Miami Real Estate -- good opportunity?

I know this is a nyc re site...but..every once in a long while something creeps in to a thread.

It's ok Jim, there are alot of New Yorkers that have condos/homes in Miami/Florida!

Depends what you consider an "opportunity." If you are looking to buy a condo and see positive cash flow month-to-month, forget about it. Prices in Miami are down significantly, but not to the point where you can make money as a landlord. This is especially true in the Brickell area.

You can, of course, buy a condo in one of the Brickell high-rises and hope that you can make money on an eventual resale in 5-7 years. But with the extreme oversaturation of the condo market, that's still something that is far from assured--you could be stuck holding a no longer new unit in a still-saturated market several years down the line. Don't forget that there have been 30,000 new units built in the greater downtown area (including Brickell, downtown and Park West) over the last 5 years.

Feel free to contact me for more info if you'd like specifics on areas, buildings, etc. I'm not a broker but have done all the math and seen almost all of the buildings.

Its incredible that you still cant make money as a landlord. Doesnt that depend what you put down? Surely you can if you pay cash? Drum roll...what is the cap rate?

Very low cap rates if you pay all cash--low enough that's it not worth the risk as opposed to sticking the money into bonds. Also, there's a factor that many people overlook. The troubled finances of many of these "distressed" buildings in South Florida is an important consideration--condo associations will continue to fund their budget shortfalls (due to abandoned/foreclosed units) by imposing further rounds of special assessments on unit owners.

i bought in Sobe "north" at 29th st. an older established building with few foreclosures and short sales. i had no stomach for brickell or any new construction as they are too risky. i've rented the unit and am not covering my costs but am pretty darn close. in fact the price to rents ratio is the best i've ever seen it for miami.

cfranch, what is annual rent as percentage of purchase price? How about maintenance & taxes, again as percentage of price?

isn't hurricane insurance a big factor there in terms of monthlies....(and also,is the whole cancellation risk or better put escalation of premiums risk a significant issue or ..or ..or is that somehow magically resolved by the idiotic crist socialized screw-the-taxpayer underfunded state ins co.

Have any of you ever lived in Brickell? I have never been there but I want to check it out next time I am down there. Is it like living in the financial district in Manhattan? Do you still get that tropic feel even though there is no beach?

Even the Miami airport has a "tropic feel"...just transferring through that place with all the languages, and shorts,and bars...and bilingual bookstores etc...makes me feel like im already on vacation!

"the idiotic crist socialized screw-the-taxpayer underfunded state ins co."

Learn the deets - no private insurance company will provide wind or surplus flood insurance anywhere near the coast, or in Dade or Broward Counties at all. Hence the state fund. But the insurance companies DID manage to wangle in a provision that says that the state insurance must be MORE EXPENSIVE than free-market insurance for those places where you can get free-market insurance.

Hurricane insurance for condominiums in Miami can EASILY cost over $1,000 a month. When you factor in high property taxes, it's actually more expensive than living in Manhattan, with its income tax.

Sam, Brickell still has somewhat of a beachy/tropical feel to it. All of the high-rises (although not all of the units in them) have water views, some with 270 degree water views. Brickell Ave itself is only two blocks from the water. I worked in one of the office buildings here and had an incredible view of South Beach and the wide open Atlantic from the 50th floor.

Also, Brickell Key (a man-made island developed by the Swire company) has an incredibly relaxed, tropical island feel to it. Pretty remarkable since it's essentially in the middle of Miami's financial district. You can get a great deal in one of the dozen or so condo buildings there (prices range from the 200's to several million for a unit). Brickell Key is also where Miami's Mandarin Oriental hotel is located.

Stevehjx, as I understand it the state ins. co. is underfunded, which means,in the event that reserves are depleted either everyone's insurance isn't there, or the taxpayers have to bail it out, most likely the latter, which essentially means all taxpayers are subsidizing building on the coast (and I believe that the expected outcome is that Fla would lobby the US governement to help with the bail out, so everyone in America would be in on this). I don't know the details, but this is the impression I have from various excoriating editorials on the topic.

Wow, cool and timely thread. We are heading down there on Monday and meeting with an agent regarding several SoFi listings. However, it is absolutely clear that RENTING is still hugely advantageous over buying. Still, we will be the sharks, circling.....

There are also some great deals to be had around the west palm beach area depends what you are looking for...

inon: rental income is 87% of mtg, maintenance,taxes and ins. the problem with miami is that any bank taking TARP lending to buyers is insisting buildings have 100% flood insurance. most have 80% but are upping their coverage. not a big difference in the premiums. my purchase was a short sale which took several months to complete.

stevejhx-your estimates for hurricane insurance is high. I insure a property on the beachfront in Florida valued at $1.5 million and the hurricane insurance is $3000.

Thanks, cfranch. Is that with 20% down and what interest rate?

thanks Floridian good info to know.

Sam - I have not lived in Brickell but did live in another neighborhood in Miami for 2 yrs. I would not consider Brickell as a place to live. It's like downtown Phoenix -- a man-made "condo-land" with not much going on. Developers built high-rise after high-rise, in the belief that once residential real estate existed, restaurants, night life etc would follow. To some extent that has happened, such as "Mary Brickell Village". But it still has a man-made, concrete-jungle feel to it. Yes, you are close to "the water" - but for what? There's no beach there, no accessible water. Just some ugly piers. The attraction of Brickell was mostly to 30 year old yuppies who thought it would be great to have beautiful water views from the 20th floor of their condo. And the views are great. But there's no "there", there. Brickell is a soulless, empty shell of a neighborhood, and that's why prices plunged more there than Miami Beach, Key Biscayne, Coral Gables, or Coconut Grove - REAL neighborhoods with character.

Miami is projected to decline another 30% this year, according to several projections, so I see no need to hurry into an investment. If I were to invest, I think Miami Beach offers the best values. Like Manhattan, listing prices haven't fallen very far but NOTHING is moving there, and no one is lending. If you can go in with an all-cash or 75% cash offer, you can steal a place. That's not as expensive as it sounds; you can get a decent 2BR on the Bay side for $300K or so. On the Ocean side, much higher, but still falling.

hugh...thanks for your take...interesting

does "miami beach" include south beach?

A friend of mine owned a hi-rise in south beach bought in 98, which he sold in 04 after it doubled in price, and it is still listed at well above what he sold for...

I am intrested in a 1 bed on the ocean with lots of balcony. If I could find a good deal I would pull the trigger but it would have to be way below markket.

Great thread - also considering a place there. Realistically though how often would you go down (especially those of you with kids)?

I could spend maybe 4 weeks a year there but I could let buds stay there as well.

I recently went condo hunting in Fort Lauderdale.

A few observations. Yes, prices have dropped dramatically. But that price drop has largely just offset the huge bubble (relative to the country as a whole) that took place earlier.

Although Florida is known for its lack of income taxes, it largely makes up for this with high property taxes. Real estate taxes average about 2% on the "purchase" price. And they are modestly higher for non-residents than residents.

So, if you're just planning on spending a month or two each year in Florida it could be pretty expensive in terms of carrying costs. Don't expect you'll be able to rent out the place during the non-winter months either!

I do like Fort Lauderdale over Miami. But that's a personal choice. Think it makes better sense, though, to try renting first and seeing how I really feel about the area. Might even try a stay at the Ritz Carlton if I can get a good price on Expedia.

We bought on the ocean in Miami Beach thinking it would be a good investment and a place to spend a few weeks a year since we sold our country place in NY -- as well as our apt in NYC. We now rent in NYC. We love Miami and come here far more than we expected. Prices are still very fungible. I troll the foreclosure listings and there are some good apt values out there. We expected the big hit with hurricane insurance. Our total apt, hurricane and flood insurance is $2600 a year.

Any sense of what's happening in the Keys? It was always my fantasty to live half time in Key West and half in NYC. (Alas, right now my lack of income situation has made maintaining first residence the priotity and relegated second residence to highly unlikely). Over time I've realized that the isolation of KW makes that impactical: six hour travel time puts it out of reach of even long weekends and (a greater and greater concern as I get older) emergency medical care in KW is not first reate especially for being 3 hours from major medical center. So I've been thinking about the Keys closer to the mainland. As stated before, at this point, and any point in the foreseeable future, this is a purely rhetorical questoion.

Apt23, you're not including property taxes in that number, are you?

A Miami/warm weather real estate thread should be started every time we have a day like today.

my wife and I bought a place on the beach last may..700 sq ft studio with ocean views at a great price..we go down about every 6-8 weeks and rent it to friends occasionally..23rd/collins

Uhhhhh... how about the extra hr on security w/ the firecrackers on board? Howz that figure into having a 2nd home.

FWIW, I think you get 1 home mortgage ded, the 2nd is the gov't way of saying... consume away to oblivion... oh but god forbid we have a fat scale to determine health insurance premiums... the morality of it all....

Jim - yes Miami Beach includes South Beach, and much more (mid-beach, north beach). South beach is pretty much from the 20's on down to the point. 20's to 40's is more or less mid-beach, then north beath, then you get into Bal Harbour, Sunny Isles etc. All have their own personality. SoBe has more nightlife. Mid-beach is a little more "normal".

Liz - that sounds like a nice dream. If Key West is too far, how about mid-Keys, Islamorada etc? Not as much nightlife, but idyllic in many ways. Especially if you like to fish.

havent cruise ships kinda taken a lot of the weirdo verve and vibe out of kwest

DNR how much did youp ay and what is the annual cost to carry?

There is still great off beat life in KW, you just have to avoid Duval Street just as you would Times Square tourist traps if you are a New Yorker and the Murray Hill frat boy bars if you are over 35.

One of the things I like best about Key West is that the nightlife distinctions between "gay" and "straight" are much more fluid and there is a lot of integration just as there was in New York clubs in the 70s-80s. (Ihat can lead to misundersting/disappointment as well. I will never forget having a fascinating, if somewhat boozy, converation about stress in political life versus business with an attractive man when he said "of course when you are gay like me". OUCH... The only thing worse than the truth in that situation is if he made it up to get rid of me).

I agree on the mid/upper keys. I don't fish but I've learned to appreciate idyllic and my nightlife days and pretty much gone (although I find I can pull it off in KW better than New York). But I figure I can always live farther up the highway, go down to KW for dinner and fun and if I've had to much of the latter, get a room at the Pier House. (The cops down there are, properly, very strict on DUI).

But first I better get a f'ing job...Otherwise I'll be headed to KW because sleeping on the streets is easier when its warm.

inon: yes 20% down and 4.87% interest rate.
heading down to Sobe tomorrow morning for new years. happy to leave this cold behind!~