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Old 03-10-2009, 04:19 PM
 
88 posts, read 297,523 times
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Does anyone here have a condo as a investment property in the Miami beach area? I was looking into buying a reasonable prices condo and renting it out. Any advise is appreciated
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Old 03-13-2009, 07:30 AM
 
88 posts, read 297,523 times
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anybody?
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Old 03-13-2009, 10:54 AM
 
Location: South Beach (MB, FL)
640 posts, read 1,818,966 times
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Nobody wants to sell at a huge loss. They're either hanging on, renting out their condo, or in foreclosure. Are you checking for foreclosures?

You'd better be diligent in figuring out the financial health of the condo association of any apartment you might be interested in. Some will probably go bankrupt.
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Old 03-13-2009, 11:05 AM
 
115 posts, read 326,386 times
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Quote:
Originally Posted by Cougar Beach View Post
Nobody wants to sell at a huge loss. They're either hanging on, renting out their condo, or in foreclosure. Are you checking for foreclosures?

You'd better be diligent in figuring out the financial health of the condo association of any apartment you might be interested in. Some will probably go bankrupt.
What would happen if the association went bankrupt? I would think there would be some legal recourse to retain ownership of your property but I have no idea.
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Old 03-14-2009, 01:47 PM
 
Location: western East Roman Empire
9,318 posts, read 14,229,350 times
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Quote:
Originally Posted by awd250 View Post
Does anyone here have a condo as a investment property in the Miami beach area? I was looking into buying a reasonable prices condo and renting it out. Any advise is appreciated
It's mathematical really. Figure rental income minus mortgage cost, if any, condo fees (which usually includes building insurance, but not interior insurance), taxes, interior insurance, regular interior maintenance, extraordinary maintenance, the cost of managing of all the foregoing, and the opportunity cost of a risk-free investment. Take the net revenue thus calculated divided by your principal investment for rate of return.

Chances are that, if you have a mortgage, the rate of return will be zero or negative, if no mortgage then maybe around 3%-4%.

Mathematically, then, it is worth it if you can buy at a really low price, you may be able to generate greater returns, but you have to make your calculations carefully.

Also, as mentioned, you have to somehow factor in the risk that the condo association runs into trouble, possibly meaning an unexpected sharp increase in condo fees. Also another hard-to-calculate risk is potential hurricane damage triggering extraordinary assessments for major repairs.

Such potential expenses may also complicate any expectation of long-term capital gains.

Miami's long-term economic vitality will continue to depend on trade and other business relations with the Caribbean and Latin America and its luck in avoiding a serious natural disaster. Most likely the chances for realizing capital gains or losses will be volatile, so you'd have to choose your moments carefully over a 10-20 year period or longer.

If your horizon is five years, even less than 10 years, I'd say it's probably not worth it, unless you pick up a good condo for a song, but I would think that Miami insiders would already have pounced on those kinds of deals, but who knows.

Good luck!
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Old 03-15-2009, 01:33 AM
 
Location: Miami Beach
108 posts, read 415,201 times
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Quote:
Originally Posted by Cougar Beach View Post
Nobody wants to sell at a huge loss. They're either hanging on, renting out their condo, or in foreclosure. Are you checking for foreclosures?

You'd better be diligent in figuring out the financial health of the condo association of any apartment you might be interested in. Some will probably go bankrupt.
+1

Look, there is LOTS of available real estate here, as we over built in the boom. Lots of unoccupied units and lots of units owned by folks living abroad (especially in SoAmerica). There has not been the drop in rates, however. Folks are holding onto their contracts and going into foreclosure rather than sell and take a hit. Its a little weird...I think denial is one of Miami's most obvious psycho-features.

That said, there ARE deals to be found, but you need to hit the pavement and meet folks and get to know buildings and developers. If you buy into a building that you do not occupy, you risk being hung up to dry. At least hang out and check out solvency of the building and its association. Miami is nice in the winter...come down and hang in the hoods you wanna invest in for a bit. An informed consumer is a happy consumer.

DR
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Old 03-15-2009, 02:20 AM
 
Location: South Beach (MB, FL)
640 posts, read 1,818,966 times
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Quote:
Originally Posted by Machino View Post
What would happen if the association went bankrupt? I would think there would be some legal recourse to retain ownership of your property but I have no idea.
You don't lose ownership of your property, but you have a big mess on your hands. Your apartment can be occupied as long as your building still meets code. If something important fails (like the electrical system, or a water pipe), and there's no money to fix it, then the building will lose its occupancy permit, and the building has to be cleared of residents (although you still own your apartment).

I don't know what motivated your interest in Miami condo investment property, but I suggest you spend some time learning the market, and learning the legal issues of condominium ownership, as well as the issues of financing an investment property. It's not trivial stuff.
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Old 03-15-2009, 12:10 PM
 
115 posts, read 326,386 times
Reputation: 40
Quote:
Originally Posted by Cougar Beach View Post
You don't lose ownership of your property, but you have a big mess on your hands. Your apartment can be occupied as long as your building still meets code. If something important fails (like the electrical system, or a water pipe), and there's no money to fix it, then the building will lose its occupancy permit, and the building has to be cleared of residents (although you still own your apartment).

I don't know what motivated your interest in Miami condo investment property, but I suggest you spend some time learning the market, and learning the legal issues of condominium ownership, as well as the issues of financing an investment property. It's not trivial stuff.
I'm not quite clear what this last part is about. No I do not know the legal issues relating to condominium law but I do know the market and I have a fine grip on financing thank you very much. Your response while informative, is coming off a little condescending, besides the fact, you fail to see that this website is a powerful resource and by being here we are learning about these issues you listed and much more.

Kudos to the owners of this website.
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Old 03-15-2009, 07:01 PM
 
Location: South Beach (MB, FL)
640 posts, read 1,818,966 times
Reputation: 137
Sorry, editing error; the second part was to the original poster.

Quote:
Originally Posted by Machino View Post
you fail to see that this website is a powerful resource and by being here we are learning about these issues you listed and much more.
The original poster is not going to learn much about the complexities of real estate investment from a board like this. He needs to learn quite a bit before putting down his money and getting tenants.
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Old 03-16-2009, 01:55 PM
 
88 posts, read 297,523 times
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I know I have a lot of researching to do. how is the rental market? I'm not looking to make a quick buck more like long term.. If not maimi, any other areas to look at? remeber I'm from NYC so i can't afford too much time in FL. I'd have to do as much research on line as possiable and then one day go down there and check everything out
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