Florida Vacation Condo Turns
A Profit for Young Couple
Sunny Isles Beach, Fla., once a sleepy town with two and one-half miles of beach, is now referred to as the new Millionaires Row because of its newly built luxury condominium buildings. Midway between downtown Miami and Fort Lauderdale, Sunny Isles Beach receives about one million vacationers a year, according to city officials.
Purchased: Summer 2004 for $285,000
Sold: January 2006 for $395,000
Gain: $110,000, or about 39%
The property: The fully furnished 550-square-foot condo with balcony is one of 390 rooms -- 18 per floor -- in the building. Residents have access to the resort's amenities, including the pool and bar.
The home sellers: Two years ago, real-estate broker Sebastian Tettamanti, 29, and his wife, Maria, a writer and merchandise coordinator, were seeking an occasional weekend getaway from their four-bedroom, four-bath Miami home. They wanted something small and on the beach, but it had to be affordable and nearby so they could use it frequently. Due to the nature of his work, Mr. Tettamanti knew that Sunny Isles Beach would fit the bill, he says. They looked at several condo possibilities before they discovered the condo-hotel concept offered by the Trump International Sonesta Beach Resort. "A lot of the condo buildings have restrictions as to how many times you can rent it [to others]," Mr. Tettamanti says. "But with [the Trump resort], I can register it with the hotel's rental program when I am not there." The couple purchased an ocean-view unit and took weekend vacations there once or twice a month from May through August, and more frequently in July. When friends and family started tagging along, they decided it was time to sell and move to a bigger place, he says. With the help of a real-estate agent, the couple sold the condo and purchased a three-bedroom, three-bath unit in Trump Palace, an adjacent building in the same development.
Improvements: None
Transaction: They purchased the unit pre-construction for $285,000 in summer 2004, moved in at the start of 2005 and sold it for $395,000 in January 2006. That’s a profit of $110,000, not considering financing, maintenance fees or their 50% share of the $200 to $300 a night that hotel guests paid to stay in the unit. Mr. Tettamanti's maintenance fees were $389 a month, according to the resort's management company. During high rental season (November through February), he netted some profit by leasing out the apartment, Mr. Tettamanti says, but made nothing in the summer.
The bottom line: "When we found out the appreciation of the condo hotel, we decided to upgrade [to a bigger unit] even though we did not buy the condominium unit as an investment," Mr. Tettamanti says. The condo reaped a 39% appreciation rate, compared to 21% average for condos in Sunny Isles Beach. The property fared better than average in part because of the partnership between famous real-estate mogul, Donald Trump, and a well-known local developer, Mr. Tettamanti says. "One of the things that stands out about the building is that it is done by Gil Dezer and Trump," he says. "When you take one of the top luxury developers and put the Trump name on the project, it is easier to sell and brings in more money."
Sources: mirealty.com, dezer.com, Sunny Isles Beach
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-- Ms. Curry is a free-lance writer in Maple Grove, Minn.
Email your comments to rjeditor@dowjones.com.