Florida Condo...buy or rent?

[bearkeley]

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?

 

[pb4uski]

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.

 

[Scuba]

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.

 

[Blue Collar Guy]

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.

+1

 

[Koolau]

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.

 

[48Fire]

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.

 

[marko]

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.

 

[bclover]

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.

+2
What I plan to do

 

[Bamaman]

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.

 

[brucethebroker]

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!

 

[brucethebroker]

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.....

 

[gregory r.]

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....

 

[ponyboy]

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.

 

[pb4uski]

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.

 

[Moemg]

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.

 

[Koolau]

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

 

[bclover]

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.

 

[pb4uski]

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.

 

[Koolau]

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.

 

[Moemg]

... 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 .

 

[Scuba]

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

Yes, there is a reason inland property is cheaper than coastal property. Some find more value in the lower prices and other attributes of inland living, while others prefer to live on or very close to the beach. Coastal property tends to appreciate more and hold value better during downturns than inland property does. There are only so many homes on the coast.

 

[Dash man]

This view from our 8th floor condo is why we chose Florida for the winters. We live in a relatively quiet area since tourists are a mile or more down the beach and only locals residents from a handful of condos and a row of large billionaire homes use our local beach. Our condo is currently being remodeled, but should be done well before the winter season. We're getting all new electrical and mostly new plumbing including a new master bath, custom cabinets in the kitchen and baths, a washer/dryer added and the drywall replaced or a fresh skim coat. New custom cabinets with quartzite countertop and new appliances. We're raising the ceilings where we can move the HVAC ducting to open up the look and feel of the place. We loved the place last winter and look forward to this coming winter. We'll by flying down in July to check things out and to pick a kitchen backslash and some stacked stone for a water feature wall for the finishing touches.

 

[Texas Proud]

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.

Why would the HOA get involved in who lives in the condo Unless it is a 'senior citizen' condo I do not see how they can prevent it...

 

[FiveDriver]

Dash Man--
If you don't mind my asking.....where approx is that in FLA ?? is it Atlantic side or Gulf side ??

 

[imoldernu]

There is an inexpensive and largely overlooked alternative, and that is buying a less expensive home in the central part of the state.
OP mentioned boating, and the natural thought is "the coasts"... but there are 30,000 lakes in Florida, so fresh water is a possibility.
Website covering our lakes:

Harris Chain of Lakes.

Our florida home is in Lake Griffin Harbor, a 55+ gated community of manufactured homes that has a 53 slip marina on a lake that is 2 miles across and 8 miles long, with direct access via canals and a lock to 5 other large lakes... totalling 212 miles of shoreline... plus direct access to the Oklawaha river, which goes to Silver Springs... in Ocala. Most of the boats are runabouts or pontoon.

20% of the community can be under 55, so while it was established 35 years ago, the turnover has been steady, the average age is quite young and the activity level is very high, so not an "old folks home".

So here's my thinking about long term...
The relatively low price makes this type of gated community a great half year home during the cold season. Later on, during the "aging" slowdown, perhaps a move to a coastal hi-rise condo as a permanent home.

The nice thing about owning, versus renting, is the ability to set up housekeeping on a semi permanent basis, versus trying to move six months of personal gear from place to place, every year.

There are dozens of communities on the chain of lakes, similar to ours, so there is plenty of choice.... buy in at a reasonable price and sell when a permanent move to the "warm" makes sense. Sell at the buy price and the total year cost would be less than $10K/yr...including utilities, taxes, insurance etc. ... Plus, you may rent it out when you are not there. Our contract land rental price and cost to own (based on our 1990 Prospectus) is less than $6K. MFG home prices depending on age and size, from about $15K to $70K. Our older singlewide is approximately 1200 sf including add on room.

The 23 years we did the 6 and 6 to LGH were the happiest of our lives. (and we spent a lot of time at Daytona Beach...an hour and 10 minutes away.)

Mentioned here, as an alternative to the Florida coastline communities, where the prices are substantially higher for housing, services, and recreation. My guess is about 15% to 25% different.

Just one option...