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I'm thinking of purchasing a rental property in Florida. Has anyone had any experience with this type of investment? What are the current cons?
 

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Not seriously looking but just for interest my wife and I were recently checking out a Florida real estate site. There are 2 bedroom, 2 bath condos selling for $25,000 or less. I would have to think this situation could present some fairly interesting scenarios for retirees. They could, for example, sell their large house and buy a town house in Canada and a condo in Florida and still put money in their pocket. They could save on heating costs, sales taxes, lower gas prices, and lower prices of many goods and services during the winter in Florida.

However, you do have to be very, very careful. For example, if the owner's are in such poor financial situation that they are defaulting on the maintenance fees, you could get burnt. Or the building could be filling up with low income tenants. Lots of landmines but probably some great opportunites as well.
 

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Another important consideration is where in Florida you buy. Much of South Florida is less than a meter above sea level, and sea level there is currently rising at a rate of 20-40 cm per hundred years--a rate that is likely to increase in the years ahead. Combine sea level rise with storm surge from tropical storms and hurricanes and you've got a recipe for a lot of properties disappearing or at least suffering serious damage over the coming decades.

See this story, for example, from National Public Radio:

http://www.npr.org/templates/story/story.php?storyId=120498442
 

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Make sure you do your research on property taxes. I believe that Florida charges much higher property taxes for non residents. Also keep in mind that if you're planning on using it as a vacation property, it may well sit empty much of the year. People only want to rent in south Florida at the same time you will want to take your vacation!

And finally, as Brad mentioned, the potential for natural disasters has to be considered. There are some places in Florida where you can't buy hurricane insurance. The insurance companies know that next hurricane is just around the corner.
 

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I don't know, but I suspect there is one. There are lots available in this price range. Here's one:

http://www.trulia.com/property/42751826-4764-Walden-Cir-37-Orlando-FL-32811
I've thought about not necessarily buying a condo but I thought about getting a timeshare at crazy low prices (I've seen them for $1000) so that I'd have a base for skiing or cycling (specifically I was looking at Colorado).

My concern for the condo in Fl would be that fees are based upon the upkeep of building divided by residents. More foreclosures means fewer people to pay the costs. I'd also think that those who are about to be foreclosed upon won't take great shape of the condo (common areas too) meaning excess cost.

But it's certainly tempting.
 

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There's a lot of really interesting demographic information provide on that referenced web site. You might want to ask:
What are the prospects of renting in an area with a 19.4% vacancy rate?
Why is there a 32% annnual turnover rate?
Why is the property crime index higher than average?

It sounds like this is a bedroom community providing housing for short-term employees at Disneyworld, MGM Studios, etc. Highly volatile employment market.
 

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2 bedroom condo for 25K?
What's the catch?
There is no such thing as a free lunch.
Ummm...the catch...does that include the chinese drywall that comes with a guarantee to make you sick? I think a bunch of that was installed in FLA.
 

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Ummm...the catch...does that include the chinese drywall that comes with a guarantee to make you sick? I think a bunch of that was installed in FLA.

I think that product has only been a problem for the last few years. The condo in the link I provided was built in 1988. But you do bring up the type of thing a buyer should watch out for.
 

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interesting comments. This forum saw similar points being raised when rickson was buying a condo in phoenix AZ.

i can't resist signing out without an irreverent quip.

don't y'all think there's something to be said for the romantic prospect of buying an ultra-cheap but doomed property ... one that will disappear under the waves in 25 years ... or be set on fire by angry fellow residents who get foreclosed on ... or just gently decay into that good night on a neep tide of rum ... all in all, if the roof would last most of one's life & one could amortize the truly pitiful cost over a number of years ... surely one might have a bargain ... or anyhow a novella like something out of papa hemingway & old havana ...
 

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Sorry I was a little negative there off the hop.

If you like Florida and like going there and have the extra money it might turn out to be the best investment you ever made.

It's kind of like investing when the market is crashing.... scary.

I know the reason prices were so low in Phoenix was because of a law that did not allow mortgages at buildings that did not have a certain percentage of owners paying their maintenance fees. One thing people do not realize about the States is that every single state has different laws regarding real estate. In a sense it's like 52 different countries. Even when visiting it looks very familiar, people speak English and it's very easy to make assumptions because it is so much like Canada but in fact it's not at all like Canada when it comes to real estate.

So I'm not really against buying something for less than it costs to make in fact I am very much in favour of that kind of investing but..... holy moly keep your eyes open and good luck.
 
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