tkmc

Hi All,

My wife and I have been dreaming about investing in a condo on the beach in Florida. We will spend a few weeks there during the year, and will rent it out when we are not there. We currently live in New Jersey.

Our budget is around $250K. Does anyone have any recommendation on some areas to target? We are looking for great beaches, active areas, where people frequently travel to. We have been thinking Fort Lauderdale, Panama City.

Any advice or experiences with the type of investment would be greatly appreciated.

Thanks everyone!!

NeoPatrick

Don't think of it as income and you'll be better off. You'll get the best price from someone who had the same idea a year or two ago and now wants to unload it.

Make sure you know the rules of the condo regarding rentals and what they allow.

tkmc

Thanks NeoPatrick. We are happy with someone else paying it off, even if we need to kick in a few bucks every month.

ekscrunchy

I asked a question about buying a Florida condo a few years ago; I eventually did buy in a SE Florida beach town, or better put, a town in southeast Florida that has a beach. My condo is not on the beach. I think your budget might be a bit low for a condo directly on the beach with a water view. But prices in my area seem to be flattening out so who knows. My taxes are low and maintenance is low as well.

Lots of people in my area rent for the winter (six months is the minimum rental allowed in many areas). But they then cannot use the condo at the time of year when they might want to escape the cold weather up north. I am not planning to rent but others here know a lot about condo rentals.


http://www.fodors.com/community/unit...ral-advice.cfm

NeoPatrick

??? Few bucks? Have you figured in your taxes, your utilities and expenses, the monthly maintenance fees, not to mention mortgage payments, rental fees and management fees - or are you paying cash to at least eliminate the mortgage fees?

schmerl

And don't forget insurance in addition to everything NeoPatrick has mentioned.

vincenzo32951

I wish I had a condo for sale in FL. It seems like every 5th poster here wants to buy one.

NewbE

If you want to cover your carrying costs you'd be better off renting it continuously via a long-term lease--a year long lease, in other words. Vacation rentals are a pain in the neck, and the cost of cleaning and repairing wear and tear, paying a management company to handle the rental, etc., eat into your profits.

I have neighbors who have a beach condo and handle the rental themselves via VRBO. They are happy because they plan to move into it eventually and consider the rental income gravy in the meantime.

So, if you plan to live in it one day, choose a town you like. Obvious, I know, but there it is. Browse VRBO to see what rentals go for and Zillow to see what units are selling for and do the math yourself. This kind of research is more valuable than anything a stranger could tell you.

Dukey1

Here's "the math" that you need to understand about real estate here in Fort Lauderdale (and everywhere else in Florida): as a very general rule you can expect to pay approximately 2% of the purchase price in yearly property taxes.

Do not let anyone tell you what THEY'RE taxes are, or were, for any real estate you are thinking of buying. Why? Because in Florida when a property goes through a sale it is going to be reassessed for tax purposes and what "they" paid is not necessarily going to be what you will pay.

Neo gives good advice as to the rules regarding sublets/rent outs. Some buildings do not allow ANY rent outs; some limit them to a certain number per year; some require that they be for a certain length of time such as six months or more. People in many condos do not want to live in any sort of "holiday building" for various reasons.

Be aware of the possible need for flood insurance as well as wind insurance. Get a copy of the building's wind mitigation report or prepare to pay for one for your individual unit.

Does the unit have impact glass or shutters? Does the glass meet or exceed Miami-Dade County standards (your wind insurance carrier will want to know that). If the unit has impact glass is it small or large-missle rated?

Get copies of the condo financials; meeting minutes may or may not be helpful since some associations do not record any owner problems or complaints in minutes. How much of a financial reserve is carried? Have there ever been any special assessments? Is the building self-managed or managed by an outside company?

Be aware of local utility rates, especially if your power is supplied by one of the MANY (other than Florida Power and Light) companies. Local sales taxes; these vary by county.

Good luck to you; LOTS to start thinking about.

Dukey1

Apologies for my inexcusable grammar and spelling: that should be their taxes not, "they're" Be aware that you may be eligible for a certain degree of homestead exemption which will lower your property tax rate.

Also be aware of any and all taxes that you may be required to charge any renters as well as any and all taxes you may have to pay on the contents of any property you rent to someone else.

Ackislander

You are late in the cycle to buy desirable water view property for $250,000, but one of the things you need to know is that FL real estate has definite boom or bust cycles. If you catch it on the down side and sell it on the up side, you can do very well.

The problem is that everyone wants to do what you want to do, and everyone who already owns there does not want you renting out your place.

So assume that you will have to rent for three months to the same tenant. No, you can't have a series of "cousins" staying in your place. Assume that you won't be able to rent for the summer (reverse seasons in the Panhandle). Can you afford it on three months rent?

In addition to the costs others wrote about above, you have to leave the A/C on or you come back to black mold everywhere. And who is going to check for you to make sure that the A/C is working?

To be fair, I have friends who have a very good vacation property that they rent for a year at a time, solving a lot of problems. The income allows them to use it themselves in the alternate years, covers much of their cost, and they have long term appreciation.

Dukey1

If you are in a condo building with on-site management there is NO problem with paying someone to check on it periodically so don't be put off by that one.

tkmc

Thanks everyone for the feedback and advice. I have 3 properties in NJ and it seems as if There are major differences in the Florida market. Lots to think about.

thursdaysd

Before buying coastal property as an investment you might want to read this:

http://www.nytimes.com/2016/11/24/sc...al-estate.html

sylvia3

That NYT photo is worth a million words.

NewbE

tkmc, if you;re already a rental property owner, I withdraw a lot of what I said But do look into insurance and tax differences, and do consider that this is true:
<The problem is that everyone wants to do what you want to do, and everyone who already owns there does not want you renting out your place.>

tkmc

Thanks newbe. In nj, so far, we have had a very good experience with rental properties. Any towns or cities you would recommend we look into, or we should stay away from?

Dukey1

"I have 3 properties in NJ..."

It really is NICE to know things like this UP FRONT.

NewbE

tkmc, don't let the sniping bother you, this board has residents who can't seem to check themselves.

I really can't recommend any specifics do's or don'ts, sorry! Florida has so much coastline, I can't say I'm familiar with more than a small fraction of it, even living in Tampa as I do. All I can say is good luck!

tkmc

nothing that people say on the net bothers me. Thanks Newbe.

I will keep you posted if i make any moves. i have to work through the math.