Miami Beach Condo Investments Producing Cash Flow? Don’t Yell at Me! It’s Miami Beach, baby, NOT Texas or North Carolina, where real estate investments might make you money in the short run.
In response to an inquiry on making it all make sense on a $500,000 budget, I’ve relayed the info on what to expect when financing 80% of the value.
Miami Beach Condo Investment Analysis
The Sale Price to List price average is 90%, with occasional deals at 10 to 20% off the list price, especially when cash & fast closing.
Financing 20% of $500,000, you’d have an estimated payment of $2,390 ($400k at 6% Interest, 30-year fixed). This can easily be manipulated based on the type of loan you choose, term, FICO, etc.
The rule of thumb is 2% of the purchase price
ie) $500,000 at $10,087 per year or $841 a month
Here’s the Dade County Tax calculation at the $450,000 purchase price.
- Countywide at $2,362 City $2,654 State $296 School Board $3,577 Children’s Trust $190 (without HomeStead Exemption located in Miami Beach with a millage rate of $20.1746 per thousand. Total $9,079
In calculating your monthly expenses, we see an estimated payment of $3,781. I estimated maintenance at $550 plus $841 (Taxes on $500,000) plus $2,390 (PI). Insurance, Water, Sewer, Garbage, and Grounds (sometimes cable & internet) are included in Maintenance Fees.
- Rental Value approximately ~$2,000
- Total monthly carrying cost: $3,781
- Negative $1,781 month
- you may adjust +$300 to 500 additional income depending on financing and rental value
- Numbers will be similar for a 1 bedroom also with an average rental value at $1,300
Miami Beach Investors
Today’s savvy Miami Beach Investors pay cash or at least 40 to 50% down. In this case, the numbers make sense when renting is required. Primary end users buy Miami Beach real estate because they love the location and see future appreciation potential (as do investors). My calculations also show us at the bottom of the market (Miami Beach oceanfront condos) as inventory slowly decreases while closed sales increase.
Be sure to see the new Blog posting coming this week and reflecting 1 Quarter Stats 2008. I continually add to this Miami Beach real estate blog
. If you’d like new updates once available, you can be notified by email
each time a new posting occurs or contact me here.