The Top 5 Miami Condos That are Most Likely to go Bust!
The Worst Condos in Miami!
Now we have your attention!!
This article provides you with the signs to look for in condos that will not perform well over time. To discuss the actual condos that are most likely to default please give me a call at +1.305.508.0899. For legal reasons we won’t mention names in this blog, so just read along and look for the signs!
1.Tenants vs Owners Ratio
A Miami condo that has more tenants than owners is an alarming sign. Condos owned pre-dominantly by investors can lead to trouble as investors tend to sell right away once the market sees the smallest correction. We have seen this in the greater downtown area of Miami, where investors bought up most of the pre-construction condos and are now all looking to sell. The massive influx into the market is creating an abundance of supply, leading to decreasing prices. Besides this, owner occupied buildings tend to be better maintained as owners have more invested interest in the building.
2. Generic / Standard Condo in the area
Try to avoid generic condo products. With many equal condos in the same area that offer no luxury (albeit they are advertised as such) it will be hard to stand out in the crowd when you are selling the unit. The only aspect to compete on will be price, something you do not wish for as a seller. Luxury needs to be seen in the finishes, the ceiling heights, the balcony depths, the views and the use of space. A state-of-the-art pool is not a definition of a luxury condo and will not make you stand out in the crowd. Go for the unique condos that stand out in the crowd and experience less competition in case you want to sell.
Many of the condos to avoid are located in Brickell
3. Lots of units for sale
This is a warning sign which often goes hand in hand with point 1. In case there are many units for sale in a building it is because investors are not seeing enough rental income or appreciation or owners are not happy living there. If these listings are not absorbed quickly by the market this is an indication that there is less demand than supply for this condo. Not a good sign!
4. Overpriced Condos who see rapid decreases
Some might argue this is a no-brainer, but as a realtor I constantly get calls of desperate sellers who bought their units for a price far above market value. Look at the value of the condo not at the value of surrounding condos. Something that can be seen a lot in Miami Beach is that owners of generic condo units piggyback on the price levels of the luxury towers in the area. The presence of luxury properties will indeed increase the value of yours, but not to an extend that it changes the entire price range.
Before buying a Miami condo check the financial stability of the condo’s administration and whether no special assessments are coming up that will double your HOA fees.
5 Branded Condo Towers
Nothing wrong with a good branded theme as long as the brand name is not the only justification for a certain asking price. In Miami we have seen branded towers that are extremely well finished and have qualities other than just the brand name, while there are also condos that seem to be lifting uniquely on the brand name. Call me for more details at +1.305.508.0899