Are you wondering if its a good time to buy a vacation home in Miami? Does the apartment pay for itself ? Are home prices going any lower?
Well let me start by saying thank you for taking time from your busy day to read our newsletter ..
Secondly I will try to answer as simply as I can the questions posted .. and start by the easiest one
1. Price going down ?? If I knew I would be VERY RICH .. No one can say they know, and predicting prices in real estate is no different now then predicting stocks on Wall Street , and keep in mind that everyone has something different to say on the matter, and 3 years ago everyone was a real estate guru investors and we all know what happened then.
2. Time to buy ? In the past ( last 20 years) it was YES YES YES and very little else to think about . Now its a bit more complex .. The number one question I ask the clients when I am asked this question is ….. What is your expectation when it comes to an apartment in Miami .. Do you want to flip the property in one year and make a % or are you looking to hold on to this property for 10 years ? Do you want to rent it 100% of the time to tourist or do you plan to use it during the year ? Do you plan to be an active participant in the day to day operation or do you want a company to handle this operation?
– If you are looking to flip it in the next 2 years I would say .. its not a good business idea – closing cost run between 2.5% – 4% of the purchase price and if prices do not rise you will be losing money
– If you rent 100% of the time , you can expect that your apartment will pay for itself in the long run and you may get a return between 3% -6% of the day to day operation
– If you plan to use during the year its important to keep in mind when you will be at the unit and have realistic expectations. If you use your apartment from Dec 15th – Jan 5th then you will be sacrificing the peak season and so on
– If you plan to have a company handle the operation the average cost of this service is around 10% of the gross rentals and you should keep in mind that it does not include any repair cost that might arise
Our Recommendation :
YES its time to buy but with a great deal of caution … We provide all of our clients a free consultation and overview of the market and free recommendations, we do not represent of market any of our products in the call or stir your decision making , we simply want you not the make the same mistake thousands make when they purchase a vacation home and are left saying : if I only knew !!
article by:franco battistini