Are you ready to buy a new luxury condo in Miami? If you are then you better do your homework like your life depends on it. These high rise condos would be really neat to live in with all that Miami has to offer. However, here are some things that you may want to check into before you get caught up in all the hype.
Yes, I know there are thousands of new vacant condos in the downtown Miami area that have bay, ocean or city views with roof top pools and state of the art fitness facilities just waiting for you. But have you asked yourself why are all these condos sitting vacant?
Well I'm going to share with you some of the reasons these units are vacant and why you may be making a huge financial mistake if you decide to buy one of these units.
In 2004 thousands of new high rise condos in downtown Miami went under construction. Lots of investors signed pre-construction contracts on these units. They thought they would be able to flip them for huge profits. These units were scheduled to be finished in mid to late 2005 which just happened to be the time the real estate market came to a halt. Most of these investors that couldn't flip them or move into them walked away from their contracts and deposits.
This left hundreds or thousands of units vacant with builders scrambling to sell them. They offered incentives like, free maintenance for one year, appliance upgrades or no closing costs. After six to ten months of no sales this didn't work so they started reducing prices. I don't think they were making any profits but they just wanted to get out of the projects.
Per the multiple listing service as of June 23, 2008 there were 4,591 vacant units and 14,742 active listings in the Miami downtown area.
So isn't it time to buy these units?
I don't think so and here's some of the reasons why;
1. Values are still on the decline.
2. These condo projects may be hard to obtain financing in.
3. The monthly/yearly maintenance fees may be going up dramatically due to the number of vancant units.
4. There may be ongoing special assessments in the condo budgets.
5. The number of rentals in the project may be too high to obtain financing.
6. There may be a substantial number of foreclosures in the building which may prohibit financing.
Well I hope this information has helped you realize some of the obstacles you may face. As always "Buyer Beware".
To obtain property information in Miami Dade County go to www.miamidade.gov and click on property search link.
Yes, I know there are thousands of new vacant condos in the downtown Miami area that have bay, ocean or city views with roof top pools and state of the art fitness facilities just waiting for you. But have you asked yourself why are all these condos sitting vacant?
Well I'm going to share with you some of the reasons these units are vacant and why you may be making a huge financial mistake if you decide to buy one of these units.
In 2004 thousands of new high rise condos in downtown Miami went under construction. Lots of investors signed pre-construction contracts on these units. They thought they would be able to flip them for huge profits. These units were scheduled to be finished in mid to late 2005 which just happened to be the time the real estate market came to a halt. Most of these investors that couldn't flip them or move into them walked away from their contracts and deposits.
This left hundreds or thousands of units vacant with builders scrambling to sell them. They offered incentives like, free maintenance for one year, appliance upgrades or no closing costs. After six to ten months of no sales this didn't work so they started reducing prices. I don't think they were making any profits but they just wanted to get out of the projects.
Per the multiple listing service as of June 23, 2008 there were 4,591 vacant units and 14,742 active listings in the Miami downtown area.
So isn't it time to buy these units?
I don't think so and here's some of the reasons why;
1. Values are still on the decline.
2. These condo projects may be hard to obtain financing in.
3. The monthly/yearly maintenance fees may be going up dramatically due to the number of vancant units.
4. There may be ongoing special assessments in the condo budgets.
5. The number of rentals in the project may be too high to obtain financing.
6. There may be a substantial number of foreclosures in the building which may prohibit financing.
Well I hope this information has helped you realize some of the obstacles you may face. As always "Buyer Beware".
To obtain property information in Miami Dade County go to www.miamidade.gov and click on property search link.
About the Author:
About the author: Frank Kasper has retired after 21 years as an appraiser/real estate agent and now is an investor. To receive a free report and see what Frank uses to make money go to real estate, and
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