Renters hold cards in today’s market

Lee County’s burgeoning skyscraper condominium market is a renter’s paradise — but a landlord’s hell.

Experts say as increasing numbers of condo units pour into an already overflowing supply of residential real estate, renters can almost name their price for even the costliest luxury units.

Jim Simon, for example, recently moved into a condo in the 32-story High Point Place in downtown Fort Myers, where the owners of its 105 units typically paid as much as $600,000 for the convenient riverfront location.

But Simon, a commercial real-estate broker, is paying only $1,350 a month — barely enough to cover the taxes and condo association fees.

“It’s like living in the Ritz-Carlton,” Simon said. “It’s got great amenities, it’s clean, it’s safe, it’s got a beautiful view.”

With only about 20 people living there, he practically has the place to himself, and with a number of similar projects under construction around downtown, he expects the good times for renters to last for awhile.

“It wouldn’t surprise me to see people get in for a little less than I’m paying,” Simon said.

The median condo resale price maxed out in February 2006 at $353,900, and by April 2007 the price had fallen to $244,100, down 31 percent, according to Florida Association of Realtors statistics.

As prices have fallen, so have rents. In late 2006 the average rent for a two-bedroom house was $940, down from an all-time high of $1,041 a year earlier, according to rental information service RealFacts.

Rents have continued to fall in recent months, as well, while the inventory of dwellings for sale stays at an all-time high of about 15,000, experts say.

Non-beachfront condos have been coming on line at an accelerating rate as well, in a trend fueled by speculators who bought pre-construction hoping to sell them quickly for a profit.

As a result, 829 new condo units in that category have been completed in the past 2€ years with another 1,769 under construction.

Owners are feeling the pinch on prices as renters have more to choose from.
A lot of people who bought condos as investments want to rent them out now because the market’s slow, said Joe Crimaldi of Rent SWFL in Fort Myers, who handles RENTALS leasing for condo owners throughout the area.

Not all equal

But not all skyscrapers are created equal, Crimaldi said.

For example, he handles leases in Riva Del Lago next to Lakes Park and Mastique on Bunche Beach Road, both in south Fort Myers, which he said are relatively easy to rent out. Riva Del Lago, which had three-bedroom units selling for more than $650,000, now has rentals around $1,500 a month. A three-bedroom condo in Mastique that sold for about $750,000 can be had for $1,750 a month.

But, he said, “I don’t go past Colonial Boulevard,” in part because he believes leasing out downtown units is an iffy proposition.

“In my opinion there aren’t enough jobs and not enough people to justify the downtown high rises,” he said. “Pretty much every lawyer downtown is over 50 and has a family and lives in a Fiddlesticks or someplace like that.”

Riva Del Lago, on the other hand, is close to the restaurants, shopping and offices along U.S. 41 and Summerlin Road in south Fort Myers, Crimaldi said. “It’s just more centrally located.”

Mastique doesn’t have the convenience of Riva Del Lago, but its proximity to the Gulf of Mexico makes it attractive to a retiree who is mainly looking for a place near the beach, he said.

A rental problem

One problem with renting out high-rises is people in this area simply aren’t used to having that option and need to be sold on the convenience of that lifestyle, said Marc Strengholt of Miloff Aubuchon Realty Group in Cape Coral.

He rents out units for owners of the Tarpon Landings high-rises, for example, but mainly to vacationers and part-time residents.

“It takes a little education,” Strengholt said. “People say, ‘Going to Florida and living in a condo, I’m just not ready for that.’ It’s a whole new way of life.”

Besides, he said, issues such as pets can get in the way. Tarpon Landings, like most condos, forbids renters from having pets although owners can have them.

Removing that restriction “would really open up the rental market,” he said, but owners who are renting out their units would have to get together to make it happen.
Another issue, Crimaldi said, is how many roommates can stay in a unit. For example, he’s looking into whether three young women will be able to rent a $1,495-a-month three-bedroom condo at Riva Del Lago under the rules there. If the rules don’t allow it, he’ll have to turn down their offer, he said.

Happy as renters are now, don’t expect it to last forever, said Don Paight, executive director of the Fort Myers Redevelopment Agency.

Slowly but surely, he said, the buildings are filling up. “Some may end up as long-term leases; the renters may like the lifestyle.”

But Simon said it will be a long time before the owners make back their money, while those who borrowed heavily to buy are in trouble.

At High Point, where people paid about $600,000 per unit, he said, “I do believe in five or 10 years they’ll all be million-dollar homes. The people who hang on without mortgages, they’ll do fine.”