Key Largo Condo Serves
As Family Home and Investment
Editor's Note: This is the fifth installment of "Resale," a feature that profiles vacation-home owners and their residential investments. We'll take a look at homeowners' purchases, expenditures for improvements and/or mortgage costs, and their final gains upon resale -- and compare their profit to home-price appreciation rates in the area.
Purchased: April 2003 for $799,000
Sold: March 2006 for $1.07 million
Home-price appreciation over three-year period: $271,000 or 33.9%
Key Largo condo appreciation over three-year period: 65%
Key Largo, the longest and largest island among the 100-mile chain of islands in the Florida Keys, offers a tropical, Caribbean-feel vacation without ever leaving the U.S. Key Largo, with beaches that consist of living reefs, is known for its scuba diving.
The property: The owners purchased the 2,000-square-foot condo before it was built in April 2003, and moved in more than a year later in December 2004. The three-bedroom home with two and one-half baths cost them $799,000. The first-floor unit, which opens to the beach, is part of the Mariner's Club resort and has recessed lights, sliding glass pocket doors and high-end appliances.
The sellers: Ron Miller, 44 years old, and his wife, Lee, 45, live in Santa Monica, Calif., and are attorneys at law firm, Disability Group, Inc. They enjoy vacationing in Florida with their two children, ages 9 and 7. "Key Largo reminds me of the old Florida I went to as a kid," Mr. Miller says. "It's like being on an island that you can get to [non-stop] with one frequent-flyer ticket and without the hassle of international airports." Mr. Miller, who specializes in Social Security disability insurance, adds, "Both Lee and I are certified open-water divers and we do that every time we are down there. Also, we have taught both kids to snorkel and free dive there. We are also avid boaters and always rent boats to tour the Keys and visit the Islamorada Sandbar." The family vacations in the Keys two to three times a year and stays about seven to 10 days each visit. The Millers sold the unit, the second that they have owned on the island, to purchase another condominium in the same development. They own two other vacation properties: one in Canyon Lake, Calif., and the other in Elk Rapids, Mich.
Improvements: No physical fixes or upgrades were made to the property, but the Millers did sell it furnished. They included $50,000 worth of items in the sale of their condo, including all the beds, couches, televisions, dishware, tables and chairs.
Transaction: After 125 days on the market, the property sold for $1.07 million, about $30,000 below the reduced $1.1 million asking price. (The original asking price was $1.15 million.) The offer was one of several, Mr. Miller says. They accepted less than their asking price because they expected to negotiate from the figure, Mr. Miller says. "We thought it was a fair price," he says of the final offer. The price cut the Millers accepted is typical of the local market, says the couple's real-estate agent, Bob Grundei of Century 21 Prestige in Islamorada, Fla. The sale fetched the Millers $271,000 above what they paid for the property. They also received $80,000 in rental income from the property management company for renting the unit out over an 18-month period. Their profits don't take into account annual property taxes of about $8,000 and the 5% real-estate commission (or about $50,000) they paid.
The bottom line: "We have always believed that direct waterfront property in the Florida Keys is a great investment," Mr. Miller says. "They just don't make any more oceanfront land, and a quality development will always hold or increase in value. I guess we believe in the appreciation of Keys property more than we do in the stock market." George Rosendale, owner of Rosendale Appraisers in the Keys, says Key Largo condos have appreciated 200% in the last five years, but are now leveling off. "It depends on when you sign the contract sometimes. Three months earlier and [The Millers] may have seen even greater gains," he says.
Sources: keyproperties.org, escapehomes.com, disabilitygroup.com, florida-keys-appraiser.com
Have you recently sold a second home that you think would make a good Resale profile? Email a description and a photo of your property.
-- Ms. Curry is a free-lance writer in Maple Grove, Minn.
Email your comments to rjeditor@dowjones.com.