I'm a young professional who is relocating to Miami. I don't currently own any real estate but eager to begin investing. I want to live in Miami Beach, and I'm looking at studio condos. I'd like to be the owner/occupier while I save for a downpayment on another property (1yr goal), then rent it.
It looks like you could pick one up for 80-90k and they rent (from craiglist research only) for about $1,100 a month. I know I'll have other expenses... HOA, insurance, taxes, maintenance, but it seems fairly reasonable that I could get one of these to cashflow $100/month. As a back up plan for vacancy, I would plan to use the unit as a vacation rental on airbnb.
Anyone have experience investing in studios or the Miami Beach area? Any thoughts?
In my opinion $100 is kind of low for cashflow. Its really risky, especially if your saving for another property. I say shop around for something a little more cheaper. That maybe you can live and build on so that you can make more cash flow. Now if you turn it into a vacation property, then the rent you can boost to about 3k a month, depending on area and what you invested into the property. Vacation homes always go for more, because its temp for the guests. Hope this gave you a little idea, Im not a pro either but I just like to put my input out and see what you feel. Reply just so I know what your thinking.
I've seen a lot of variations in miami beach studios. they're all different so you just have to do your research on each one. Some of the cheaper studios are like 300 sq ft. depending on your preference, that may be too small or just right. I was looking at one a while back and the building had a special assessment on it that had to be paid by the buyer at closing. Condo association fees generally start at $400/month And then adding flood insurance, wind insurance and such it can pretty expensive. and make sure you check with the association about renting. some buildings don't allow renting for the first year or at all. Also check into the parking situation. some condos charge an extra $100+ to rent a parking space monthly. Everything can really start to add up, but as long as you're aware of all the costs and rules I think it can be a pretty good investment once you find the right property.
Best of luck
Kevon - Thanks for the opinion! I appreciate it.
Kanise- I had thought $300/month for an HOA would be sufficient. Thank you for bringing this up. And the additional cost of weather related insurance is also one to think about! I think the solution is get to South Florida and begin analyzing real deals rather than hypothetical ones. But I really appreciate a locals opinion.
I don't know where you are finding 80-90K condos but they are hard to come by and they go very quickly when they come up. As Kanise mentioned they can be very small too.
The HOA dues are huge. I've seen anywhere from $200-$800 a month. The ROI is really low unless you are doing a vacation rental in which case it can be profitable. However all the HOAs forbid less than a 365 day lease. So be very careful with the apartment access as you will need to be prepared to sneak your guests in.
I'm a broker in Miami Beach, and based on my experience, you'll find decent studios on the Beach in the $125k-175k range, with a maintenance fee of $150-300 per month. The Beach has essentially run out of development space, so prices are moving upward. The greater Miami area has much more room to run, but South Beach in particular is built-out.
In my opinion, you can't go wrong buying on the Beach, as demand is strong for a variety of factors (seasonal US demand, year-round European demand, and structural economical influences in South America).
Let me know if you'd like to talk through it; in the meantime, good luck.
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