Brickell: Good Investment? (Miami, Miami Beach, Kendall: real estate, 2013, apartment)

[LAtoMIA]

I currently rent in Miami Beach and commute to Miami Shores. My partner is moving from California in a few months and will be starting work in Kendall. We talked about purchasing a condo in Brickell because we are both in our late 20s and enjoy the urban lifestyle, so we feel Brickell would best suit our interests as well as accommodate both of our commutes.

Is this a good time to purchase a condo in Brickell (or anywhere in Miami for that matter)? I know that real estate prices are increasing, but I am not sure whether they are inflated at the moment or at a good time to buy. We are planning to stay in Miami for at least the next 4 years, so we feel like it would be wiser to buy than rent. However, we wouldn't want to be in a situation where we are unable to sell/rent or lose on value.

We are looking towards spending around 270-300K for a one bedroom, so I am also curious as to which buildings our budget would afford and which have the best reputation (and likely to maintain its value in the future)? Also, we looked at various surrounding areas including Downtown, Miami River, and Edgewater, but I heard mixed reviews about those neighborhoods, so any opinions on those is also greatly appreciated.

[ace587]

Originally Posted by LAtoMIA

I currently rent in Miami Beach and commute to Miami Shores. My partner is moving from California in a few months and will be starting work in Kendall. We talked about purchasing a condo in Brickell because we are both in our late 20s and enjoy the urban lifestyle, so we feel Brickell would best suit our interests as well as accommodate both of our commutes.

Is this a good time to purchase a condo in Brickell (or anywhere in Miami for that matter)? I know that real estate prices are increasing, but I am not sure whether they are inflated at the moment or at a good time to buy. We are planning to stay in Miami for at least the next 4 years, so we feel like it would be wiser to buy than rent. However, we wouldn't want to be in a situation where we are unable to sell/rent or lose on value.

We are looking towards spending around 270-300K for a one bedroom, so I am also curious as to which buildings our budget would afford and which have the best reputation (and likely to maintain its value in the future)? Also, we looked at various surrounding areas including Downtown, Miami River, and Edgewater, but I heard mixed reviews about those neighborhoods, so any opinions on those is also greatly appreciated.

i'm in the same boat as you (live in Miami Shores though) been looking at Brickell also to buy. I'm looking at mainly which one has a good association. around 300k can get you something around the Wind, Neo Vertika, Axis etc. I like Axis because of proximity to public transportation and everything. Neo Vertika and Latitude are near 8 st to I-95. The prices have been increasing people have been paying cash upfront

[FlyMIA]

Well people say the market won't crash this time because most of the units are being purchased with cash. So while a crash might not happen I don't know if now would be a great time to buy with prices at all time highs. But you never know really it might keep going up. If you are in a good financial situation then buy if you wish. It is hard to say it is a "good time to buy" because right now it is a sellers market. An area like Brickell and Downtown is very hard to predict. But as long as your financial situation is ok I would not be too worried. You will almost always be able to find a renter for the right price.

[HarryWho?]

I'd think it would be good to do soon. If it's not a financial strain, go for it.

[Coconut1]

The only person who can determine if it's a good time to buy is you. If you're comfortable with the price and building, and have a plan of what you will do in the future, by all means go for it. If you're just thinking of buying because you've heard on the news it's cheaper to buy now than rent, take a step back and do some investigating of your own first.

[bale002]

Originally Posted by Coconut1

The only person who can determine if it's a good time to buy is you. If you're comfortable with the price and building, and have a plan of what you will do in the future, by all means go for it. If you're just thinking of buying because you've heard on the news it's cheaper to buy now than rent, take a step back and do some investigating of your own first.

Generally speaking, this is good advice. Nay, it's great advice. FlyMIA too.

Let me just emphasize that, first, the purchase of a place to live is primarily a CONSUMPTION decision and not an investment decision. Repeat, the purchase of a primary residence is primarily a personal consumption expense, NOT an investment.

Secondarily, then, as an investment, my own view is that four years may be too short a time. On the other hand, in a long-term perspective, Miami's success as a major city will continue to depend on global trade and other economic relationships, primarily with Latin America, and Brickell is the heart and brains of Miami; if that economy continues to expand, then, as an investment, you certainly can't lose, though I am not sure about a four-year time horizon, it could be ideal, but it could be too short.

As you know, prices have spiked back up over the past 18-24 months, peaking around April 2013 I would say, and currently pausing due to upward pressure on long-term interest rates. However, as mentioned, cash purchases comprise a significant portion of the Miami high-end market. As a result, rising interest rates may slow the rate of price increases, but probably the single biggest factor is the pace of growth of the Miami economy as a major link in the global and especially hemispheric economy and the demand for condos and other housing in its strategic corridor.

Good Luck!

[hurricaneMan1992]

Brickell would be an option, however, the time to buy was 2-3 years ago.

Keep in mind because both of you will likely be driving to work daily, local traffic in Brickell has gotten horrendous over the past few years. Driving around Brickell and taking the train around Brickell are very different experiences! When the drawbridges go up, and also during rush hour and weekend evenings, you would feel pretty much stuck in your building, or wherever you can walk or take trains to.

The highway access is just not well designed for the increased capacity with all the new residents and their cars. Getting to/from the highway can be a royal PITA and will greatly lengthen and add stress to your commutes. Perhaps look in to Midtown or Coconut Grove due to your (presumed) daily need to easily get out and drive places. At any rate, you'd probably want to look west of Brickell Ave...unfortunately, that rules out many of the nicest buildings.

[sigurko]

Hello there,

After lots of "google reading" about the pros and cons of investing in Miami today, I would like to have some opinions about it, in particular from ppl who live in there.
My budget is a 250k-300k for a 1 bed condo. My purpose is "buy to let".
I need something that is easy to rent - something near transports, commerce, etc. and that will have at least a valuation similar to the inflation (which is not hard, I guess).
My target is to get a good rent and to sell this apartment in about 10 years with a appreciation of 30% (3% per year average).
Now, I see so many new buildings (and more to come) which makes me wonder if the rental market will have any depreciation in the next 5 years - is there any projections about this? Or it will become steady?

Which condos should I look? In Brickell, correct?

thanks!

[bale002]

Originally Posted by sigurko

Hello there,

After lots of "google reading" about the pros and cons of investing in Miami today, I would like to have some opinions about it, in particular from ppl who live in there.
My budget is a 250k-300k for a 1 bed condo. My purpose is "buy to let".
I need something that is easy to rent - something near transports, commerce, etc. and that will have at least a valuation similar to the inflation (which is not hard, I guess).
My target is to get a good rent and to sell this apartment in about 10 years with a appreciation of 30% (3% per year average).
Now, I see so many new buildings (and more to come) which makes me wonder if the rental market will have any depreciation in the next 5 years - is there any projections about this? Or it will become steady?

Which condos should I look? In Brickell, correct?

thanks!

For the best chance at long-term appreciation, better to buy along Miami's strategic metrorail corridor or the beaches and keys, Brickell being the main sub-market, correct.

Of course the buy prices are higher than anywhere else in the county, so the annual nominal rental yield, or cap rate, after all expenses including insurance (condo fees) and taxes, would probably be 2.5%-3%, perhaps even lower nowadays as prices have spiked again in the past six months or so. (This assumes a cash buy, no mortgage; if you have a mortgage, then your yield will probably be negative.)

Rental rates have also spiked, though perhaps not at the same pace. I don't know what effect new construction will have on rental rates, but my best guess is that the new supply will meet already existing demand, so the increases may halt for a while, then resume a gradual rise, smoothing out for volatility over a ten-year period.

At any rate, you may also consider that you may be making a rather large investment with a very high concentration of risk which offers probably average rates of return. So perhaps you might be better offer investing in a diversified portfolio of REITs, enjoying the same or possibly much higher annual yields and the same possibility of long-term capital appreciation at much less risk.

Unless you yourself plan on living in the condo one day.

Good Luck!

[elchevere]

Your mortgage payment should remain the same regardless of interest rates.....with interest rates super low, prices have risen. Once interest rates rise, prices will stabilize and then start coming down....with prices as high as they are now (and they may very well continue to rise for the next 12-18 months) you could get screwed if you buy now and are forced to sell in the next 2-3 years....I would say if you are buying for speculative purposes you could be playing with fire...if you intend to live in Brickell for the next 7-10 years (or more), then OK to buy now--even at these price levels.