Miami real estate prices are at historic highs, and previously excluded investors will be profiting from it.
According to Redfin, the Magic City’s homes saw a slight price dip earlier in 2022 and then made a spectacular comeback. Year-over-year, the prices rose by 23.5% in one of the country’s most expensive real estate markets. Despite that, the number of investors looking to profit from future price surges is also on the rise.
An original investment solution geared to return at least 12% annually allowed thousands of nonaccredited investors to own shares of Miami’s real estate, and that may very well be only the beginning.
Nada, a real estate startup that’s been shaking up the market recently, introduced its newest product called Cityfunds, a way to buy stocks of the entire city’s real estate. Here’s how it works: The company acquires real estate in rapidly growing urban centers, creates exchange-traded fund (ETF)-like stocks for each city and then sells them to investors for a minimum of $250.
It allows almost anyone to profit from the historically most reliable asset class while minimizing the risks. Cityfunds’ stocks represent a fraction of many different residential Miami homes, meaning that diversification is already taken care of.
When it comes to future appreciation potential, experts have strong reason to believe more price hikes are on the horizon. The state of Florida estimates that 330,000 people will move to Miami in the next decade, steadily driving real estate prices even higher — despite Miami already being one of the most expensive real estate markets.
As Redfin showcased, the median price for a Miami home sold in September stood at $530,000, so naturally, investors are flocking to the benefits that Cityfunds offers for a comparatively minuscule barrier of entry.
Nada already has 4,000 investors and is looking to increase that number fivefold by the end of 2023 — a goal that will be much easier to achieve with the $8.1 million that the company’s founders secured in a seed round earlier this year.
Apart from attracting new users, Nada’s teams are soon rolling out their magnum opus — Cityfunds stock trading. Once it goes online, users will be able to sell their shares for a profit and possibly drive the price much higher than its current $10.
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