There has never been a better time to buy a
condominium in Miami but there are dangerous traps to avoid . The Florida
real estate market is in it's largest slump since the great depression with prices
falling by about 60%. Condos have been particularly hard hit with
some buildings dropping 3/4 in value.
This decline represents a great opportunity
but also a high risk . Those buildings that have fallen the most are
experiencing mass foreclosures . In turn, the monthly maintenance fees
necessary to operate these Condos are not being paid by delinquent owners .
In the best case scenario the other condo owners pay the difference and get the
money back with interest on a sale . Unfortunately, Florida
law does not provide condominium associations with the same "first claim"
protection that other jurisdictions to do. Existing Owners often end up paying
for all of those people who have lost their unit and the maintenance fees can
get to be prohibitive.
The second thing to be careful of is
hurricane insurance . If there was a massive category four or five
hurricane hitting Miami and Fort Lauderdale, the state running insurer, Citizens
Insurance, would be overwhelmed and unable to pay all of the claims.
The third worry is property taxes .
Without state income tax, Florida relies disproportionately upon property taxes
to pay its bills . Even though a condominium you buy may sell today for
50,000, it may be appraised for tax purposes at $150,000.00 and the yearly tax
bill could be close to $5,000.00. This is an extreme example and you can
appeal your taxes , nevertheless make sure that you investigate everything
Miami is a great place to live and at Miami
condo is a great winter retreat and a good investment. Just make sure you do
your homework first.