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Miami 101: Short Term Condo Rental

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Miami is a top global, national and state vacation and entertainment destination for its year-round weather, beach, art, nightlife, events, cruises and more. Lonely Planet named Miami the number four city on Planet Earth to visit in 2019. Short term condo rental is furnished for $1,800 per month and up on par with unfurnished annual/12-month lease; options are limited and stays less than 30 days regulated for downtown Brickell, Biscayne and the Beach.

Reference below in seeking short term condo rental in Miami.

Market Factors

—“Season” is October through March; prices increase at minimum +20%; ‘snowbirds’ travel from Northeast U.S., Canada and Europe; December is most expensive month with full occupancy due to Art Basel, Christmas and Hanukah holidays, New Year’s Eve

—April has become busy due to Easter and Passover holidays

—Short-term adds +20% to price

—Furnished adds +20% to price

—Condo high-rise building associations and communities generally require minimum 3 months/90 days, there are a select few buildings available for minimum 30 days

—Single family homes and stay less than 30 days book direct via Airbnb or VRBO

Fees

—Most owners request paid in full at signing of contract for stay 3 months or less 

—Security deposit equal to 1 month may be required by owner at signing of contract held in escrow (refundable)

—Security deposit equal to 1 month or less may be required by association (refundable)

—Application, criminal background check, fob(s) etc. fees may be required by association (non-refundable)

—Fees for professional cleaning at move-out, criminal background check, cable/wifi, electricity etc. may be required by owner (non-refundable)

—Showings generally are not done for stays, and if so, only for stay minimum 3 months/90 days or more

—Broker may require additional fee paid by tenant(s)


 

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Miami 101: Four P's of Condo Rental

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Miami is among the most expensive cities for rental along with an involved process to live in a condo. It’s best to find a licensed, reputable real estate agent or broker you have rapport with to assist. They provide value in guiding you through the process, recommending areas, and are knowledgeable of building unit layouts/views/features, amenities and, importantly, general overview of condo association policies. Additionally, it’s best to secure an agent to represent your tenant interests as well as its advantageous because the owner pays both agent commissions. Be advised condo move-in is not fast, it happens within, and can take up to 1 month vs. apartments accommodate immediate move-in within 1 - 3 days. Begin working with a realtor 45 - 60 days out or sooner to understand your criteria, move timing, market factors such as season or occupancy levels, and budget.  


Pre-Offer

While you may search consumer websites like Zillow, Apartments.com and HautePads et al, it’s best to review and make final selections via the MLS feed that an agent forwards via email. System transfer of data into consumer websites still has margin of error and because some sites allow manual entries, there’s likelihood the option is no longer available or is not an actual listing. For example, one giveaway is no unit # or an alphabet letter; condo building units are generally assigned unit numbers — first 1 - 2 digits represent floor number and last 2 digits represent unit layout — sometimes paired with alphabet letter, most commonly PH = penthouse, TH = townhouse, L = loft, etc. Select top choices then share with agent to schedule showings. Its customary or required 24 hours notice for showings, particularly if tenant occupied. For rentals, you will only visit 2 - 5 condo units/buildings (same for an apartment search). Allow 45 minutes to 1 hour plus drive/walk/parking per unit/building. Roommates and couples should have both parties present for agreement. Separate showings for each party are not favorable and neither are re-shows. Dress comfortably for walking and standing and be prepared to take photos and videos, as viewings are scheduled once.

Note: Some condo building rules, landlord agent availability, and tenant occupancy prevent showings on weekends; generally, showings are best weekdays 10am - 4pm. Apartment buildings are available to see daily without notice, generally 9 am - 5 pm.


Process

There are two parts: (Part 1) Unit/Owner and (Part 2) Building/Association. An owner has to accept offer and execute lease then you get approval from association (executed lease and addendum assigning unit to tenant signed by owner required in application to association).


Part 1 Unit/Owner

i) up to a week  to execute offer/contract to lease that is prepared by realtor, signed by prospective tenant(s), and can only be considered by owner if submitted with verifications; some owners may require tenant(s) pay for and complete a background check

ii) if accepted, deposit equal to 1 month due immediately and will be held in escrow (letter provided), usually as credit to first month rental payment

iii) up to a week  to execute lease i.e. receive both owner and tenant(s) signatures

Part 2 Building / Association

Questions regarding the building are best addressed directly to the condo association as opposed to agent(s) as rules and fees frequently change.

iv) up to 3 days to submit tenant application direct to condo association after offer acceptance and lease execution; delay could lead to liabilities for the tenant(s) such as later condo association approval and move-in date that the owner would be within right not to pro-rate days missed after lease start date; tenant(s) are responsible for turning over all pages in application requiring owner signature to agent so it may be forwarded to owner to sign in timely manner to not have submission delay; applications must be completed in full as incompletions will result in rejection or delay

v) up to 2 weeks for condo association approval (letter provided); payment in form as specified for application fee with submission; other additional fees, refundable or non-refundable, may be due with application or upon approval

vi) immediately forward condo association approval letter/email to agent for move-in day walk thru to be scheduled (allot 45 minutes to 1 hour) during which tenant(s)

  • inspect(s) unit to be in tact or document damages to not be held liable for; take photos and videos

  • receive(s) unit keys

  • turn(s) over balance payments (last month + security deposit) in form of cashier’s check(s) in amount(s) as specified

  • condo association may require an orientation which tenant(s) must schedule directly; building fob(s) are provided either by owner’s agent at walk thru or by condo association at orientation


Note: Above timeline is a gauge. Factors and circumstances can delay or advance process. 


Payments

List price is potentially negotiable $50 - $100 off, up to 5%; agent should provide recommendations on offer price or pre-negotiate with owner agent, however, the final decision is always per owner. Typically, lower priced or best floor plan/views units either receive an offer to go into contract quickly, have competing offers, or only accept offer at full list price.


Move-in dollars are generally (Part 1) 3 - 4 times the monthly rental price + (Part 2) up to $1,000 for additional fees (owner required background check, condo association application and additional fees)


Part 1

Move-in Dollars:

$2,000 rental price x 3 (first month*, last month, security deposit) = $6,000

*Deposit equal to 1 month due immediately and will be held in escrow, usually as credit to first month rental payment; balance payments (last month + security deposit) in form of cashier’s check(s) only in amount(s) as specified are due day of move-in at walk thru when unit keys are received 

Included in rental price are condo building maintenance/HOA fee, water, waste/sewer; depending on building basic cable and internet/WiFi may also be included in rental price; electricity/FPL is always excluded and paid by tenant(s) directly

Apartments do not have any inclusions in rental price; utilities are each billed separately, monthly to and paid by tenant(s) directly

Part 2

Application fees charged by condo association are per applicant/married couple (with proof of license) and non-refundable; most require a refundable security deposit for common areas ranging from equal to 1 month of rental price, to half a month, to flat fee of $500; fees are subject to change

Additional Fees:

Up to $1,000 as applicable below, per building

$100 - $200 application (non-refundable)

$250 - $500 elevator/move-in/move-out (refundable, non-refundable)

$50 - $250 pet deposit/DNA test (refundable, non-refundable)

$75 and up fob(s) (non-refundable)

$150/month and up additional garage space

$50/month and up storage unit

Apartments do not have an association thus do not require an additional security deposit, but may charge an additional fee or deposit for lower credit score; they have same additional fees shown above within similar ranges, although application fee tends to be slightly higher yet there may be discounts for certain professions or companies

Note: The MLS listing usually reflects move-in dollars due for (Part 1) unit plus (Part 2) condo association application fee only; other applicable building fees are provided by the condo association



Protocols

Agent representing tenant(s) work with clients exclusively and at no fee to tenant(s); owner pays both agent commissions. As agents only receive compensation at transaction close walk thru (i.e. the day tenant(s) receive(s) keys), it is imperative to please commit to only your agent for this process since there is front-load of time to advise, research, prepare comps, schedule tour, show and negotiate on your behalf in addition to their knowledge and value-add referral connections.

Owner decides rental price and payment terms such as accepted form, returned check or late fees. Some listings reference a certain credit score for consideration.

Condo association sets application and other additional fees as well as requirements/processes for approval.

Condo association sets not only fees for elevator move-in/move-out fees but also schedules dates, many buildings are weekdays only 10 am - 4 pm while select others allow Saturday or there are service elevators.

Fees for background check if requested by owner and required with application to condo association are non-refundable as they are services.

Fob(s) are only given to tenant(s) on lease. Generally one per unit; owner may not provide additional for 2 or 3 bedroom units and if so tenant(s) responsibility to purchase via association.

Parking space(s) are assigned by unit and managed by condo association. Generally one space is deeded with unit for 1, 2 and 3 bedroom units.

Proof of rental insurance may be required before move-in by an owner and/or condo association.

Verifications

The documents below must accompany offer/contract to lease to the owner for consideration:

  • completed rental application

  • scan of driver’s license/government issued id (e.g. passport) for all adult parties to live in unit

  • last 3 months bank statements

  • credit report

  • pay stubs last 3 months or employment letter validates 30 times rental price e.g. $2,000/month x 30 = $60,000 salary/income

Visa documents can replace above for international tenant(s); international criminal background check conducted by condo association takes longer, at minimum 10 business days/2 full weeks.

 

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5 Things You Need to Know Buying a Condo in Miami

 Guest Realtor, Bernie, on Dec 17th #MortgageMonday hosted by Yousif Mohamed, Loan Officer at Movement Mortgage

In the condo buying process in Miami, a real estate professional is the starting point yet it is also important in the initial stage to consult a mortgage lender. Source of funds should be in place before viewing properties. If not buying cash, then financing is needed; knowing below adjusts expectations and smooths the process.

#1 Proof of Funds Necessary

A statement of either bank account balance that reflects funds to satisfy list price or pre-qualification from a lender is standard to schedule showings. Clarity of liquidity or approved loan amount affords a focused search by list price and even condo building. 

#2 Decide Cash vs Bank vs Direct Lender 

Cash is the most favorable negotiation for lower selling price. Main street institutions such as Bank of America, Chase, Wells Fargo et al. may not be able to finance loan due to a limited number of and more restricted, standard, nationwide products of which many condo buildings do not meet requirements. Direct lenders are able to be more flexible with credit and income profiles, customize based on circumstances, and underwrite loans for condo buildings that do not meet requirements for increased fees. It’s best to work with a local contact even if the bank or direct lender is national as they have knowledge of specifics for the city of Miami and condo buildings. 

#3 Down Payment Possibly Above 20%

Although there is an oversupply of condo inventory, owners generally demand conventional 20% offered. However, if condo building does not meet requirements or if a limited review process is elected, down payment will be higher. The market has been trending 25% - 35% for down payment. New development condos do not accept loan financing for initial deposit or first 50% of payment schedule.

#4 Association Approval Required

The condo building will go through full or limited review. It may not be approved most times due to not meeting specific requirements for ownership rules and HOA conditions.

#5 Federal Programs Limited Acceptance

VA financing is accepted by few condo owners and registered approved for few buildings. While FHA is a financing term more readily accepted, it is still limited. New development condo developers do not accept federal programs.

 

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4 Things You Should Know Buying in Miami

While not all-encompassing, this is a quick digest of initial considerations for purchasing in current market Miami. It is comprised from most common misperceptions by out of state and international buyers. 

#4 Reality Price Check

The popular budget target of $250,000 does not buy the modern interiors, amenities and zip code many have in mind. Typically at this price point or less, the property or unit is smaller in square feet, older, likely requires renovation as well as has fewer or no amenities and is in an upcoming neighborhood or not as desirable an area. Q4 2018, Miami Market Report

#3 Don’t Fear Fees

In many cases, HOA (homeowners association) fees are nearly same as separate maintenance costs when totaled. Condo associations can be ideal for absentee owners as there is typically onsite property management to handle repairs, grounds upkeep and more. Many single family home communities have association regulations and fees too. 

#2 Adjust ROI Expectations

For Miami investment property in a single unit for rental, the average cap rate is 4 - 5%. Factor property taxes, HOA/maintenance fees, insurance, utilities and rental fees (vacancy, broker’s fees, furnishing). Temper turnover and return expectations from Airbnb; on Miami Beach as of 2016, there is a fine of $20,000 for first-time violator of short-term rentals (less than six months and one day) in condo buildings and banned altogether for single-family homes. For transient rentals, owner’s must adhere to regulations: ensure it is legal for property location, submit appropriate business and resort tax receipts, and show proof condo association allows. Additionally for those seeking a coastal/waterfront purchase, flood insurance premiums will increase

#1 Select One Realtor

Unlike other cities where multiple real estate agents may be used for their different property accesses, only one agent is needed as a partner for all aspects of the process in Miami as the MLS (multiple listing service) access is reliably used by all licensees in this market. Find a licensed, reputable realtor or broker you have rapport with to represent your preferences, negotiate on your behalf, and follow through on your requests. They provide value in recommending areas, giving referrals, and understanding your financial objectives to assign the buy and timing appropriately for wealth building, investment income, or trophy purchase. Aside from being knowledgeable, also select someone well-networked with contacts for inside information on properties, priority for new development better pricing, access to exclusive previews, and a pulse of local market and external factors, for example high vs. low season and economic conditions.

 

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Miami 101: Three B's Geo Basics

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Miami neighborhoods with three dot icon represent @lipstickandpropertyalue specialty areas, Three B’s: The Beaches (South, Mid and North), Brickell and Biscayne Corridor (Downtown, Edgewater and Midtown). 

To briefly differentiate:

Beaches

Miami has some of the most coveted and accessible beaches, year-round outdoor activities, and renowned night life and experiential events to #livewhereyouvacationArt Basel Miami Beach in December is world-class as are other marquee events such as the South Beach Wine and Food Festival and performances at the New World Symphony. As the Beaches are an island, there’s not a lot left to develop and property is at a premium for either oceanfront or bayside. More affordable units are older, on lower floors, city facing, or lowrise buildings with no amenities or assigned parking, decal only. New development units are top dollar. 1 Hotel & Homes is an oceanfront 'haute' spot.

Brickell

The #brickellliving experience is space use of unit, throughout building, walkable to entertainment, plus no car conveniences. The neighborhood's condos offer more newness, living area, and amenities vs. the Beaches. Brickell Financial District real estate is popular for investment cash flow from the high rate of residential rentals not only long-term, annual lease locals, but also short-term vacation goers given close proximity to airport. Brickell’s biggest year yet was 2016 topped off by the opening of Brickell City Centre with prime residential condos Reach and Rise towers, Class A offices, and premium retail including Saks Fifth Avenue; it is now the heart of Brickell, Downtown Miami affording unparalleled live-work-play. 

Biscayne

New hallmarks of entertainment extend beyond the Beaches to #downtownmiami with the Adrienne Arsht Center in the Arts & Entertainment District, Pérez Art Museum Miami in Museum Park along Biscayne Bay, Brightline express train to Orlando, many galleries in Wynwood Arts District, the curated shopping mecca and cultural scene of the Design District, and the Miami Open for tennis in Key Biscayne. Biscayne Corridor offers a slight suburban feel as its less dense compared to just south Brickell and less recreational and tourist inhabited than the Beaches. PARAMOUNT Miami Worldcenter when completed in 2018 will revolutionize the area.

 

For 2017 and beyond, there will be growth in the urban core with both buyers and renters recognizing the value on mainland in Brickell and Biscayne versus the Beaches. There is also a shift with growth in end users as relocators from cold climate cities is increasing as well as absentee/investor owners weekending in higher frequency.