Investing In Condos For AirBnb Income Is A Risky Idea
Despite Miami Beach’s crackdown on AirBnb properties, we receive regular calls from hopeful investors who want to buy properties in order to lease them out on the short term rental website. It is important to understand the risks involved in breaking the rules with hopes of high returns.
Miami Beach Crackdown
Because AirBnb rentals do not contribute to the hotel taxes that largely fund Miami Beach and they take away from the bookings at hotels, they are strictly outlawed. The government is in the midst of a strict crackdown of the policy, levying $20,000 fines on investors who break the rules. That’s $20,000 PER OFFENSE. Unless you’re leasing a $25 million waterfront mansion for $8,000/night to Kylie Jenner, the risk is just not worth the reward.
Many condo associations prohibit rentals of less than 30 days, or even less than 6 months. Some older buildings require owners to wait 1 to 2 years before leasing their condos. It is important to be clear about the rental policies of buildings prior to investing, because your bottom line will be affected if the policies don’t line up with your investment goals.
But what happens if you ignore the condo association rules and continue to lease your property on AirBnb? According to our contact at the management office at Infinity at Brickell, where the minimum lease term is 6 months, fines of $100 per infraction are issued to the owners of the apartments that get caught. He said that it is also not uncommon for visitors to be given violations for failure to obey conduct and noise rules in addition to giving themselves up for being nightly renters by treating the front desk like a front desk at a hotel. Eventually, the fines add up to make the investment not profitable enough to continue.
Some other buildings are taking enforcement a step further. Mint at Riverfront requires each applicant to sign an acknowledgment of the rules pertaining to short term rentals. MarinaBlue has posted a sign at the front desk alerting visitors that short term rentals are prohibited and violators will be removed from the premises.
With condo buildings, the issue is about security rather than the hotel tax. Each resident in a condo building must undergo a background check to ensure the safety of all residents. If one condo owner (or tenant) sublets their unit to vacationers, this security measure is compromised.
Renting A Condo To Use As AirBnb Rental Investment
The investors we’ve seen are not only buyers who purchase with the intention to run a short term rental business. We have also seen entrepreneurial tenants inquiring about a strategy of leasing a furnished condo and then subletting it online. This is not only a violation of the City (if the property is in Miami Beach) and condo association policies, but it is a violation of the lease terms. Most Florida leases do not allow subletting, putting the tenant at risk of eviction and penalties.
Landlords who keep yearly tenants have already picked up on this strategy and have begun to screen potential tenants for risk of violation of the subletting section of the lease, but I anticipate more buildings will follow suit with Mint and MarinaBlue over the coming months even if the City of Miami fails to pass their ordinance outlawing short term rentals.
******Update: One Miami East and West have both jumped on the bandwagon with the following stern message to residents, sent today.
February 16, 2017
Dear One Miami Residents,
As the Associations have previously notified you, short term rentals are not permitted in One Miami for periods of less than thirty (30) days. Despite such prior notifications, we have received numerous complaints that certain owners and tenants are in fact renting their units for short term stays in direct violation of the Associations’ governing documents, whether through websites like Airbnb or on their own. The Associations’ have sent (and will continue to send) violation letters to such owners and tenants who are committing these short-term rental violations instructing them to cease and desist from such actions immediately. The next step will likely be for the Associations to file lawsuit(s) against such owner(s) or tenant(s) without further notice. The Associations also reserve the right to deny access to any such unauthorized parties who may be renting from owners on a short-term basis.
We again remind all Members that the Associations’ take such issue very seriously. Therefore, if you are engaging in such improper conduct, please cease and desist from the same immediately. Additionally, if you are aware of a short-term rental violation that is occurring in the building, please report the same to management. Thank you for your assistance.
Sincerely,
Board of Directors of:
One Miami East Condominium Association, Inc.
One Miami West Condominium Association, Inc.
One Miami Master Association, Inc.
Photo Tour: $34 Million Miami Beach Home With Rooftop Water Slide Finds A Buyer
It is fun for the whole family! Last week, we took a photo tour of one of my favorite old Miami Beach homes, and this week we get to go on a photo tour of one of my favorite new Miami Beach homes!
This newly built home at 4555 Pine Tree Drive has 16,000 square feet of living space and an additional 3,000 square feet of outdoor living space. Even indoors though, you are able to open the sliding glass walls to give an indoor/outdoor feel and maximize your enjoyment of Miami’s fabulous climate. In total, the home has 6 bedrooms and 7 bathrooms plus 2 powder rooms. Elements of the home include stunning views of the Atlantic Ocean from the master bedroom, a water slide concealed by an elegant glass staircase, a pool with open views and a boat dock that will be built to suit the buyers’ preferences.
We won’t have word until after the closing of who the buyer is or how much the property ultimately sells for, but you can rest assured we will be watching and waiting.
Latin Singer-Songwriter Ricardo Montaner Lists Miami Beach Home For $11M
Ricardo Montaner, the South American singer-songwriter who is famous for singing love songs. Over the course of his 30+ year career, he has sold over 22 million albums and I want to sing 22 million love songs to his Miami Beach waterfront estate, which hit the market this week for $11 million.
I showed this Miami Beach luxury home several years back, when it was being quietly offered as an off-market deal and there is just something special about the place. The property is located at 4950 Pinetree Drive in Miami Beach. It is a corner lot on a secluded part of the street that is extremely quiet despite being in the middle of Miami Beach. Because the house osits on a 46,000 square foot corner lot, the estate boasts a whopping 400 linear feet of water frontage!! That’s more than most condo developments!
The house owned by Ricardo Montaner was constructed in 1939 and could use a bit of modernization but is absolutely stunning. There is a gorgeous atrium that I could imagine having fabulous dinner parties in, or a romantic dinner for 2 in a setting so disgustingly romantic, it would be fit for The Bachelor TV show. The poolside cabana is large enough to be a single family home of its own, with a rooftop observation deck.
Overall, the house has nearly 8,000 square feet of living space under a/c with 8 bedrooms, 7 bathrooms and 1 half bath. Sadly, I did not see the Ricardo Montaner home on the list at the Miami Beach Historic Preservation Board. I’ll be praying that whoever is the ultimate buyer of the property doesn’t destroy this gem to make way for a gauche McMansion with drop ceilings in the gameroom.
3900 Alton Brings Convenience, Style & Tranquility To Mid-Beach
Nestled just between the 41st Street business district and the Biscayne Bay is a 10 acre development site that will soon be home to a boutique building, 3900 Alton. The project was designed by Richard Bofill and will have 78 units in 8 floors.
Each of the residences will have a chef-grade Poliform kitchen with Sub-Zero and Wolf appliances, 10 foot ceilings, floor to ceiling energy efficient windows, frameless glass showers and Savant Home Automation systems. The 3 garden residences will have lush private gardens designed by Naturalficial, other units will have spacious balconies with glass railings. All residences will come with one parking space, 24 hour valet for guests and access to the Tesla House car. Each owner will receive VIP access to the Beach Club at the Nobu Hotel and Eden Roc. Many residences will have private elevators, and this is one of the only projects in the area that also has Shabbat elevators for those who observe.
Onsite amenities include a 3rd floor landscaped pool terrace with lounge seating, sunset bay view deck, lounging cabanas and daybeds, a children’s pool, a poolside refreshment & cocktail bar, towel service as well as a summer kitchen and yoga area. Art installations for the lobby, pool deck and other common areas are by Loris Cecchini, Fernando Mastrangelo, Philip Taaffe and Christoph Keller. Indoors, residents will enjoy a private dining room, children’s playroom, secure wine vault and storage, a light-filled fitness center with sauna, steam and changing area, 24 hour business center and social lounge with gaming area, library and media room.
The VIP Beach Club membership will give residents access to cabanas, beach lounges, towel service and beach butlers as well as preferential access to golfing and tennis at the Miami Beach Golf Club. The building will have community paddle boards, kayaks and bicycles for the residents, with the house car available to take people to Sunset Harbour or the Eden Roc.
Aside from the features and amenities, I really like the location of this project. It is in the middle of an area that is largely residential with single family homes, so a luxury condo development is refreshing. The views are spectacular and the project is walking distance to both the Talmudic University, multiple synagogues as well as the St. Patrick’s church and school. Mt. Sinai Hospital is the biggest employer on Miami Beach and is a bike ride away, along with the 41st Street business district. The access to the Julia Tuttle is very easy for those who would like to visit the Design District, Midtown, Brickell or Downtown, among other attractions on the mainland.
The construction is slated to begin early this year, with completion in 2019. Prices start just under $800,000 for 1 bedroom plus den garden residences up to $2.3 million for a 2,100 square foot 4 bedroom residence. See below for the 10+ acre site plan, renderings video, sample views and sales brochure. What do you think?
Checking in on Construction of the Betsy Hotel’s Expansion, Including its Bridge Pool
The substantial expansion of the Betsy Hotel in South Beach, historically named the Betsy Ross, is well, well underway as the luxury boutique hotel grows into the adjacent art deco Carlton Hotel by an ally bridge, and a set of new buildings to the north of that which are being connected together at the roof level with a bridge pool. The expansion is being designed by Shulman + Associates, of Miami.
It’s not quite that crazy hotel in Singapore that holds up a gigantic boomerang in the sky, but looking at the pool enclosure from below shows you just how thrilling it could be when it’s done. Take a look at the rest of the expansion in these pictures.
Bigger Bass Museum Reopening in Time for its Annual Art Basel Blowout, December 1st.
The Bass Museum of Art has announced it will reopen this December 1st, with its interior improvements and four new galleries, when its opening will coincide with the first day of Art Basel Miami Beach which is also the day the Bass traditionally hosts its big Basel party.
The museum will have 50% more gallery space within the same building footprint in a much more efficient layout designed by the talented architects Arata Isozaki and David Gauld. Gone, somewhat sanguinely will be that dramatic, and space hogging grand ramp that ascended to the upstairs gallery.
It would be hard to imagine finding space in the old museum to put up separate substantial shows by three noteworthy artists simultaneously. ArtInfo reports, however, that the new Bass will open with solo exhibitions by Ugo Rondinone, Mika Rottenberg, and Pascale Marthine Tayou, taking advantage of all those new spaces to show more art.
New Zika Zone is Almost All of South Beach
Photo by Phillip Pessar.
Five new locally transmitted cases of Zika, two locals and three tourists, have appeared in South Beach within the box of 8th and 28th Streets, spanning the Atlantic Ocean to Biscayne Bay, reports the Miami Herald. This isn’t good. Governor Scott announced this as Miami’s second Zika Zone of active transmission. As the Herald says:
Aerial spraying cannot be conducted amid the high rises and ocean breezes of Miami Beach because the airplanes fly low, about 100 feet above the ground, Frieden said. But crowds of tourists on Miami Beach, and the abundance of people in bathing suits and exposed skin, means more people may be infected.
Although there is controversy over the spraying (as it kills mosquito predators too) this is not good. Check out the Herald’s map of the affected area here.
Forget Dispensers, Miami Beach Needs Seagulls That Poop Sunscreen
Forget those complementary sunscreen dispensers, Miami Beach needs these robotic seagulls that poop sunscreen from a hilariously bad add campaign called “Care from the air”. The campaign was entered into the Cannes-for-advertising (it’s in Cannes), the Titanium Grand Prix, by sunscreen company Nivea, and mocked by the jury committee before it lost. In Adweek, Sir John Hagerty, an advertising legend and Jury member, said: “”You should see it,” he said. “It’s the most stupid thing I think I’ve seen in my whole life. I actually thought the Monty Python team had gotten together and entered it into [Cannes], to see if we would vote for it.”
40 S Hibiscus Sells For $9.35M
Earlier this afternoon, the ultra-modern, waterfront home located at 40 South Hibiscus Drive in Miami Beach sold for $9.35M, or $1,169 per square foot. The 8,000 square foot mansion has 8 bedrooms, 8 baths, 2 half baths and resides on a 24,000 square foot lot with 120 feet of prime waterfront and a boat dock. The luxury home sold in 329 days at roughly a 33 percent discount from its initial asking price of $13,995,000. For more information and pictures regarding the luxury home located at 40 South Hibiscus Drive, refer to the piece I wrote about it in October 2010.
