Miami Dade and Broward Landlords Left Out


Landlords in Miami-Dade who own hundreds of rental properties are losing lifeblood to the point where many will need to sell or be prepared for a two to five year wait while the market comes back to full strength. Under either option, there is no doubt that the real estate market in Miami-Dade and many other Southeast Florida counties will be hurting.

The National Association of Realtors present a different picture. They feel that it's only a matter of a few months before the market turns around. Miami-Dade rental property owners believe that the prospects for a significant turnaround are much further in the future since many of them will be bailing out on their losing holdings and selling them off at whatever price they can get. This will ultimately increase inventory which is already dangerously high and lower the prices as these properties come on the market.

One positive impact which the new legislation will have on the market for real estate is to the buyers who are just moving to Florida. The falling house prices will encourage these non-homesteaded buyers to purchase. The new legislation will save those current buyers about $2,000 on a $300,000 homes. They would be paying $2500 instead of $5500 in tax bills. And, once they purchase, the property will increase in value, presumably with a corresponding increase in the tax bills in future years.

Some real estate agents feel that the legislature should have rolled back tax rates to 2002 or 2003--before the real estate bubble happened. Another sore point is the revenues collected by local governments during the last five years. They are perceived as simply benefiting unfairly by keeping monies that rolled in during the boom. At present, the local governments appear to be the only ones happy about the tax revenues collected.

Lobbyists with the National Association of Realtors working with Florida legislators agrees that the new legislation did not go nearly far enough to solve the needs or the real estate slump currently going on. But, they say they felt that had pushed the issue as far as possible for this session and view the legislations as only a starting point. The lobby for the National Association of Realtors plans to continue working for further rollbacks.

The question of whether there will be enough landlords of rental properties in the Florida markets willing or able to hold onto properties which are essentially a cash drain every month. The rapidly escalating housing market value, including those of rental housing have corresponded with rapidly increasing tax bills. In the meantime, the average rental prices while also increasing have not kept pace with the tax bills.

The annual property tax rates in many areas have more than doubled during the last three to five years. Landlords are simply unable to charge enough to pay for taxes, insurance and in most cases debt service, leaving them with the choice of dumping the properties at bargain basement properties or accepting a negative cash flow position at present with the hope that things will improve in the near future.

Gus Taperman holds a Bachelor's degree in Commerce and completed his master's in Business Administration. He is working as writer and financial consultant http://www.taperman.com

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