This past week, I had the opportunity to work with several clients (all Cash Buyers) who looking for purchasing opportunities in the waterfront luxury condo buildings South of Fifth Street: The Murano at Portofino, The Continuum South Beach, Murano Grande, Icon and even The Bentley Bay.

These Miami Beach Condo Buyers- are finding amazing opportunities in some of the lesser known South of Fifth Waterfront Buildings! I've recently made several cash offers at The South Pointe Tower in South Beach. Being an older condominium with late 1970"s construction standards, The South Pointe Tower had not been considered the most "IN" condo building. However, this South Beach condo offers an incredible location next to The Portofino Tower (part of the same Master Association) and has recently been renovated inside and out. Also, the common area hallways are currently being updated with new doors, carpeting, and other improvements. I'm amazed that in this older condo building- due to its amazing location South of Fifth Street (behind South Pointe Park and facing Fisher Island) - almost ALL the available inventory has sold out !!!

The Latest Sales Data for the South Pointe Tower Condos in Miami Beach's South of Fifth Neighborhood:

I'm constantly asked, who's buying in these challenging economic times?The answer is highly qualified end-users primarily from Europe and Latin America! Based on my recent experience, Eastern and Central Europeans, Brazilians, some Venezualan and Colombia, and Argentine high net worth individuals. Today's buyers primarily look for premier waterfront luxury homes and condominiums in South Beach as a great investment opportunity given the recent price reductions and limited inventory.

Especially in such premier waterfront ultra-luxury condo buildings such as The Continuum North and South Towers, Icon South Beach, The Murano Grande, Murano at Portofino, and Apogee Condos have drawn strong European and Brazilian luxury buyer interest.

It's my belief hat these condo buildings draw strong international buyer attention due to their prime waterfront locations in the Miami Beach's South of Fifth Neighborhood / District. These contemporary condominium buildings are located in an area of Miami Beach with stringent building restrictions (no waterfront land is available for future development). Also, The Continuum on South Beach boasts such amenities as TWELVE amazing Oceanfront acres at the Southernmost tip of Miami Beach. The individual condominiums in all of the mentioned buildings feature a minimum of 9' floor to ceiling sliding glass doors and windows, top of the line European Kitchens, incredible views of the Ocean, The Downtown Miami skyline. All of these condos feature oversized bathrooms with whirlpool bathtubs, European cabinetry in Bathrooms and Kitchens, private beach and pool cabanas, and state-of-the-art amenities.

For example, at The Continuum on South Beach, residents have an on-site three-story fitness center (A Marco Borges Concept) with an incredible selection of free weights, yoga and pilates classes, a private lap pool, THREE sunken Oceanfront Tennis Courts, Men's and Women's private jacuzzi's, massage rooms, as well as steam rooms and dry saunas.

A common cliche is that real estate is all about location location location (and long term supply and demand). Luxury waterfront condominiums in Miami Beach, and particularly in South Beach's South of Fifth Neighborhood, are an excellent example of the BEST location with VERY LIMITED future supply. Due to Art Deco Preservation League & City of Miami Beach zoning restrictions, NO new waterfront buildings are to be built for the foreseeable future.

That's right, NO new supply is planned, given the current physical and legal constraints imposed by the City of Miami Beach. The Murano at Portofino, The Portofino Tower, Apogee, Icon South Beach, The Murano Grande, and The Continuum on South Beach's are all direct waterfront condo buildings. All of these luxury condo buildings are located in the heart of the South Beach's South of Fifth Neighborhood- with world-class food, boutiques, and the many other unique attractions within Ten minutes walking distance!

Is this a fantastic medium to long-term investment opportunity? Come and take a look at a few of the condominiums I highlighted in this post, and decide for yourself!

Trulia recently released results from its Rent vs. Buy Index, which tracks whether buying a home or renting is less expensive in America's 50 largest cities, based on current market conditions. This index calculates the price-to-rent ratio using the average list price compared with the average rent of two-bedroom apartments, condos and townhomes. So I was curious- How this index specifically applies to Miami Beach condominiums, especially price reduced waterfront condominiums in such ultra-luxury buildings as The Continuum on South Beach, The Murano Grande, and Icon South Beach in the South of Fifth Neighborhood. I also decided to compare some of the more affordable waterfront condo buildings (due to the recent drastic price reductions), such as The Floridian and The Bentley Bay along Miami Beach's West Avenue.

Example #1: The Continuum on South Beach- North Tower #905 (Regular Sale)
Closed Sales Date: 06/30/10
Sales Price: $1,200,000
Rental Price: $8,000/month (2009 Actual Rent)
Price-to-Rent Ratio: $1,200,000 ÷ ($8,000 x 12) = 12.5

Example #2: The Murano Grande at Portofino #1705 (Bank Owned Sale)
Closed Sales Date: 10/08/10
Sales Price: $548,400
Average Rental Price: $4,000/month
Price-to-Rent Ratio: $548,400 ÷ ($4,500 x 12) = 9.8

Example #3: Icon South Beach #906 (Bank Owned Sale)
Closed Sales Date: 03/15/10
Sales Price: $475,000
Average Rental Price: $4,000/month (2009 Actual Rent)
Price-to-Rent Ratio: $475,000 ÷ ($4,000 x 12) = 9.8

Example #4: The Bentley Bay #1411 (Bank Owned Sale)
Closed Sales Date: 08/31/10
Sales Price: $460,350
Average Rental Price: $3,500/month (2009 Actual Rents)
Price-to-Rent Ratio: $460,350 ÷ ($3,500 x 12) = 10.9

Example #5: The Floridian (West Avenue) #2010
Closed Sales Date: 01/31/10
Sales Price: $270,000
Average Rental Price: $2,250/month (2009 Actual Rents)
Price-to-Rent Ratio: $270,000 ÷ ($2,250 x 12) = 10.0

The results for Miami Beach, South Beach waterfront condominium buildings to be exact, indicate a slightly HIGHER index (as compared to downtown Miami) due to the downward pressure on annual rental prices. Miami Beach condominiums have been competing with an oversupply of downtown Miami condominiums available for rent at bargain prices. Also of note, the lower-end condominiums with LOW index values in buildings such as the Floridian, Murano Grande, and Icon which are either bank owned or in a short sale situation make much more financial sense (from a cash flow perspective) than the ultra-luxury buildings such as the Continuum on South Beach or the higher end & premier luxury condos. This also makes sense, as the ultra-luxury condo buyer looking for a premier floorplan / view is typically less price sensitive when it comes to potential rental cost vs. purchasing scenarios.

Trulia's Rent vs. Buy Index - Interpretation Key
Price-to-Rent Ratio of 1-15: It is much less expensive to own than to rent a home in this city.
Price-to-Rent Ratio of 16-20: It is more expensive to own a home in this city. The total costs of ownership of a home in this city are greater than the costs of renting, but it might still make financial sense depending on the situation.
Price-to-Rent Ratio of 21+: The total costs of owning a home in this city are much greater than the costs of renting.

Top 10 Cities to Buy vs. Rent:
1. Arlington, TX -Price to Rental Ratio: 7
2. Fresno, CA - Price to Rental Ratio: 8
3. Miami, FL - Price to Rental Ratio: 9
4. Mesa,AZ - Price to Rental Ratio: 9
5. Phoenix, AZ - Price to Rental Ratio:10
6. Jacksonville, FL - Price to Rental Ratio:11
7. Detroit, MI - Price to Rental Ratio:11
8. Columbus, OH - Price to Rental Ratio:12
9. El Paso, TX - Price to Rental Ratio:13
10. Nashville, TN - Price to Rental Ratio:14

Methodology:
The price-to-rent ratio uses the average list price compared with the average rent on two-bedroom apartments, condos, townhomes and co-ops listed on Trulia.com. This Index considers both the total cost of home ownership against the total costs of renting (examples of costs for both home ownership and renting outlined above). Note that variations in maintenance dues among the different buildings located in Miami Beach is not taken into account in this study, strictly the sales price. Monthly maintenance dues range from a high of $1.18/S.F. at Bentley Bay to $ 0.72/S.F. for Icon South Beach.

Data Sources: Southeast Florida Multiple Listing Service

The real estate agent's experience, marketing skills, and international resources are critical. However, having just worked with a few HIGHLY qualified and cash-ready buyers ready to pull the trigger at Murano Grande, Icon South Beach, Portofino Tower, and Murano at Portofino, there is another criteria which I must now mention: basic competence and responsibility.

I noticed a complete lack of professionalism (negligence is a better description) on the part of a large number of listing Agents and/or Brokerage firms. Disconnected phone lines, incomplete and inaccurate information on Multiple Listing for the condos that are on the market, voicemessages saying that the agent is out of the country / unavailable and NOT to leave messages, no voicemail pickup at all in three cases, no response to multiple voicemessages and emails, and sometimes a response days later that a showing can be arranged perhaps once per week and to contact the building front desk. I experienced agents not showing up for appointments or having to pick up keys at the management office, and finding that the door would not open! Once inside a few specific waterfront condos that are aggressively priced in the $1,000,000 range, we discovered an unkempt, and abandoned, dirty condos complete with foul stench, A/C turned off, and fallen down drapery! I was left wondering if the individual condominium owners realize how poorly they are being represented in this BUYERS market?!? Even the front desk staff, again specifically at Murano Grande, Icon South Beach, and The Portofino Tower, are grumbling about the laziness and irresponsiblity of these listing agents!

Only a very limited number of these waterfront condos are priced to sell, and those that are priced aggressively for some unknown reason seem to have negligent agents representing these REAL sellers. The vast majority of the 100+ initial condos that come up in a Multiple Listing property search are often times overpriced, nowhere near the market / appraised value. In each of the above referenced buildings- there are only a few condos that are truly worthwhile and that a buyer would give serious consideration to making a reasonable offer based on recent closed sales comparables.

If you're a seller of real estate in this BUYERS market- I urge you to check up on your listing agent. Call his/her phone number, look up your listed condo or home on the multiple listing service (easy these days via the web), see the pictures that are posted online, and if you are local BY ALL MEANS do check up on the listing. Better yet- have a friend call or email your listing agent (or a cooperating broker) and ask to schedule a showing. SEE FOR YOURSELF how the showing process is handled, and how your property is being presented to potential QUALIFIED buyers. You may be in for a shock.

Over the past week, I had the opportunity to take out two ready, willing, & highly qualified (cash contracts) Miami Beach condominium buyers to see The Continuum on South Beach, The Murano at Portofino, Icon South Beach, and The Bentley Bay. It was a shocking experience, in more ways than one.The purchasing criteria:Price point of $1 Million - $1.5 Million for a waterfront two bedroom condominium with water views. There are well over one hundred (100 +) individual condominiums to choose from that easily meet this criteria on the market for sale.

The first impression that I was left with was the complete lack of professionalism (negligence is a better description) on the part of a large number of listing Agents and/or Brokers. Disconnected phones, incomplete and inaccurate information on Multiple Listing for the condos that are on the market, voicemessages saying that the agent is out of the country / unavailable and NOT to leave messages, no voicemail pickup at all in two cases, no response to multiple voicemessages and emails, and sometimes a response days later that a showing can be arranged perhaps once per week. Also, we experienced agents not showing up for appointments or having to pick up keys at an office located over 10 miles away! I was left wondering if the individual condominium owners realize how poorly they are being represented in a BUYERS market.

That being said, I was also impressed that only a very limited number of these waterfront condos are priced to sell. The vast majority of the 100+ initial condos that showed up in a property search, with the above mentioned criteria, are overpriced and nowhere near the market / appraised value. In each of the buildings- there are only a few condos that are truly worthwhile and that a buyer would give serious consideration to making a reasonable offer. I'd like to highlight a few of the deals that were the equivalent of finding a needle in a haystack:

Continuum South Beach - South Tower #2301
Asking Price: $1,395,000
Comparable Sale #1901 : $1,160,000 (Short Sale)
Bedrooms: 2
Bathrooms: 3
Interior S.F.: 1,591 (Asking $876/SF)
Comparable Sold Date: March 10, 2010

Continuum North Tower - #1704
Asking Price: $1,395,000
Comparable Sale (#1204) : $1,250,000 (8/2009)
Bedrooms: 2
Bathrooms: 3
Interior S.F.: 1,491 (Asking $935/SF)
Comparable Sold Date: August, 2009

Bentley Bay Miami Beach - South Tower #1201 (Short Sale)
Asking Price: $870,000
Comparable Sale #1801 : $755,000 (Foreclosure Sale)
Bedrooms: 3
Bathrooms: 4
Interior S.F.: 1,994 (Asking $436/SF)
Comparable Sold Date: December, 2009

Icon South Beach - Condominium Unit #1106
Asking Price: $695,000
Comparable Sale #1706 : $725,000
Bedrooms: 2
Bathrooms: 2
Interior S.F.: 1,452 (Asking $478/SF)
Comparable Sold Date: March 19, 2010

Global Sales Data Source: Southeast Florida Regional MLS