Falling prices lead to lower rents.
Even after years of falling real estate prices in Miami it’s still cheaper to rent than to buy according to this article in the Wall Street Journal, sent in by bcbuds. As prices are falling so are rents.
It’s a dilemma for owners, do you try to wait out a recovery and pour money into the condo you’ve got rented out at a loss, or do you stop the bleeding and sell in a down market? Many are choosing to wait out the market and hoping for a recovery soon.
…But that has created a new, predictable situation. “Rents are falling,” says Miami broker Leslie Cooper. “You and your brother and everyone else is trying to rent your new condo out. So no wonder. But the rents won’t even cover your costs.”
I looked a number of fabulous condos in new developments on Brickell Avenue in downtown Miami. Their prices had been slashed drastically from peak levels. Some are now in forced sales.
You can get a two-bedroom condo in some places for $400,000 or less. And that’s considered a great deal.
Of course the problem is that even these reduced prices aren’t justified by the rental income. The article goes on to examine the numbers- even if you aren’t renting the money and have the $400k cash interest free to buy one of these condos it’s still a losing proposition in a post-boom era of property depreciation.
May 28th, 2008 at 9:10 am
If you are looking to rent on the North Shore the best source for ads (in my experience) is the vannet classifieds (the classifieds for the North Shore News), they are online too. That is where the landlords advertise……at market prices (not the flyers you see people taking on Craigslist to see if they can find someone new to Van area who does not know the market and how much to pay….).