Since your long term goal is to retire and live in Surfside, by the beach, I'd say (politely disagreeing here), stay true to your goal because you'll be enjoying Surfside in those retirement years very much!
Don't go buying in Homestead (where there is no water or little shops, restaurants and infrastructure as it is in Surfside and Bal/Bay Harbour)...Rental rates here are higher than in Homestead also, and the value will appreciate much much better (there is so much/so little of the beach and beach-y areas). The rental market is very hot right now.
I'd say go with 2/2 as it is more popular and more affordable for tenants.
3/2s are usually rent for a year or max 2 years, and then buy.
2/2 tenants stay longer usually.
This will be a less expensive buy for you, less money spent on taxes, and I feel you'll be very happy
here in Surfside (with your rental and your future home)!
Beachfront Realty, Inc.
The rental market is very busy with low vacancy rates in South Florida right now. It is because of course the foreclosure market hit hard and these people now need to live somewhere and cannot buy due to credit issues and tight banking regulations.
Your rental rates are about right, even a bit low due to the lack of inventory.
I did a search of the active and rented houses in Surfside and it is here:
Be sure to click through the llst from the arrow on the top left.. There are currently only 4 active rental houses is Surfside.
I feel your estimates for your insurance cost is what is high, possibly double. A house, even if a flood zone should not cost almost 1000/month to insure. A client of mine has a 2 bedroom home in a flood zone and she is paying about 450/month. I think you could have that number re-evaluated by several insurance agents, however it is difficult for thenm to give an exact amount not knowing the house you will buy, but they can do the estimated based on the location.
The taxes will be approximatly 1,8-2% of your assessed value, so at 400.000 they will be approximatly 7200/year, because you will not be able to take a homestead exemption until you live in the home full time.
When I use these numbers and include your mortgage I feel you are very close to breaking even. You do have to keep in mind that at teh low interest rates and the prices of property being at a low, you will be saving later if the prices go up and the interest rates increas, which we know they will!
I would be glad to find some insurance estimates for you and also send you the options for purchase to evalutate your options. I feel you could be very close to a break even with yoru rental.
Feel free to contact me directly and I will send you what I can find that fits your criteria.
Beth Jenkins'South Florida Brokers
Surfside Purchase price $329,000+, Current Rental prices $1360+
Homestead purchase price $42,000+, Current Rental prices $700+
It doesn't take a lot of math to realize the Homestead option is actually the better investment... however, you probably won't want to live in the Homestead property when you actually retire.