State of the Rental Market in Miami/Miami Beach

Over the last 2-3 months my sales volume has increase considerably mainly because people are starting to see that prices in Miami/Miami Beach have come down so much that it is again a smart option to buy real estate as an investment and either rent it out all the time or use it a few times a year and rent it out when not in use.

When my clients ask me how hard is it going to be to rent their units? I am happy to answer: not hard at all! Most of the units that I have listed for my clients have rented within the first month and many of those within the first 2 weeks. The only disclaimer here is that the property has to be listed at a reasonable price. If the price is unreasonable it will sit on the market. Amazingly enough I listed a property for rent this year at an unreasonable rate (as per my clients wishes, not mine J) and to my surprise we had many people wanting to see the property. We did not have any takers until we reduced the price to actual market value. But the story should give you an idea of how great the current rental market is.

Why is the rental market so hot?

Over the last few years when real estate was booming, many rental communities were condo-converted and sold individually. This led to a huge chunk of the rental market inventory to be eaten up in a short period of time.

Currently many people want to buy a home but are not qualifying for loans (as I imagine you’ve heard a million times in the last week loans has become more difficult to qualify for) therefore they are postponing their purchase for a couple of years (creating pent up demand that will help real estate values bounce back).

The short term rental market in Miami has officially entered season. Our season last from November to the end of April; when we are enjoying amazing weather and the rest of the world is freezing (by no means do I intend to annoy anybody that is currently freezing while I sit out on South Beach writing this blog, hahaha). On a more serious note during this season tens of thousands of people come from Canada, NY and Europe to spend time in the Miami area, or to attend events such as Art Basel, the Auto show, the Food and Wine festival, etc. Many of these visitors stay for 2, 3 or 4 months and look for short term accommodations and pay a premium for it.

Short Term Renting VS Long Term Renting

Many of my clients want to know whether they are better off renting the property short (less than 6 months) or long term (more than 6 months). In most cases it is a difficult question to answer. But if a buyer wants to use the property himself once or twice he/she should not rent it long term. Long term rents are great for those who are buying the property purely as a financial decision.

If you have any questions about buying a property to rent or leasing a property you already own please contact Christian Kawas at 1 561 702 2969 or via email at ckawas@ellimanflorida.com . www.christiankawas.com

Mei,Miami Beach-Oceanfront Zen Luxury at a Discount!

Last week a colleague of mine dragged me to preview an oceanfront building called MEI, I was hesitant as my time was limited with appointments that day. But after a few attempts I was convinced to go take a quick look as he suggested I preview it for one of our clients.
As we drove up to the valet attendant in the building I was pleasantly amazed with the arquitecture and the look of the building. As we walked into the lobby my jaw dropped, this place was unbelievable! As a former disbeliever on the effects of zen on interior design, I was now a believer! The interior design was done by the designers of the Mandarin Oriental hotels. The lobby features a "Tea Lounge", a "Zen library" and other amazing features that make you get into a very relaxed and peaceful state of mind.

The building also features 5 star amenities amongst some a fully equipped gym, spa, an amazing pool area, and concierge service. Every unit in this building has amazing views. Most unit have ocean views, the few that have limited ocean views have great views of the city, downtown Miami, and La Gorce golf course.
But I wouldn't be writing about this building if I didn't think it was a great value for my clients. I believe this building is an amazing opportunity as the price per square foot is the lowest by far for new construction with these luxuries and views. There are buildings similar in design to Mei that are currently selling for 3 times the price per square foot in the Miami Beach. The reason that this is such a great deal is because this is a developer sell out. They are slashing their prices to get rid of the remaining inventory. Currently you can get a 2 bedroom unit in the building for $699K with ocean views, before I forget to mention these units come with custom Thermador appliances and amazing bathroom fixtures such as a Toto toilet,that opens the lid automatically as you approach it!

I encourage you to give me a call and I'll take you to see this building next time you are in Miami. I loved it so much that I ended up missing my lunch and was barely on time for my 2 PM appointment.

If you have any questions about ownership or investment opportunities at MEI please contact Christian at 1 561 702 2969 or via email at ckawas@ellimanflorida.com or visit http://www.christiankawas.com/

Foreclosure, Short Sales, developer fire sales and bargain hunting in Miami

First let me start by defining what a short sale, foreclosure, or buying from a motivated developer entails and how these might provide a good investment opportunity for you. The opinions that you see in the upcoming paragraphs are based on my experiences in the Miami/Miami Beach real estate market.

Short Sale

A short sale occurs when a seller owes more to the bank than a buyer is willing to pay in the current market. In this case the bank approves the sale of the real estate at a loss and the bank absorbs the loss and the seller is freed from the debt to the house. In these instances you the buyer will be dealing with the seller/owner directly (since the bank has not foreclosed on the property yet) and you will agree on a price as you would for any other sale. The only caveat is that after the seller and buyer have agreed on the price the contract is then submitted to the bank for approval. The approval is a VERY lengthy process. Different banks have different guidelines and will take a certain percentage of what is owed to them. Generally short sales are going to sell for or just under the appraised value.

Foreclosure

The real estate property in a bank foreclosure is now owned by the bank. The bank then markets the sale of the property through a real estate broker. Currently there are a great number of foreclosed opportunities in the market place, all kinds of units, basic, luxury, beachfront, etc. Generally banks will want to get the real estate out of their books ASAP since every month they own the real estate they have to pay for the expenses and taxes. Purchasing a foreclosure can be done in as quick as 15 days and you will certainly be getting something for under appraised value.

Developer Fire Sale

In Miami the cranes are no longer present in our skyline, which is a sign that developers are fleeing the market at least for the next 3 years. The developments that have been completed are finishing to sell their inventory. In many cases people put down 20% down payments on pre-construction units and they are no longer able to close on their unit, defaulting on their deposit. Buyers that are ready to close can absorb the defaulted deposits and still negotiate the price on the unit further. In most cases developers are selling at a better price per square foot that a foreclosed property. The biggest advantage is that you won't have to deal with cleaning the unit and having to get new appliances or having to paint the apartment, developer units are brand new!

Your comments are welcome! If you have any questions for me feel free to contact me via my cell phone at 1 561 702 2969 or via email @ ckawas@ellimanflorida.com. www.christiankawas.com

Christian Kawas
Realtor Associate
Douglas Elliman Florida