Friday, July 27, 2012

Burgeoning Increase in Doral Rentals Propels New Construction

Part of everyone’s American dream is the ability to own one’s own home. While this vision has not disappeared, it has faded a bit in South Florida, as one of the most prominent trends occurring in the world of Doral real estate is the increasing demand for rental apartments. Developers in South Florida are responding to this tendency by initiating many new construction projects.

The reason for the growing trend couldn’t be simpler: many people cannot afford to buy a home. Of course, there will always be that segment of the population who will prefer to own Doral real estate, and still another who will simply favor renting over purchasing.

In the words of Mahesh Pattabhiraman, chief lending officer for Miami-based Apollo Bank: “A lot of people with bad credit won’t qualify to buy a home. And because of the crisis, some people are not convinced it’s the right time to buy… Rentals will be in demand for a while. The pendulum has swung.”

Rentals have some distinct advantages over purchasing a home. These include but are not limited to: a flexibility in lifestyle, freedom from property taxes and condominium fees, and not having to pay a huge down payment, which can put a damper on Doral real state dreams rather quickly. 

This rental trend is not limited to South Florida but it is thriving there with quite a few rental apartment projects in the works in cities ranging from Plantation and Davie to Doral and Coral Gables.

Developers of Doral real estate who specialize in luxury condominiums and industrial parks are now shifting their focus to rental apartments in order to ride the financial wave of the increasing demand for apartments and the serendipitous availability of financing. Since the course of the condo-conversion mania of the last decade, very few professionally managed apartment buildings remain.

One of these rare apartment rental projects is One Broadway, at 1451 South Miami Ave. in the Brickell area, which was built in Miami during the last boom. This apartment complex consistently maintains an above 95% occupancy rate, attracting mostly young and well-to-do professionals.

There has been a steady increase in the amount of rentals in downtown Miami as well. According to Craig A. Werley, president and CEO of Focus Real Estate Advisors LLC:

“Rents jumped 11 percent in downtown Miami from the first quarter of 2011 to the first quarter of 2012. Rents are rising in other neighborhoods as well, though typically more modestly.”

The desire for a steady stream of revenue has propelled Doral real estate developers and investors in the direction of long-term ownership of apartment buildings. The expectation is that much of the new rental construction will eventually become converted condominiums.

 In the meantime, rentals anyone?

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