the main driver has been, as in 2001, the economic crisis.

A survey by the consulting firm Real Time Data (RTD) revealed that for 96% of Argentine savers the situation in their country is fair to very bad, and for 90% it will not improve in the next two years. Bolivians have similar opinions (89% and 85%), followed by Mexicans (87% and 78%) and Peruvians (87% and 81%).

These investors prefer Miami to put their money in real estate (mainly), technology and construction: 24% named the city, and 21% New York. They were followed by Orlando, Boston, San Francisco, Chicago, Los Angeles, Columbia and Houston.

Among the reasons, infrastructure stands out: Miami airport is the third largest in the United States, but its area of ​​influence also has first-rate highways, ports, hospitals, schools, hotels, and recreational spaces. The Brickell area is home to the highest concentration of international banks in the country. Location also matters: the Florida peninsula is strategically located between Europe and Latin America and has more than 100 consulates.

The state's economic strength (it ranks fourth in wealth production in the United States), low taxes, and profitability in dollars are a strong attraction for people from countries where currency depreciation and tax pressure are constant. . In addition, the country offers legal security and the city makes operations very simple: you don't have to live there to invest (although it's not enough to invest to live there, unlike places like Spain).

Opportunities do not start in the millions: a capital of USD 100.000 can work in the Miami real estate market. Foreigners also have access to credit (although rates are currently higher than the usual historical level) and in many countries there are companies that arrange financing for residential and commercial properties in Florida. That is why it is common for hotels to hold seminars in Spanish to learn how to invest in real estate.

Traditional investments in the real estate market leave an annual income of 4% to 8%, but Miami also offers other more interesting formats —from 8% to 12% per year— such as participation in specific developments. With 34 municipalities to bet on and historical familiarity—Miami is jokingly said to be the capital of Latin America—South Florida's most famous county remains a favorite for savers in the region, both to settle and to secure capital.