Are you looking for an investment opportunity that doesn’t require taking out a loan? Well, look no further! Florida is the emerging hotspot these days, and it’s drawing attention from investors worldwide. Just ask Victor Contreras, a mining engineer who recently purchased a piece of land in the Sunshine State. Intrigued by the rising prices of properties in Chile, Contreras decided to explore other options and ended up buying a 1,000-square-meter urbanized plot in Florida for a mere $18,000,000.
A Surprising Discovery
Contreras had initially considered investing in a second property in Chile but was taken aback by the exorbitant prices. “They were all around 1,000 UF, generally starting from 1,500 UF, which is almost $50,000,000. It was too much for me. Real estate in Chile is expensive,” he explains. However, when a family member mentioned purchasing a 1,000-square-meter plot in Florida for less than $20,000,000, Contreras was immediately intrigued. He contacted the seller, an investment real estate company called Owny.us, and, after gathering information online, took the plunge.
The Potential for Growth
Contreras purchased the plot without any specific plans in mind. Instead, he intends to wait and observe how its value appreciates over time. He believes it’s unlikely that this type of real estate will lose value, so he feels secure in his investment. “I’m happy with it. It’s my first piece of land,” Contreras says with enthusiasm. The plot doesn’t have any common expenses, and the only obligation is the property tax, equivalent to 1% of the fiscal value of the real estate. Contreras isn’t the only one venturing into this new niche of investing. Many Chilean investors are turning to the United States, specifically Florida, in hopes of capitalizing on the potential for growth and increasing property values.
The Appeal of Florida
Unlike Chile, where the controversy over rural land being used for residential purposes has raised concerns, the plots available for purchase in the United States are located in urban areas with high growth potential. Florida, in particular, is proving to be extremely popular, offering plots near the beach or major cities. Prices range from $16,000,000 to $200,000,000 for 700-square-meter plots, with some options available for under $10,000,000, depending on the location. They resemble the once-deserted lots in Chicureo or La Reina 15 to 20 years ago.
Lower Risk, Simpler Management
Investing in land offers several advantages over traditional real estate. These plots are simpler to manage since there are no property managers, monthly fees, or insurance to worry about. Additionally, they can be purchased as an individual, without the need to form a company. Alan Ferszt, the founder and manager of Owny, has personally invested in two plots to finance his children’s education. “My plan is to sell or transfer them when they go to university. In the areas where we have land, the average appreciation has been around 8% per year,” he reveals.
Location Matters
Sergio Fajardo, the CEO of Smart-choice.cl, another real estate investment company, advises potential buyers to consider the location when selecting a plot to ensure it can be resold at a good price. “Many plots are being sold without water and sewer connections, and installing a well system costs $20,000,” he cautions. Therefore, it’s better to buy a plot that already has these amenities in place. Look for plots in urbanized areas with streets and services, close to the beach, and avoid rural locations. Many people are moving away from cities like San Francisco and New York, searching for affordable plots with good connectivity.
A Peaceful Lifestyle
Cristián Martínez, the founder of Crece Inmobiliario, another real estate company, explains that these neighborhoods offer a quieter lifestyle. With fewer residents, they allow Americans to enjoy a peaceful life, retire, or build a second vacation home near their primary residence. When buying, it’s crucial to purchase insurance to guarantee that the property has no issues. If any problems arise in the future, the policy covers them, and the money is refunded. Fajardo emphasizes that additional costs, such as the insurance and county registration fees, need to be factored in when buying a plot. It’s worth noting that banks don’t provide mortgage loans for this type of investment, but some companies include these expenses in the plot’s price.
Investing in land in the United States is an exciting prospect for Chilean investors. With the potential for significant appreciation and no immediate need for construction or residence, it’s a low-risk opportunity worth exploring. Whether you’re a seasoned investor or looking to dip your toes into the world of real estate, consider the possibilities that await you in the land of opportunity.