CONDO INVESTMENT - BEACHFRONT
Dec 13th, 2016, 02:54 AM
#22
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Since you know Jersey property and have a good record there, you might consider continuing to invest there with a focus on capital appreciation rather than income.
For the next few years, spend time in places that interest you in Florida -- both winter and summer time.
When you find the town and the property you want in Florida, you can sell one of the properties in Jersey and buy or rent in FL, depending on where FL is in the cycle. Or you may just decide to go on renting.
It really is very different from the Northeast/Middle Atlantic, and this gives you the opportunity to capitalize on what you already know while having the time to learn the ropes in FL.
For the next few years, spend time in places that interest you in Florida -- both winter and summer time.
When you find the town and the property you want in Florida, you can sell one of the properties in Jersey and buy or rent in FL, depending on where FL is in the cycle. Or you may just decide to go on renting.
It really is very different from the Northeast/Middle Atlantic, and this gives you the opportunity to capitalize on what you already know while having the time to learn the ropes in FL.
Dec 17th, 2016, 06:09 AM
#24
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I recently purchased a condo near the beach in central - northern Palm Beach county, so maybe my experience would be helpful to you. We had been visiting the area for many years, and wanted more.
I saw listings that ranged from $200k to $10 million in beach oriented locations, so there is a wide variety of property available. If you want to be in a building on the beach, $250k is highly unlikely, but you may be able to find something for between $300 and $350k. That would be in an older building with smaller units.
Condo fees are pretty high, ranging from $500 to $1,000 per month, and the highest fees are for properties right on the beach. Then you have taxes, which dukey mentioned are about 2% annually, insurance is probably $1,000 to $1,500 per year, and then you have some minor expenses for utilities and the like. I also have to pay someone $30 a month to check the unit weekly to make sure the AC is working and there are no leaks. The one thing that is cheaper versus the northeast is that closing costs for buyers are next to nothing (at least in Palm Beach County), unless you are getting a mortgage.
We thought the costs through lots of different ways, and I would agree that as an investment it doesn't make a whole lot of sense. The rent you could receive for a portion of the year is very unlikely to cover your costs, and you'd be giving up the use of it during the best time of year. So the reality is you'd be better off financially being the renter - you could get use of a condo for a good portion of the year, and save yourself money by renting rather than buying.
The reason that we bought is that we really like the area that we purchased in, and we want to have a place of our own to go to to escape the winter, and then visit whenever else we want. Our kids will probably make some use of it too. We don't intend to rent it out, so it's going to cost us a fair amount of money, but for us it's not an investment. We think it will be worth it to have our own second home to go to in an area that we really like. Later on, if we decide to sell, maybe we'll get lucky and make some money, but maybe not.
I saw listings that ranged from $200k to $10 million in beach oriented locations, so there is a wide variety of property available. If you want to be in a building on the beach, $250k is highly unlikely, but you may be able to find something for between $300 and $350k. That would be in an older building with smaller units.
Condo fees are pretty high, ranging from $500 to $1,000 per month, and the highest fees are for properties right on the beach. Then you have taxes, which dukey mentioned are about 2% annually, insurance is probably $1,000 to $1,500 per year, and then you have some minor expenses for utilities and the like. I also have to pay someone $30 a month to check the unit weekly to make sure the AC is working and there are no leaks. The one thing that is cheaper versus the northeast is that closing costs for buyers are next to nothing (at least in Palm Beach County), unless you are getting a mortgage.
We thought the costs through lots of different ways, and I would agree that as an investment it doesn't make a whole lot of sense. The rent you could receive for a portion of the year is very unlikely to cover your costs, and you'd be giving up the use of it during the best time of year. So the reality is you'd be better off financially being the renter - you could get use of a condo for a good portion of the year, and save yourself money by renting rather than buying.
The reason that we bought is that we really like the area that we purchased in, and we want to have a place of our own to go to to escape the winter, and then visit whenever else we want. Our kids will probably make some use of it too. We don't intend to rent it out, so it's going to cost us a fair amount of money, but for us it's not an investment. We think it will be worth it to have our own second home to go to in an area that we really like. Later on, if we decide to sell, maybe we'll get lucky and make some money, but maybe not.
Dec 17th, 2016, 02:30 PM
#27
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10 years ago I would have said that I wouldn't buy a place - I would have rather rented and kept my options open from year to year. One year maybe Florida and another maybe Southern California, Mexico or the Caribbean. Or maybe focus more on vacation like trips to places we like to go or never have been before. But my wife and I are 60 now, and the wanderlust is still there, but not as stong as before. Plus we have grandkids that we really don't want to be away from for long periods of time. Add to that the fact that Florida is just so damn easy to get to from Maryland, and at this point in our lives having a place like this made sense.
One way I figured it was that the annual cost was about the same as two or three trips abroad. So maybe now instead of having two or three expensive vacations every year (one of which was always to Florida in the winter), we'll just have one every other year.
But so many of the comments above are so right - you can't fool yourself into thinking it's going to be a money-maker!
One way I figured it was that the annual cost was about the same as two or three trips abroad. So maybe now instead of having two or three expensive vacations every year (one of which was always to Florida in the winter), we'll just have one every other year.
But so many of the comments above are so right - you can't fool yourself into thinking it's going to be a money-maker!
Dec 18th, 2016, 05:25 AM
#30
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But back to the topic. For 21 years, I have owned a townhouse in "downtown" Naples, Florida which is prime real estate for the area -- a few blocks from the beach and walking to its "famous" Fifth Avenue South and Third Street South areas. When I 'moved' to NJ to be with my new husband I chose not to sell it, but after much deliberation decided to rent it seasonally -- with all my personal furniture and possessions intact. I was lucky to get a tenant for three months the first season for a very good price. They loved the place and returned for four more years for 4 months each year.
But now I am selling it and we are building a one level villa in Naples as we are returning there full time this next year. My hope was to sell it to those tenants I had for 5 years. They were anxious to do so, but no matter how hard they tried they just couldn't make the numbers work. The costs of maintaining it plus the purchase cost just plain made no sense to them, as they have no intention of ever really spending more than the four months a year there -- and of course they would want it in prime season so renting it out off season doesn't make much sense either. It would cost them a LOT more to buy and maintain it than to simply rent it four months a year and walk away -- something like three or four times as much including the purchase investment.
For me it was great -- as I went into the rental situation with no mortgage, so the four months rent paid ALL my expenses for the entire year with a nice little profit left over. But if buying it and having a mortgage payment, there certainly would not be enough to make the expenses.
But now I am selling it and we are building a one level villa in Naples as we are returning there full time this next year. My hope was to sell it to those tenants I had for 5 years. They were anxious to do so, but no matter how hard they tried they just couldn't make the numbers work. The costs of maintaining it plus the purchase cost just plain made no sense to them, as they have no intention of ever really spending more than the four months a year there -- and of course they would want it in prime season so renting it out off season doesn't make much sense either. It would cost them a LOT more to buy and maintain it than to simply rent it four months a year and walk away -- something like three or four times as much including the purchase investment.
For me it was great -- as I went into the rental situation with no mortgage, so the four months rent paid ALL my expenses for the entire year with a nice little profit left over. But if buying it and having a mortgage payment, there certainly would not be enough to make the expenses.
Dec 21st, 2016, 12:56 PM
#33
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Re the homestead exemption which moderates the tax increases on your property: you should read the rules very carefully. That property must be your legal residence. Check out Florida's rules for that (voting place, car registration, all that). Just living in that condo for a few weeks each year, which seems to be your plan right now, would probably not permit you to get the homestead exemption.
Dec 22nd, 2016, 05:19 AM
#34
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Yes, very true. And there are very strict rules about renting it at all. I think you can only rent every other year -- not every year for a limited amount of time. And it can never be rented on Dec.31/Jan1.
