Overpriced Rentals (Miami, Kendall, Coral Gables: sales, real estate market, renters)

[VolkFam]

Insight, anyone?

We are moving to Miami area this summer. We currently live in DC and pay $2200/month on a house with a value of $450,000. And we're not even in an idea area in DC. We rent, obviously. This rent seem on par with value of home and likely the mortgage for owner.

BUT

I've been looking at the South Miami rental market, and can't believe what I see: homes worth $200,000 going for $2000+ per month. Since the price of a house is almost always reflective of the quality of neighborhood/schools/community amenities/etc, owners are expecting potential renters to pay an inflated rent on a home with housing values in the $200K range? The mortgage on these houses have got to be under $1500/month, so my question is: Are people really paying these inflated rental rates, or are, as I've been reading in print media, owners just delusional about the value of their homes (or, alternatively, just praying people will just pay and not asses value?)?

Thanks for any help.

[VolkFam]

Looking in East Kendall/Sunset/Coral Terrace/etc. Basically within 10-15 mins of Doctor's Hospital. I certainly understand that even for $2000, we'll find nothing in Coral Gables proper, Pinecrest, etc. But at least those housing values are $500,000+ so it makes sense!!

[VolkFam]

Sorry if this is a repeat post. My last one doesn't appear to have published.

Long story short: We live in DC, and are moving to Miami this summer. My husband will be working in Coral Gables, and we need to live within 15 minutes of UM area. Our current rent is $2200 on a house recently assessed at $450,000. If you do the math, it's about right. And certainly priced appropriately for DC rental market.

I'm looking at Miami rentals in Coral Terrace, East Kendall, North(?) Kendall, Sunset, etc. and I'm seeing similar rents, but on houses only worth $200,000. These houses are on mediocre streets, and the properties themselves are mediocre. What I'm wondering is, are people really paying rents that are this inflated? I'm not delusional, I get that we won't find a property in Coral Gables, Pinecrest, etc. for $2,000, but I simply refuse to believe that any one with any knowledge of housing values/real estate market, would agree to pay $2K + on a property of so little assessed value.

Print media has all suggested there is some delusion when it comes to the SALES of homes. In other words, people are in denial that homes have gone down in value. Just not sure how much this applies to rentals...

Any thoughts would be most appreciated.

[valicky]

Some of those homeowners may have bought the house when it was going for $300K to $400K. You can look up property records and see when a house was purchased and for how much. It might help you to have that info beforehand so you know if you have any bargaining room. You also have to remember that there are property taxes and the homeowners insurance to cover. Even though I have a mortgage that's only $100K I need about $1400 to cover those expenses of mortgage, insurance and taxes. Are property taxes high in DC too? I bet homeowners insurance is a bargain compared to here though.

[hmontaq]

Supply and demand

[Coconut1]

Well, first I don't know anyone that has ever derived a rent figure based off assessed value. It's simply not logical since property taxes are calculated different throughout the country. For example, in some areas a $135K assessed house really sells for $400K. The property tax rate; however, is very high.

In other areas of the country, assessed values are high but tax rates are very low.

An assessed value does not equal an appraised value.

Second, what are you looking for? How many beds, how many baths? Single family? Condo? Need a yard? Kids? Pets? What area would you like to live in?

Third, average rent for residential real estate usually takes into account square footage, beds and baths. You could break it down to price per square foot, but normally that is reserved for commercial real estate since there are a lot more variables in residential real estate and PPSF doesn't always work out well.

If you tell people here what you're looking for you'll have a better chance at getting good information

[VolkFam]

Thanks for you message. In my neighborhood in DC, very few homes have sold for much less than "zillow" value. The range has been between $400K and $650k, so I'm largely basing my conjecture on my more immediate observations. DC is a very expensive city, but we have managed to find a 4 bedroom 2.5 bath home in a moderately affluent area with good schools, less than 10 miles from the White House. So, when I hop online to see what the same rent can get me in Miami, it's been dissapointing.

I don't know Miami at all. But I have good friends who are from Coral Gables and Pinecrest, who have given me some parameters. Obviously I won't be living in either of those areas. Mostly they have advised where NOT to live in order to ensure a) tolerable traffic, b) safety, c) a commJunity I'd be happy in. Sadly I'm not sure what I'm left with in my price range .

We have two kids, two dogs. Need a townhome or SFH in a safe, family-oriented community (not just safe in the complex itself, but the surrounding area) that has at least three bedrooms, enclosed outdoor space, and updated enough that I don't have to constantly call the landlord because the stove is too old. We have to be within 15-20 minutes of University of Miami. Location is more important than house. School district does not matter, as kids are under two, but at least in DC area, quality of community is very much reflected in caliber of school.

I've heard very very mixed things about Kendall. Perhaps to mixed to look too actively, but prices are clearly better there. Interested in Palmetto, East Kendall, Sunset/ Glenvar. Cutler is getting too far. Have been advised to look at some parts of Coral Terrace. Any other good options? Could go north as well, I suppose ?

Thanks for your time- and help.

[Coconut1]

Okay, now we're getting some place!

You're going to have a harder time since you have dogs.

Age wise things in Kendall will be newer than other areas. Kendall is not a bad place to live, but it does vary in terms of quality.

Check out some of these listings:

2541 Trapp Av Miami FL - Home for Rent - MLS #A1577109 - Realtor.com®

Good location there, you're in the 'good part' of Coconut Grove. Probably one of the best places you'll find outside of the "new 'burbs" (i.e.- Kendall)

6701 Sw 80th St South Miami FL - Home for Rent - MLS #A1593215 - Realtor.com®

Very nice area, but this place is one a busy intersection.

3685 Sw 1 Av Miami FL - Home for Rent - MLS #A1597364 - Realtor.com®

Good location/area, but it backs up to Metrorail.

2201 Brickell Av Unit: 25 Miami FL - Home for Rent - MLS #A1599787 - Realtor.com®

Condo building, but GREAT location, GREAT area, but you'll probably have a problem with the dogs.

Personally I would try and stay east of the Palmetto simply because I think the quality of life is better outside of Kendall, et al. If you can find something in any location close to any of the above listings, you'll probably be okay.

Your best bet would be to get an agent to help you, then double check the locations on here to make sure they're not trying to put you in the middle of the ghetto!!

[doggiebus]

Originally Posted by valicky

Some of those homeowners may have bought the house when it was going for $300K to $400K. You can look up property records and see when a house was purchased and for how much. It might help you to have that info beforehand so you know if you have any bargaining room.

Exactly, if the owner bought at the peak then... Also right now there is less supply for rental property a lot of people who weren't renting a few years ago are now renting. So less supply, higher pricing for rent. A few years ago rent prices weren't that bad, you could of gotten one of these houses for cheap as there was a lot on the market.

[VolkFam]

You are so kind to help me with this. Much appreciated. Will take a look.