Over the past six months,  I have seen affluent buyers from all over the world allocating a portion of their wealth to a vacation home or condo in Miami Beach.

The stock markets were the "safest" place for long-term investment until 10 months ago.

Many people who lost a portion of their net worth in something intangible (stocks) have decided they may as well have their cash invested in something very tangible and enjoyable:  a South Beach Home they can visit and loan to their friends for vacations - be sure to charge them a cleaning fee ;)

Many of my clients live overseas or out of the state of Florida and use their Miami Beach home as a vacation home. I handle property management of some of my clients’ Miami Beach Homes so I have a good general idea of the carrying costs of a home. To give you a quick example let's use a home with a selling price of $4,000,000. Florida property taxes are the biggest cost in maintaining a home here in South Beach. Whether you are a U.S. resident or foreign national your taxes will be the same; approximately 1.9% - 2% of the home’s assessed value. Here’s a quick example of annual carrying costs on a Miami Beach home that has a market value of $4,000,0000: Property taxes - approximately 2% of the selling price = $80,000 per year Insurance (flood, wind, theft) = $30,000 per year (rough estimate) Utilities - Water, Electric, Direct TV =$8,000 per year Pool Maintenance $400/month = $4800 per year Landscaping maintenance $500/month (on average) =$6000 per year Housekeeping (maintenance) $150/month =$1800 per year Property Manager $400/month.

The total carrying cost of a $4,000,000 Miami Beach home is approximately $135,000 per year. I hope didn’t scare you off with these figures! The bulk of the carrying costs of a Miami Beach home are in the property taxes and home insurance. Florida does not have a state income tax, so a large portion of the tax revenue for roads and schools comes from property taxes. Feel free to call or email me anytime with questions regarding Miami Beach real estate.

Everyone knows "location, location, location" is the cardinal rule of real estate.

But, you may not know a good location from a great location if you are from out of the Miami Beach area. Here is the unofficial hierarchy of Miami Beach Waterfront home locations:


Hierachy of Best Miami Beach Waterfront Home Locations

Star Island - facing South/Southwest are the most valuable property locations as you have panoramic views of downtown Miami from the back yard-spectacular at night. Imagine watching the fireworks with 100 of your closest friends on the Fourth of July and New Year's Eve.

Sunset Islands - (homes with S/SW views only) Sunset Islands I and II hold the most land value, then Sunset Islands III and IV. Once again, wide bay south/southwest views of downtown are the best, then homes with wide bay views facing west or north/northwest.

Upper North Bay Road Waterfront Homes have west/southwest wide bay views of downtown.

Palm Island (east side/estate homes). Big south facing downtown views, yet you will hear the hum of traffic from the MacArthur causeway.

Venetian Islands (homes facing south only). These homes on S Venetian Way and the point lots on Rivo Alto, Dilido, and San Marino Islands have the prime downtown views. In addition, you have nice views of the boats moored in the little bay area south of the Venetians.

Lower North Bay Road homes face the Sunset Islands with west facing views, yet this location offers more protection for your yacht compared to homes on the wide bay. In addition, homes on lower N Bay Rd are considered "South Beach". You can walk or bike to the new Publix, Sardinia and Lincoln Road.

Pinetree Drive facing east. Most of these homes have 100' to 175' on the water. Your backyard view is of the intracoastal waterway. This is a terrific location for yacht owners.

Then you have Sunset Islands (not S/SW views), Hibiscus Island, and Venetian Island Homes with canal views.

Of course, the square footage of the land and the total linear feet of waterfrontage will affect land value as well.

When you are in the market for a waterfront home, I will do all of the homework for you and ensure that you buy a fabulous Miami Beach home with inherent value. Have a great night.

With most Miami Beach waterfront homes, the land is worth more than the structure, so I generally used price per square feet for the land as my guide to determining the best values currently for sale. The attached spreadsheet shows price per square feet for the land and price per square foot for the structures.

Bear in mind, the best waterfront deals typically need some degree of remodeling work. If a home has been recently renovated and is in a prime waterfront location, it is highly marketable and will sell for a higher price.

Miami Beach and South Beach in particular attracts home buyers from all over the world who have their 3rd, 4th or 5th vacation home here.

Overseas and out of state buyers will pay extra for a home that is already remodeled as communicating with contractors is not always convenient for the affluent. In addition, it can be time-consuming.

In my opinion, buyers of prime waterfront property who are willing to hire a contractor and invest in renovations will be rewarded.

For your information, an acre equals 43,560 square feet or 4047 square meters

Here are the best deals on the market as of May 5th, 2009. I will be happy to email you with the data and spreadsheets I used for my study. These are not my listings so I am not giving you biased “best deal” recommendations.

1520 W 21st Street $1,450,000 for an 8700 square foot lot or $166/sf for the lot. This is the lowest-priced South Beach waterfront home on the market in 3-4 years. There is a contract on the house, but the owner is accepting back-up offers. MLS M1288940

830 W Dilido Drive MLS M1271561 is listed at $2,950,000 or $220/sf. The home is open and updated with 110’ on the open bay. This point lot faces west with downtown views (if you look south from the pool).

430 W San Marino Drive. MLS M1213306 is a partially remodeled home with decent downtown views from the back yard and 100’ on the water. I believe this is the home we discussed.

2940 N Bay Rd $6,900,000 for over an acre on N Bay Road. MLS M1265269
This home has 150 feet on the water with a 43,988 sf lot. That breaks down to $156/sf for the land, which is a reasonable price. The house is a tear down as there is no room for a pool if you use the existing home. The pool used to sit southeast of the home before one large lot was subdivided into two lots. The view from the back of the house is N/NW with a view of the Julia Tuttle (195) causeway.

Sister Property:
2920 N Bay Rd $7,900,000 MLS
$153/sf for the lot.

4949 Pinetree Drive is an amazing deal. Listed at $11,900,000 for 102,671 square feet of land (roughly 2.5 acres) and over 671 feet of water frontage. MLS 1312130. You can dock two 100’ yachts on this property. The property features a clay tennis court, main house, pool cabanas and two guest homes. Take a look at the pictures, this home is breathtaking. The original owner of this home was the Kresge family, founders of K-Mart.