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Florida Condo...buy or rent?
Old 06-08-2017, 04:51 PM   #1
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Florida Condo...buy or rent?

We currently have 9 rental units supporting our early retirement. We have a house in Virginia on 12 acres on the water in a rural area. We love our house but given our interests in traveling and desire to eventually move permanently to warmer climates, we plan to sell our house in a couple of years and downsize to a high rise condo in a boating community.

Problem is, we are so tempted with the 'easy' lifestyle it seems to offer (low maintenance) that we might go ahead and buy now. Is it crazy, or is this the time to buy?

We have visited different areas in Florida when we were working, but never really lived there, so not sure exactly what area. Based on initial searches online, we have ruled out the Keys (too expensive and risky). We might rent there for awhile but seems too busy. St Pete / Treasure Island seems like a good area with high enough rents (hound we decide to rent out until we sell our house) but open to other areas too.

For those who know about the market, what is it like now? Otherwise, what factors did you guys consider to make your decision when moving / downsizing? We have been good with buying real estate when it made financial sense (cash flow and solid rentals).....but now that we are retired, should we be focusing more on what we want versus what is a good investment?
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Old 06-08-2017, 05:18 PM   #2
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We rented two different seasons. February in Naples three years ago and for Jan-Feb in Sarasota two years ago. We could not find a seasonal rental in the area of that we wanted to be in near friends but an opportunity to buy came along. I found that, ignoring the initial cash outlay, our annual carrying costs were about 2 months rent during the high season... so buying made sense for us. We spent almost 6 months there in 2016-2017 winter.

I realize that I have to also consider the opportunity cost of our investment but so far prices seem to be appreciating well so that helps.

If I take our annual carrying costs + 4% of what we invested divided by the 6 months that we spent there it averages out to $2,400/month and seasonal rents are $3,300/month and higher for Jan-Mar.
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Old 06-08-2017, 06:35 PM   #3
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I think it would be wise to rent first. It's very different living in an oceanfront condo vs a rural property. Plus there are so many different options of where in FL. If I were you, I'd rent in furnished places in a few different areas for at least a couple of months each. That will help you decide if you want to make it more permanent.
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Old 06-08-2017, 07:03 PM   #4
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I think it would be wise to rent first. It's very different living in an oceanfront condo vs a rural property. Plus there are so many different options of where in FL. If I were you, I'd rent in furnished places in a few different areas for at least a couple of months each. That will help you decide if you want to make it more permanent.
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Old 06-08-2017, 07:13 PM   #5
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Unless you've found "the place" to buy, I'd gently suggest renting and wandering around looking for "the place" to buy. Just my $.02 so YMMV.
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Old 06-08-2017, 07:15 PM   #6
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Yeah, I would agree you should rent first. Prices in Florida are pretty high now. I overheard a bartender saying how he is going to start flipping houses. Sounds like a red flag to me. Plus, there is a lot of diversity in Florida, so renting would let you explore what you really want.
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Old 06-08-2017, 07:20 PM   #7
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If you're looking for a seasonal rental (Jan-April) they can be very tough to find, at least in the Fort Lauderdale area. Once renters find a place they tend to renew immediately upon their departure. Rents can also be high ($3-4K a month) and many condos require a 3 month minimum.

Regardless, I'd try using a local realtor to help you find and narrow down a few options.
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Old 06-08-2017, 07:55 PM   #8
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I think it would be wise to rent first. It's very different living in an oceanfront condo vs a rural property. Plus there are so many different options of where in FL. If I were you, I'd rent in furnished places in a few different areas for at least a couple of months each. That will help you decide if you want to make it more permanent.
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Old 06-09-2017, 03:29 AM   #9
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A lot of people don't realize that Florida's such a long state. Those living in the panhandle experience 4 seasons, and to be assured of warm winters you need to look from Tampa/Orlando south.

My preferred area for quality of living would be from Sarasota south--and especially the Ft. Myers/Naples area. If I was on a budget and looking for a house, Ft. Pierce might fit the bill.

Those Florida high rise condos don't draw me. My aunt inherited a 24th floor beachfront penthouse in Ft. Lauderdale, and the HOA board wouldn't allow my cousin to move in because she was a single young lady. HOA's can be such stinkers.
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Old 06-09-2017, 05:05 AM   #10
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We have owned a couple, but more modest than you are looking for. Prices in SouthWest FL are up, but not to 2007 heights, yet, from what locals tell me.

If you decide to buy:
Be sure to check on the HOA rules with renting. Our Assn. requires background checks and credit checks on RENTERS-(some do not like the invasion of privacy, so go elsewhere). Some HOA's do not allow seasonal renters, only 12 mo. min. Also check on pet policy for renters-ours only allows pets for owners.
Also, check with a local seasonal rental management firm. Ask what units in your building rent for-helps you run the numbers!

We love SWFL in the winter-good luck!
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Old 06-09-2017, 05:06 AM   #11
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BTW: FL charges a bed tax (11-12%?) on seasonal rentals. Check the exact # with mgmt. co. Take that into your numbers. AND, they aggressively enforce it.....
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St Pete / Treasure Island
Old 06-09-2017, 06:35 AM   #12
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St Pete / Treasure Island

We had visited the St Pete /Treasure Island area several times since my Sister I-L moved there 5 years ago. We love the area and waterfront life style. (we are currently in MD) Three years ago we purchased in north St Pete Beach, bought a 3 bdrm condo on the intercostal that was in good shape and partially renovated. We're both 57 w/plans to FIRE in two yrs. We ended up renting to snowbirds from DE for the last two years to pay for some upgrades we wanted to make. (not a fan of renting myself, gotta pick your arguments though) Point is, you can still find some good deals there. We paid $173k 3 years ago, one other 3 brdrm just sold for $215k a few weeks ago.

It pays to visit a few times though and get a feel as to what part you like best. We didn't want a place next to the t-shirt shops per se, and found a nice 1/2 mile stretch of Gulf blvd that was residential........but I can ride my bike to the beach and tiki bars in 3 minutes....
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Old 06-09-2017, 06:50 AM   #13
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Just wait a couple years...or make sure you buy a couple miles inland. Places like miami/ft lauderdale, st Augustine...they're going to be underwater within the next decade. Kind of a bummer cause I like the st augustine area.
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Old 06-09-2017, 07:40 AM   #14
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For those on a budget, places are much less expensive if you go to the east side of I-75 on the west coast... we have some friends who bought a condo just a little ways east of I-75 and I recall it was dirt cheap. I would suspect the inverse might be true for the east coast but I don't know for sure.
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Old 06-09-2017, 07:50 AM   #15
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For those on a budget, places are much less expensive if you go to the east side of I-75 on the west coast... we have some friends who bought a condo just a little ways east of I-75 and I recall it was dirt cheap. I would suspect the inverse might be true for the east coast but I don't know for sure.
The only problem with that is they are very far from the water and the traffic on the roads from east to west is brutal.
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Old 06-09-2017, 08:07 AM   #16
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For those on a budget, places are much less expensive if you go to the east side of I-75 on the west coast... we have some friends who bought a condo just a little ways east of I-75 and I recall it was dirt cheap. I would suspect the inverse might be true for the east coast but I don't know for sure.
Funny how your expectations change over time. When we first considered FIRE in the Islands, we joked about living under a blue tarp on the beach (don't laugh, the working poor still do that especially on the Ewa coast.) Then we found a nice town house a few miles inland that was about 30 minutes from a decent beach with no Pacific view. Eventually, we (well, she) got tired of the rain band we were in and we moved leeward - just at the right time. During the great recession, our place dropped 10% in value while the place we bought dropped almost 20%, maybe 25% - just about the worst drop we ever saw in the Islands. Long story short, we now have a stunning Pacific view and are plenty close to beaches - without actually living on one, mind you.

If I'm making a point it is probably that those of us attracted to beautiful coastal areas only settle for "inland" digs as long as we have to. Eventually we find a way to get closer to our dream, even if it's a bit over priced (in some folks view, anyway.) YMMV
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Old 06-09-2017, 09:20 AM   #17
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I'm reading an interesting book called, "florida move guide": the unofficial moving to Florida warning, decision and help guides. by Ron Stack. evidently Mr. Stack is a Florida realtor who notice and then did a study on why most "transplants" to Florida end up moving out.

I too have/had visions of retiring to Florida and I still may. I know I want to get out of the cold, snowy Northeast but I'm certain I'll rent for a while.

University of Florida supposedly did a study in titled "an Analysis of annual migration flows in florida 1980-2008" according to the books back jacket, this study showed a high percentage of people who made a permanent move to Florida ended up moving back out. lol.
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Old 06-09-2017, 09:46 AM   #18
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I think living in Florida year-round would be difficult for me... too hot and humid for May to October... I would melt like a candle. However, my aunt and uncle snowbirded and now live their year-round.... most of the Florida residents that I know come north for the summer.
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Old 06-09-2017, 12:33 PM   #19
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I think living in Florida year-round would be difficult for me... too hot and humid for May to October... I would melt like a candle. However, my aunt and uncle snowbirded and now live their year-round.... most of the Florida residents that I know come north for the summer.
Other than warm winters, I never found much appealing about Florida. I don't think I could stay in an area just because it wasn't cold in the winter. I'm sure there are plenty who would disagree with my overall assessment of Florida. So YMMV.
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Old 06-09-2017, 12:37 PM   #20
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... most of the Florida residents that I know come north for the summer.

and we are so glad they do . We finally get our restaurants, roads and beaches back . Seriously Florida in the summer is no hotter than a lot of other areas . It is just that the heat lasts longer .
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