Thanks for the great answers so far everyone!

It looks like my target zone is in the SoFi (south of 5th) area, and a recently built ocean front condo.
If you have any other insights to share re: timing or "things to consider" when buying a condo that I'd also like to rent out most of the year, please let me know.

Sami,

Let me try to best answer your question.

On timing... as levels of inventory continue to increase daily we will continue to see prices decline. I have stated before that I believe levels of inventory on South Beach should begin to stabilize late 2008 for single family homes and most buildings built before 2002 . One thing you need to consider is that, right now, there are deals to be had. In addition, at the end of this month interest rates will be lowered again. Great time to be a buyer!!! If you are set on waiting to see what happens, I would recommend that you begin your search at the end of the second quarter. This is a very efficient market. There are many buyers waiting for the right deal. Most of the out-of-towners I work with also request to buy on South Beach. So you remember you are not alone. Get active in the market and be READY TO BUY!

Location - Definitely South Beach as you have stated and highly recommend waterfront, either oceanfront or bayfront building. Make sure you buy what is considered the best unit in the building. As Kevin mentioned you want direct water view, best floor plan on a mid-to-high floor and make sure building is not too old. These units will always command a premium over other units in the building.

Other considerations, since you would like to have it rented out for most of the year, make sure that the Condo Association has flexible rules regarding rentals. Some associations do not allow rentals.

Best of luck in your search and I hope you continue to post questions.

Working with an insider, that knows the market, is the only way you will be able to know which properties are good buys and which are not. The upper tier market is untouched by the whole media craze, and there are plenty of distress sales out there.

I recently worked with clients from NY and saw listing in several downtown projects with "insiders" and I wrote about the experience. Those same "insiders" have been corresponding with me for the last month and their own prices have dropped over $100k - that's pretty extreme in by book for only one month, especially when they were telling my clients what good buys they were then.

As for location - sand under your feet. You will have plenty of choices.
Good Luck!

Kevin has the right perspective! Now is just as good a time to buy as ever. Of course, If you listen to and subscribe to the media reports... I've heard that the market will continue to drop off for the next 30 months or so. In reality, try presenting a somewhat low offer on a desiresble property- most likely the offer will be rejected.

Inventory is high - that does give the buyer an advantage.

There are many buildings and "neighborhoods" to choose from, SoFi, NoBe, South Beach and others. Depending on your price range and general criteria. If you plan on using the apartment part of the year- an annual lease is out of the question. Check the condo regulations thoroughly- some condominiums allow only certain number of leases per year with minimum lease terms. Perhaps a condo/hotel would suit your needs.

OH ---a market-timer, I see! Well, with regard to timing your purchase correctly, NO broker can predict the best time. NO broker can tell you when the market is at the peak or bottom. I see you are looking in South Beach condos with is the least affected sector of Miami real estate. Also, It depends on your criteria for a condominium and your price range. That will help your agent give you add'l insight on when is a good time to buy.

For example: If you wanted to buy a $5M condo in SoFi---NOW is the time because the ultra-high end of the market continues to hum at a nice clip.

There is no doubt that great buys will be had for the next year or two but first you have to decide what you want and see how many choice your have in your specific criteria.

As for location, you have a few choices:

1. South of Fifth street neighborhood is considered very desirable and rental inventory is very low.
2. Oceanfront south of 63rd Street is a very safe bet too.

Considerations:
View (most important factor)
Age of building
floor plan