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Looks like I will be moving into the Miami area for a few years. Due to my lifestyle and situation, was told Coconut Grove or Brickell seems to be good places to start.
Over the years I have owned and lived in nice apartments In NY City and homes in California so I know the general pros and cons of apartment and residential home living. Regarding S. Florida condo versus house living and their respective property maintenance costs, in general:
1/ In a higher quality NY city apartment in a relatively new building (say built in the 1990's or after), I never, ever heard the person who lived above me. Can you say that is true in a Miami area apartment of similar quality? For me, the worst possible thing about apartment living would be hearing your neighbors either above or alongside of you.
2/ I have read that the Florida Realty taxes are about 1% a year on the "assessed value" of the apartment or house. What would the typical monthly condo maintenance fees be for a (say) $495,000 condo? In the same vein, for a typical $495,000 house, what would a gardener cost per month and if there is an enclosed swimming pool involved, what would the pool guy and other pool associated costs be for a house? Any other costs I have not mentioned?
3/ Lastly, i heard that flood insurance can be expensive. Is apartment hurricane insurance much cheaper than the hurricane and flood insurance for a house? What is the approximate cost per year?
- The Grove and Brickell are nice, I live in Brickell.
1. In general, you will not hear the neighbors above or below you, but will hear them next to you, some condos are horrible at this, paper thin walls, can hear all the drama and social lives of your neighbors, even when the microwave beeps. It is bad in a sense there are a lot of party all night types, or have a revolving door of friends coming and going 24/7, and all the noise that comes with it. The pricier condos mitigate this, but we are talking much more than $500k which would be a cheaper condo.
2. Typical fees vary from the low end of $500/mth, to a couple of thousand a month. It is not so much the condo price, though that correlates well, but the amenities offered. Cannot say what the typical cost for a $500k condo would be because it depends on the building, but if it is a typical building and not a luxury one, I would say about $750 or so a month. You lived in condos also, so do not forget about the special assessments to get dinged with.
I have a rental and the gardener was $50/mth on average, but the current tenant takes care of it. No pool, but I cannot imagine pool maintenance being high, Miami is heavy in service sector employees, so it sort of drives the rates down in the areas.
3. Lol, I cannot recall the break down for my insurance on my condo, I sit on the water and face it. On my rental, it is in a high risk flood zone, AE if I recall, and it is $800/yr.
- The Grove and Brickell are nice, I live in Brickell.
1. In general, you will not hear the neighbors above or below you, but will hear them next to you, some condos are horrible at this, paper thin walls, can hear all the drama and social lives of your neighbors, even when the microwave beeps. It is bad in a sense there are a lot of party all night types, or have a revolving door of friends coming and going 24/7, and all the noise that comes with it. The pricier condos mitigate this, but we are talking much more than $500k which would be a cheaper condo.
2. Typical fees vary from the low end of $500/mth, to a couple of thousand a month. It is not so much the condo price, though that correlates well, but the amenities offered. Cannot say what the typical cost for a $500k condo would be because it depends on the building, but if it is a typical building and not a luxury one, I would say about $750 or so a month. You lived in condos also, so do not forget about the special assessments to get dinged with.
I have a rental and the gardener was $50/mth on average, but the current tenant takes care of it. No pool, but I cannot imagine pool maintenance being high, Miami is heavy in service sector employees, so it sort of drives the rates down in the areas.
3. Lol, I cannot recall the break down for my insurance on my condo, I sit on the water and face it. On my rental, it is in a high risk flood zone, AE if I recall, and it is $800/yr.
Regarding hearing your next door neighbor noise:
Wow, so if I bought an apartment, I would think that the least I would do is try to add an extra layer of sheet rock or soundproofing between my walls and my neighbor's walls if this is at all possible.
Regarding Maintenance:
Have not lived in a condo for many years, but if what you are quoting is the typical monthly maintenance, I am probably going house hunting LOL!
Regarding house maintenance:
$50 a month for a gardener sounds great and pool maintenance should not be too bad if I go with a pool. This sounds good and also sounds like it is much cheaper than a nice apartment for monthly "maintenance."
Regarding insurance: If $800 is high for flood/hurricane insurance, that is really not that bad.
I haven't done these calculations in a while, but the last time I did several years ago for my specific situation, carrying costs on a house came out to about 10% more expensive than on a condo.
Outside of mortgage if the case, the single biggest expense, annually for house or monthly within the condo fee, could very well be insurance, equaled or followed by taxes. Then followed by electricity, security and elevator maintenance in the case of a condo and others down the line.
But there are so many variables just for property insurance, it really depends on a case-by-case basis.
Also, as a rule of thumb, I calculate 2% of purchase price to roughly budget property taxes, but in the event it indeed comes closer to around 1.75% of assessed value. But even there, there are several variables that go into determining the final number each year, it also depends on a case-by-case basis.
Also keep in mind that maintenance of a house requires more than the pool guy, there is also the air-conditioner guy, the lawn guy, the pest control guy, the garage guy, the alarm guy, the plumber, the electrician, the roofer, the water bill, in many municipalities the garbage bill, plus other miscellaneous local government bills that arise from time to time. So not only the expense, but the time to manage all these relationships.
For most people these issues are not deal-breakers, but for some they are.
I haven't done these calculations in a while, but the last time I did several years ago for my specific situation, carrying costs on a house came out to about 10% more expensive than on a condo.
Outside of mortgage if the case, the single biggest expense, annually for house or monthly within the condo fee, could very well be insurance, equaled or followed by taxes. Then followed by electricity, security and elevator maintenance in the case of a condo and others down the line.
But there are so many variables just for property insurance, it really depends on a case-by-case basis.
Also, as a rule of thumb, I calculate 2% of purchase price to roughly budget property taxes, but in the event it indeed comes closer to around 1.75% of assessed value. But even there, there are several variables that go into determining the final number each year, it also depends on a case-by-case basis.
Also keep in mind that maintenance of a house requires more than the pool guy, there is also the air-conditioner guy, the lawn guy, the pest control guy, the garage guy, the alarm guy, the plumber, the electrician, the roofer, the water bill, in many municipalities the garbage bill, plus other miscellaneous local government bills that arise from time to time. So not only the expense, but the time to manage all these relationships.
For most people these issues are not deal-breakers, but for some they are.
Are you saying that the monthly condo fee which could range from $500 and up to over $1,000 INCLUDES property taxes? That can make a huge difference in my rough calculations.
Also, I thought Florida property taxes were closer to 1% not 1.75 or 2%.
I live in a condo in Dadeland and don't hear my neighbors unless someone slams the front door or someone closes a kitchen cabinet loudly and our kitchens ajoin. Some condos are probably built better than others.
Are you saying that the monthly condo fee which could range from $500 and up to over $1,000 INCLUDES property taxes? That can make a huge difference in my rough calculations.
Also, I thought Florida property taxes were closer to 1% not 1.75 or 2%.
No, property taxes are not included in condo fee. I am saying that in some cases property insurance and property taxes can come to the same amount, especially in the case of a single family home that does not meet all the latest wind mitigation requirements.
In a condo, the property insurance component of the monthly fee is for the entire building and surrounding land/landscaping, including the individual units up to the outside walls (and roof if on the top floor). There is a separate content insurance for inside the walls of the individual unit and personal property therein.
I don't know where you get 1% as a rule of thumb for Florida for estimating property taxes. It is possible that with homestead deduction, a low assessment value and other deductions, the effective rate could come to 1%, but I would feel more comfortable rough-budgeting 2% of purchase price, then be pleasantly surprised rather than suffering a possibly debilitating disappointment. If it is Texas, 3%.
But you may pick a number that you are most comfortable with.
I remember one inquirer who tried to pinpoint property taxes after a would-be purchase, but in the discussion it became apparent that the final exact number is the result of some rather complex neighborhood-by-neighborhood calculations that can vary annually. My feeling was that if the prospective purchaser has to pinpoint that number to make budget, chances are he really can't afford it, at least not comfortably, but he felt comfortable trying to pinpoint it.
So, again, input the rules of thumb and pinpoint calculations that you feel comfortable with.
Are you saying that the monthly condo fee which could range from $500 and up to over $1,000 INCLUDES property taxes? That can make a huge difference in my rough calculations.
Also, I thought Florida property taxes were closer to 1% not 1.75 or 2%.
2% +/-
Typically the condo maintenance fee will Not include your property taxes.
Also, as a rule of thumb, I calculate 2% of purchase price to roughly budget property taxes, but in the event it indeed comes closer to around 1.75% of assessed value. But even there, there are several variables that go into determining the final number each year, it also depends on a case-by-case basis.
This is Spot on for calculations. I tell my investors to assume 2% of the purchase price and my owner occupants to assume 1.6%-1.7% of the purchase price. Different 'towns' have higher taxes but only marginally. i.e. North Miami taxes are higher than Miami Beach taxes which are less than Coral Gables taxes. The Grove and Brickell are located in the city of Miami, so it should be less than areas like North Miami.
Regarding HOA fees - a good rule of thumb to calculate if its a 'good deal' is the following:
No Amenities (walk up type building in South Beach): 30 cents/sq ft
Limited Service (pool, locked door/intercom, no doorman or valet, tiny/no gym): 40 cents/sq ft
Full service (door man, pool, gym, club room, parking garage): 55-65 cents/sq ft
Luxury Building (intelligent package system, lobby smells amazing, 24/hr door man, spa/billiards/movie theatre) $1 ft+ (Icon, Murano Grande, Jade Brickell, Jade Beach, etc)
*Keep in mind that all units are priced per sq footage, so don't think "well unit 1201 is a better deal than 1502 because it has less HOA fee. It just means you're getting less space. Or if you see 1201 and 1101 listed with 2 diff HOA fees, its not because one is a better deal. It means the listing agent didn't do his/her job and verifying the HOA fee prior to listing it on the MLS)
So if you see properties where the HOA fee comes out to much more, than you know its not a well-run building. (unless they budget a ton of $ in 'reserves' which avoids the dreaded Special Assessment later in life when a problem happens - A building like Tequesta 1/2/3 in Brickell Key come to mind)
HOA Fees in the limited service buildings & full service often include your Cable & Internet and 99.9% of all condos include your water /sewer bill, so take that into account when calculating Condo vs House costs. HOA fees are not all sunk costs as some may think. Plus you don't have to pay for a gym membership (no cheap gyms in Miami unless you go to the 'burbs and find an L.A. fitness), and you don't have to pay for landscaping/pool maintenance.
Insurance - flood zone matters yes, but you should get flood insurance regardless because if the upstairs neighbor has a leak or the Fire Sprinklers go off and 'flood' your unit, you'll need that insurance to cover you. Flood Insurance is basically any 'water intrusion'. And you can't trust your upstairs neighbor to carry flood so you can sue them to replace your floors/walls!
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