Lifestyle

Tag: property taxes

  • Miami’s Lowest Property Tax Rates Reviewed for Income Properties

    Miami’s Lowest Property Tax Rates Reviewed for Income Properties

    Greetings Real Estate Investors,

    The Miami Herald recently published an article detailing the different property tax rates in Miami-Dade county for various municipalities.  Since it is tax season and that horrible three letter word is on all of our minds we decided to look a little more closely the list.  Specifically we are going to detail the 10 municipalities with the lowest 10 rates and give our opinion in terms of whether or not these areas offer other strengths or weaknesses for purchasing your next real estate investment.

    Here is the image from the Miami Herald’s article, they had more but we are looking at the lowest 10.

    Miami-real-estate
    We will start at the top of the list and work our way down…

    Sunny Isles Beach
    This is a no brainier and an no-go on investment, this luxury enclave of million dollar condos is where you want to live not where you want to invest, the high cost to purchase and the astronomical Condo fees mean that it doesn’t matter how low the property taxes are your bottom line will get massacred!

    Cutler Bay
    The little town that was formerly known as Cutler Ridge has come a long way since it was just a few homes on the way to Homestead.  There are several condo communities that were built within that last decade that provide a lot of bank for your buck.  We would definitely advise taking a look down the road at this community, the low tax rates combine with a low cost of entry to make this a very attractive place to invest.  There is one thing you have to be very aware of, there is a part of the community that is close enough to the giant Miami-Dade County trash mountain that there is a noticeable stench on some days.  This has kept property values low, so you can get a great deal but you also may have trouble finding good tenants who will stay for long.

    Miami Lakes
    You definitely would not want to invest in a single-family home here but there are several condo communities that are very good deals.  The community itself is very much tailored to working families so in general it tends to attract very good stable tenants.  The prices are definitely higher than Cutler Bay but you are getting what you pay for in terms of a very nice and community that also draws commuters because of its proximity to the Palmetto Expressway.

    Palmetto Bay
    Same as Cutler Bay but 10 minutes further north.

    Pinecrest
    Not much to say it’s too expensive to invest.

    Unincorporated County
    This is probably our number one pick on the list because it comprises so many options that are so much more central the work centers and Downtown than Cutler Bay, Palmetto Bay and Miami Lakes.  The only one that comes close is Doral, but as you will see when we discuss it next the cost of entry is much higher.  The unincorporated county comprises areas such as Shenandoah, Westchester, and basically everything West of US1 starting at 57th Avenue.  You can find some great Single-Family homes in these areas that have sturdy construction and access to some of the best spots in the rest of the city.

    Doral
    This is our number two pick, but if you prefer that your portfolio be filled with newer construction then this might be the first place that you want to look for your next investment property.  Most of the properties are townhomes and most were built within the last two decades.  What you need to watch out for the the HOA fees because some communities are much higher than others.  But the low tax rate combines with some exceptional properties and excellent location to make Doral a place you should definitely look into.

    Aventura
    We used to be higher on this city but recently there has been so much development that it feels like the traffic makes it impossible to get around after 9am.  Still there is a definite draw for quality tenants who want to live in a semi-luxury community.  Cost of entry is high but the low tax rate can somewhat offset that, although Condo fees still remain high, so only look here if you really like the mall!

    Bal Harbour
    Pretty much the same story as the Key but there are some condo buildings that are a bit older that can provide a more manageable amount of cash out of pocket.  The area is growing as well with revitalization happening in the famed Bal Harbour shops and the surrounding areas.  Again you should vacation here but probably not invest.

    Key Biscayne
    It is surprising that such an expensive community would have the lowest tax rate in the county but we might guess a reason…good lawyers?  But there isn’t much else to say, while this may be a great place to buy your next vacation property, the high cost of entry means you should probably avoid investing here unless you have very deep pockets!

    We hope that gives you some insight into where you make your next purchase…start in Unincorporated Miami-Dade county if you are looking for Single-Family and start in Doral if you are looking for new construction townhomes.  If you want to have low cost of entry look down the road in Cutler Bay and Palmetto Bay.

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  • Should You Invest In South Florida Real Estate?

    Should You Invest In South Florida Real Estate?

    Quick Hits: If you’re planning to buy a home, do it now, because prices are going up for the next few years. Investments in single-family rental properties have good potential in Broward County. Apartment developments have the best potential in Miami-Dade. Mortgages have higher risk even though prices are rising. Best bets for investments in retail or restaurants are in Palm Beach County, which also needs medical office space.

    With a large number of second homes and condos, South Florida is prone to boom and bust cycles that stem more from investment hopes than housing needs. Add an expanding Latino population and waves of baby-boomers – two million retiring every year – and you get both risks and opportunities. Demand for Florida housing is always growing, but is it growing slower or faster than the supply?

    The percentage of second homes increases as you head north from Miami, to 20 percent in Palm Beach County. This large pool of empty properties is the swing vote in home prices. It can swamp supply during a downturn but also represents the desire of future retirees – and South American investors – to buy while they can.

    The economy of Miami itself is diversified – with an important finance sector – but as you go up the coast more jobs are in retail and services. Healthcare is the largest creator of jobs in all three counties, and growing rapidly.

    Home prices were strong in the last three years – up 40 percent – and I expect they’ll keep rising 10 percent a year. But… How much of that 40 percent was from speculation in foreclosed condos? How much from ‘real’ demand? There are strong reasons to believe that from here on we are looking at prices going higher than they ‘should’ – especially in Broward County – in other words a mini-boom that will fizzle after a few years. If you’re looking to buy for the long-term, do it now. If you’re looking for a short-term investment, be very, very careful.

    Because rents held up better than home prices during the recession, buying a property to rent out is an attractive option despite the recent rise in prices, less so in Palm Beach County, more so in Miami-Dade and Broward. Almost half of households in Miami are renters. With most the new healthcare and retail jobs paying low wages, the renting population will increase. In urban areas it makes sense to buy a single-family house and split it into rental units. Apartment buildings are a good option in Miami – at the right price.

    Mortgages are a difficult investment right now. Because home prices will keep rising the next few years, the equity cushion for new mortgages will grow quickly; on the other hand, prices are almost too high in Broward and Miami-Dade already, which means these mortgages will have a rising risk of default. Just because the last bust is over doesn’t mean a new one isn’t around the corner. Lenders should back away from high loan-to-value mortgages during this period. The same is true for construction loans; new projects should be financed in very careful stages.

    Population is growing at an uneven pace, slower in Miami, faster as you move up the coast. Over the next three years I expect a 10 percent increase in housing needs in Palm Beach County – 30,000 owner properties and 23,000 apartments. I expect 25,000 of each in Broward, and in Miami 30,000 houses and 36,000 apartments.

    The climate for investments in retail businesses and restaurants is best in Palm Beach County, where demand has grown quickly the last two years and average income is the highest. All three counties, but especially Palm Beach will need office space for the growing number of healthcare workers.

     

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  • Feeling over-taxed in Miami? Maybe. But it’s four times worse in New York.

    Feeling over-taxed in Miami? Maybe. But it’s four times worse in New York.

    Property taxes may be high in Miami, but they’re not New York high.

    An analysis by Attom Data Solutions found the average owner of a single-family home in Miami-Dade paid $4,129 last year. That’s higher than most large counties across the country, but still trailing 100 of the priciest large counties for tax bills.

    There’s Marin County in California, across the bay from San Francisco, with an average tax bill topping $10,500. That’s not even a Top Five bill, though. The highest rankings go to the New York suburbs. Number One on the list, New York’s Westchester County, sent out an average tax bill of more than $16,000 for single-family homes last year.

    High tax bills in South Florida

    The average tax bill in South Florida is steep. In terms of taxes paid, Miami-Dade and Broward both land in the top 25 percent among the country’s 586 largest counties. Those counties each have a population of at least 100,000 and have at least 10,000 single-family homes.

    The rankings compare only property taxes charged to single-family homes, offering a broad look at a a top household expense across nearly 600 of the country’s largest counties.

    “Nobody likes to pay property taxes,” said Daren Blomquist, a senior vice president at Attom, an Irvine, California, firm that tracks public record real estate data and operates RealtyTrac.com. “Property taxes are a major but largely hidden cost of home ownership that may not be clear to buyers until they actually own a home and start receiving the tax bill.”

    South Florida tax rates are about average

    Miami-Dade and Broward counties’ tax rates straddle the middle of the pack. Miami-Dade has a lower effective tax rate than 54 percent of the country’s largest counties. Broward charges a bit more for property taxes with an effective rate that’s lower than just 42 percent of the country’s largest counties. This data looks at the country’s 586 largest counties, defined as having a population of at least 100,000 and having at least 10,000 single-family homes.

    Miami-Dade’s average tax bill of $4,129 is higher than those in 75 percent of the country’s 586 largest counties. That’s largely thanks to Miami-Dade’s pricey real estate market, where the average single-family home is worth more than its counterpart in 88 percent of the other large counties.

    In terms of the actual tax rate, Miami-Dade comes in lower than more than half of the large counties. The average single-family owner pays an “effective” tax rate of 1.01 percent.

    Home values super high in South Florida

    South Florida’s single-family home values are some of the highest among the country’s largest counties. Miami-Dade County’s home values are higher than 88 percent of the country’s 586 largest counties, defined as having a population of at least 100,000 and having at least 10,000 single-family homes. Broward’s values are higher than 85 percent of counties.

    Miami-Dade property owners actually pay property-tax rates of between 1.6 percent and 2.6 percent, depending on the city.

    Attom calculated its “effective” tax rate by limiting the data to single-family homes across the country. That excludes condominiums, which make up a significant chunk of Miami-Dade’s housing stock. Census data from 2015 show just 51 percent of Miami-Dade’s homes are detached single-family residences.

    “It’s good news for taxpayers to see that kind of a tax rate,” Blomquist said. “That may be a small consolation. It’s still more than $4,000 a year.”

    In Broward, the 1.19 percent effective tax rate is higher than Miami-Dade’s. The average tax bill is a bit steeper too, at $4,295. That gives the average single-family-home owner in Broward a higher tax bill than 78 percent of the country’s largest counties.

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