Top 5 Questions To Ask When Buying a Condominium

Buying a condominium is quite different than buying a house.  A different process is involved so make sure that you ask the right questions to avoid unexpected issues or expenses after closing.  Below you will find what I feel are the top five questions to ask when buying a condominium.

1.  Does the condominium development have any current or planned special assessments?

A special assessment is a one-time charge levied by the condominium association upon unit owners to pay for unanticipated expenses such as a major replacement, repair or improvement.  Special assessments are rare in newer buildings but typical in buildings that are 15 years old or older where a roof might need to be replaced, a pool might need to be resurfaced, a lobby completely redesigned, etc.   Although sellers are obligated to disclose any special assessments to buyers when entering into a contract, I recommend speaking with the property manager prior to making an offer so that you can take the information into account when coming up with a price to offer.  A special assessment is not a deal killer but I would have the seller pay for all, or at least the vast majority of the special assessment, at closing.  When shopping for a condo in a building that is 10 years old or older, I would also find out from the property manager if the association has a reserve account.  A reserve account, which acts as a savings account, holds funds set aside by the condominium association to pay for major replacements, repairs or improvements on the building.  Reserves funds are intended to prevent or offset the need for special assessments.  For those looking to buy a condo in a much older building, keep in mind that all condominium buildings in Miami-Dade County must be inspected and recertified every 40 years.  This will almost certainly result in a special assessment of some sort being levied if the condominium association has not kept on top of its repairs over the years.

2.  How much are the condominium association fees?

Condominium association fees, also known as maintenance fees, are used to pay to operate and manage the building.  Expenses that are often covered by these fees include: the cost to insure the exterior of the building, pay staff salaries, maintain and operate the amenities and pay not only the utilities which are needed to operate the building but also any utilities that are provided to individual units such as water, sewer and trash removal.  A portion of the condominium association fee may also be set aside to fund a reserve account.  Condominium association fees are normally paid on a monthly basis but I have seen cases where the condo association elects to have its members pay them on a quarterly basis instead.  In Miami, the fee charged to each unit owner is determined by calculating the proportional amount of the budgetary expenses attributed to each unit based upon square footage .  I have heard of buildings in other cities base the ownership percentage on other standards such as view or floor location of the unit but I have not come across any condominium buildings in Miami which use anything other than square footage as their basis.  The condominium association fees can change from time to time so I would check with the property manager to ensure that the figure you see in the MLS is up-to-date.  I would also find out if there are any plans to increase or decrease these fees anytime soon.

3.  Should I have an inspection done on the condominium?

9 out of 10 times a condominium inspection will not reveal any major concerns.  Nevertheless, I typically recommend that a buyer have an inspection done anyway.  The cost of a property inspection is very small in the grand scheme of things.  It is better to be safe than sorry.  You will want to ensure that the air conditioning unit and appliances are operating properly.  Keep in mind that a standard inspection does not include an inspection for mold.  I recommend making a visual inspection of the ceilings and air conditioning closet for water stains.  A water stain does not necessarily mean that mold is present but I would recommend that the buyer have a mold inspection done if that is the case.  It will cost extra but it could potentially save you thousands of dollars and a ton of headaches.

4.  Will I be able to obtain financing to purchase a condominium?

If you are looking to obtain financing to purchase a condo then this should be the first question you ask.  Aside from your creditworthiness as a buyer, the answer will depend on the building in which you seek to purchase a condo.  The development will need to meet certain guidelines in order to be considered Fannie Mae approved which would then make the building eligible for conventional financing.  Although we do work with banks that will finance a condo that is not eligible for conventional financing, the interest rate will normally be slightly higher than that of a conventional loan.  In either scenario, a bank will typically require at least a minimum 20 percent down payment.

5.  Does the condominium association have any restrictions?

The condominium association can, and often does, implement restrictions on owners.  The two most common are lease and pet restrictions.  A condominium association will typically limit the number of times per year that an owner is able to lease their unit.  The association will normally also set a minimum duration for each lease.  Such policies prevent the elevators from constantly being congested with people moving in and out of the building.  Investors, on the other hand, generally welcome less restrictive rental policies in order to maximize their potential revenue.  Most condo associations in Miami establish a minimum rental period of 3 or 6 months.

Another major restriction that a condominium association can impose is one on pet owners.  The majority of new condo developments have very lax pet policies at the outset.  However, once the building is handed over the to the condo association more stringent policies are typically put into place.  It is common at this stage for the condo board to vote to allow owners to have pets but not renters.  Although debatable, the rationale behind this is that owners are more respectful of the property than renters.  Investors, however, should keep in mind that rental candidates will be limited if such policies are implemented in a building where they own a condo.  You would be surprised by how many people own a pet these days.  The condominium association can also restrict the items kept on your balcony, the type of vehicle(s) you can park in the garage, the days of the week and hours for which you can move in and out of the building, the hours you can access the amenities and so on.

Miami Beach Mansion Bequeathed to Pet Chihuahua Sells For $8.4M

Gail Posner, daughter of billionaire business magnate Victor Posner, made national headlines in 2010 when it was discovered that her Miami Beach mansion was bequeathed to her pet Chihuahua Conchita and two of her other dogs along with a $3M trust fund.  According to her will, the dogs were to be taken care of by her staff which was to receive a grand total of $27M upon her death.  Conchita, who was considered to be the “world’s most pampered dog” by Gail’s own accord, had her own bedroom and bathroom in the waterfront mansion, a $15,000 Cartier necklace and weekly spa treatments.  Posner’s son Bret Carr was left only $1M. To no one’s surprise, Carr quickly contested the will. The hotly debated Miami Beach home sold last Friday for $8.4M.  The 7 bedroom, 8 bath, 2 half bath waterfront estate had 9,700 interior square feet and featured a center courtyard, elevator, 2 fireplaces, enormous master suite, separate gym and staff quarters resting on 156 square feet of waterfront.  According to public records, Gail Posner purchased the luxury home for $8.3M in September 2005.  No word on where Conchita and the other two poochies will now reside.

Record Breaking Sale at Continuum South Beach – $25M

According to The New York Times, a record breaking sale took place last Friday in Miami Beach.  PH1, a tri-level penthouse located in the South Tower of Continuum South Beach, sold for $25M.  The sale shattered the previous Miami-Dade County record for condos of $21.5M set in December 2011 by Penthouse-A at The Setai. The Continuum South Beach penthouse has 7,400 interior square feet with 5 bedrooms, 7.5 bathrooms, a private rooftop pool, an internal elevator and six terraces which total 6,000 square feet.

The penthouse was sold by Alex Birkenstock of the Birkenstock shoe company.  He purchased the property in 2009 for $9.9M according to public record.  The property, which was sold privately, had not recently been listed on the MLS.

PH2 at Continuum South Beach, a penthouse with 11,000 interior square feet, is currently on the market with an asking price of $35M, or $3,182 per square foot.  Not a bad deal considering PH1 just sold for $3,378 per square foot.  The previous record holder, PH-A at The Setai, sold for $3,463 per square foot five months ago.

Phone Numbers for Condominium Associations in Miami

I decided to compile a list of phone numbers for various condominium associations in Miami. These are useful to real estate agents, buyers, sellers and renters alike when looking to obtain building-specific information such as pet and rental policies as well as to request an application for condominium association approval. You can find the list under the “Resources” drop-down menu in the header. The list is by no means complete so please feel free to email me any that I am missing so that I can add them. [email protected]

Jade Beach Penthouse 4904

A few days ago, I decided to drive up to Sunny Isles Beach to check out Penthouse 4904 at Jade Beach.  It sounded exceptionally priced for a penthouse of that size so I had to see it for myself.  The tri-level unit has 5 bedrooms, 6.5 baths with 8,210 interior square feet along with a monstrous 5,790 square feet of terrace.  It comes equipped with an outdoor Jacuzzi and an in-unit elevator.  The floor-to-ceiling glass windows throughout the penthouse allow for breathtaking views of the Atlantic Ocean or the intracoastal waters from every room.

The asking price is $8.9M, or $1,084 per square foot, which is quite a bargain for a penthouse of this caliber.  In fact, it is the lowest price per square foot of any unit over 6,000 square feet in Sunny Isles Beach that is currently on the market.

Miami Condo Investments Turns 5 Today

By happenstance, it suddenly occurred to me yesterday that Miami Condo Investments would be turning five years old today.  Five years!  Quite remarkable when I stopped to think about it.  I had owned the domain since 2005 but it wasn’t until May 12, 2007 that I decided to roll up my sleeves and write my first blog post – I just had to see what this blogging thing was all about.  I had read all about the potential benefits of blogging and what it could mean for my real estate business but never in my wildest dreams did I imagine just how profoundly it would impact my career.  Had it not been for my commitment to blogging, there is no doubt in my mind that I would have fallen to the wayside like many of my fellow Realtors® at the height of the market.  Instead, blogging allowed me to advance in my career and see continued success with each passing year.  Blogging also provided me with a forum to reach a global audience – a forum which, over the past five years, has had roughly 2M visitors from 206 countries who have viewed over 10.3M pages!  I want to thank each and every one of you, especially those who have contributed to the forum with comments and feedback.  It has been greatly appreciated. 

Without a doubt, Miami Condo Investments will be around for another five.  I look forward to the coming years and will continue to provide you with relevant information about the Miami real estate market.

3,078 Square Foot, Industrial Loft Available For Rent at Parc Lofts

Industrial lofts are extremely rare to find in Miami.  Unlike major metropolitan cities in the North such as Chicago and New York City, Miami did not participate in the Industrial Revolution.  Miami, therefore, did not have, for the most part, the abandoned warehouses and other industrial buildings which could later be converted into large, open lofts for residential or live/work use. Miami has had to rely on developers to bring the industrial loft concept to our city and construct it from ground up.  Parc Lofts, located at 1749 NE Miami Ct in the Arts District of Miami, is one such developments.  With loft sizes that reach an amazing 5,436 square feet, Parc Lofts was built with SIZE in mind.  The development has only 72 total units, many of which are occupied by small businesses utilizing these lofts for live/work purposes.

With all that being said, unit 604 is currently available for rent at Parc Lofts.  The bi-level loft has 3,078 square feet of interior space, 20-foot ceilings, 2 full baths, washer/dryer, a balcony spanning the length of the unit and comes with 2 assigned parking spaces.  The asking price is only $3,950 per month.  I dare you to find a space of this size in Greater Downtown Miami for less than $1.28 per square foot, especially one that will accommodate live/work situations.  Parc Lofts also has a pool, hot tub and fitness center.

For those interested, please call me at 786-247-6332 or email me at [email protected].

Impeccably Decorated 3 Bedroom Condo For Sale at Marquis Residences

A few weeks ago, I had the pleasure of viewing one of the most impeccably decorated condos for sale at Marquis Residences.  The custom designed unit was absolutely stunning.  The 3 bedroom/3.5 bath condo has 2,393 interior square feet, 10-foot ceilings and comes fully furnished as you see in the pictures below.  A private elevator opens to the 22nd floor residence which includes 2 master suites, 17×43 porcelain tiled floors, a laundry room, 3D LCD TVs, custom bar, Euro kitchen, security system with cameras, linear diffusers and covered ceilings with fiber-optic lighting.  A Crestron system is also included to control the audio/video, lighting, air conditioning and window treatments.  To top it all off the Park West Miami condo offers spectacular, 180-degree views of Biscayne Bay.  Asking price of this remarkably beautiful property is $1,695,000.

Billy Joel’s Miami Beach Mansion on the Market for $14.75M

According to several sources, Billy Joel listed for sale his Miami Beach mansion this past Monday for $14.75M.  The 8,881 square foot home offers 7 bedrooms, 8.5 baths, a luxurious bar with wine cellar, gourmet chef kitchen, a formal living and dining room, outdoor summer kitchen and expansive views of Biscayne Bay with over 150 feet of waterfront.  The Mediterranean-style estate resides on La Gorce Island, an exclusive neighborhood that has seen its fair share of celebrity-residents such as Shakira and Lil Wayne.

Joel purchased the property in 2006 for $13.5M, according to public record.  Below are the photos of his former palatial pad.

iPhone App Update Now Available on iTunes

Great news!  The Miami Condo Investments iPhone app is now compatible with iOS 5.  You can download the latest update on iTunes.  We would love to receive any feedback that you might have so it would be great if you could leave us a review.

As a side note, I recently updated the scores on the Condo Rankings page and have added a few buildings such as Mint and Paramount Bay.  The majority of the changes were made to the risk adjustment column to reflect the decrease in developer inventory in many of the newer buildings since the last update.