Is Buying a Second Home in Brickell Right for You?

GSM International Group November 23, 2022
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There’s a lot to love about living in Brickell, and many people are choosing to invest in luxury property in the area. Perhaps you’ve been thinking about this as a possibility, but you have some concerns. We compiled several key questions that potential investors should ask themselves before they begin shopping for luxury homes for sale in Brickell.

1. What does the buying process look like?

Buying a second home requires a great deal of time and energy. Although the outcome is usually well worth the effort, the entire process can take several months and will likely require plenty of phone calls, walk-throughs, meetings, and paperwork. Remain patient and diligent throughout the process while keeping the end goal in mind.

2. Are my finances in order?

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In some ways, the process of getting your second mortgage won’t be any different from when you applied for your first home loan, but there are a few key differences to consider. Lenders may require a larger down payment or a higher interest rate if you’re seeking to secure a loan for a second home. Additionally, if you’re purchasing a luxury home in Brickell, you may need a jumbo loan. These types of loans often require a more extensive credit check and a higher debt-to-income ratio than other loans.

As you begin to shop for homes for sale in Brickell, it’s never too early to speak with a lender about your options. Remember that interest rates can vary from lender to lender, so shop around.

3. What is life like in Brickell?

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Brickell is one of the fastest-growing neighborhoods in the entire Miami area, and it’s constantly buzzing with activity. Most people consider Brickell to be Miami’s finance district, and most buildings offer pristine lounges and valet parking.

The weather is pleasant and warm year-round, with average daily highs never reaching below 70 degrees. Many young professionals live in the area and they rave about Brickell’s fine restaurants, eclectic shops, and thriving culture and community. There’s always something to do!

4. What kind of ROI can I expect?

Home prices in Brickell have risen considerably over the past year. Because of Brickell’s rapid growth, and the strong appeal of living in the Miami area, it’s safe to expect your property to maintain its value over time. To determine exactly how much your property might raise in value, talk with your realtor. They’ll provide insights as to where the market might be in the coming months and years. With this data in hand, you will understand what price you may be able to command when you choose to sell in three or ten years.

Since this will be a second home for you, how will you use the space when you aren’t in Brickell? Rather than leaving the property vacant, you could list your home as a rental property. This is a great way to earn passive income because many people enjoy vacationing in the area. Keep in mind that there are tax implications to owning and operating a rental property.

5. How will this property impact my taxes?

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If you rent your property for more than fourteen days in a given year, you must pay taxes on the rental income. This doesn’t apply if you rent your home for fewer than fourteen days; in this case, you would not be able to claim any deductions on the home besides mortgage interest and property taxes. If you claim rental income, you can claim repairs and utilities as deductible business expenses on a prorated basis. Also, remember that when you decide to sell your home in the future, capital gains taxes must be paid.

6. Are there upgrades needed on the property?

Some people prefer to buy homes that are move-in ready. However, many homeowners enjoy taking on various projects or adding a personal touch in their new home. Most Brickell homes feature newer upgrades and elegant touches, so it’s likely you won’t be buying a fixer-upper. Once you’re moved in, however, consider minor changes or updates that suit your preferences, such as changing the paint color or installing new flooring.

7. How much time will it take to maintain the property?

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In many ways, a home is a living and breathing organism. Upkeep is a regular expense and an ongoing obligation, and if you’re going to split your time between the Brickell residence and another property, put a plan in place to make sure your home is always taken care of. Consider investing in a regular contractor or property manager who can perform maintenance and prepare the home for inclement weather if the threat presents itself. You can also hire service professionals for individual services such as landscaping, cleaning the pool, or professionally sanitizing the home’s interior.

8. Who can help me?

Once you’re certain that a second home in Brickell is the right investment for you, reach out to the GSM International Group. They work with clients around the world and have access to stunning homes for sale in Brickell. The team would love to get to know you, answer your questions, and help you get started on your home search journey.

*Header photo courtesy of Shutterstock

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