South Florida Condo Owners: Renting Out to Vacationers
Sandra Stella spent most of the decade trying to profit from the South Florida housing market boom.
But in January, the Florida mortgage broker from Lauderdale-by-the-Sea quit looking for tenants and buyers for her 10 investment properties and began marketing them to business travelers and vacationers, instead.
Stella says it feels like boom times again.
”A house I couldn’t give away for $550,000, I’m now renting it for $5,000 a week,” said Stella, who runs sandybythesea.com. “I had to figure out what was going to work.”
A glutted real estate market is spilling into the lodging sector, as recent condo buyers who had counted on flipping for a profit instead face mortgage payments and maintenance fees.
“‘They can’t sell them and they need an income coming,” said Linda Luft, a mortgage broker at Bluewater Realty, whose short-term rental business grew between 20 percent and 30 percent this year. ‘Basically, what they’re doing is telling me: `Please rent it. Get me anything.’ ”
Miamihabitat.com, which advertises weeklong stays at Icon, Bentley Bay and other new South Beach condominium towers, said that its inventory is up 40 percent this year. At rentalo.com, listings for South Florida vacation rentals soared 400 percent last year.
A RENTAL BOOM
Housing sales are already down 29 percent from a year ago. And some real estate experts predict harsher times ahead for sellers, with more than 22,000 condominium units under construction in the Miami housing market alone.
That’s bound to push even more vacation rentals onto the market - and offer their owners some harsh lessons in the ups and downs of the lodging market. Stella has had to mop up beer on her waterfront rental home’s bamboo floors and clean up after spring-break tenants jimmied opened a hatch on her boat for a dockside party.
Janet Markowitz, an event planner in Atlantic City, N.J., owns two vacation units in Miami Beach’s Roney Palace with a business partner and pays Bluewater Realty a 10 percent commission to rent them. The condos post a loss each year. But Markowitz said the rental revenue has been enough to make them good real estate investments, given rising property values there.
”I figure if it pays for condo fees and taxes, I’m thrilled,” she said.
AVAILABLE DEALS
South Florida boasts a sprawling portfolio of residential getaways, offering vacationers larger and even sometimes cheaper alternatives to the standard hotel room.
The popular vrbo.com (the letters stand for ”Vacation Rentals by Owner”) recently advertised 107 South Beach locations for rent. There were 82 more listed under Miami Beach as Florida mortgage holders looked for help with payments.
In Fort Lauderdale, the site offered 154 places for rent - including a ”bungalow downtown” for $200 a night and a ”Fort Lauderdale Penthouse Suite” for $1,800 a week.
A unit at a new condominium building in downtown Miami is going for $900 a week in June on the site. Six blocks away at the Biscayne Bay Marriott, a week’s stay during June costs $1,243, according to the reservations desk.
SOURCE: The Miami Herald
