It's been a while since I blogged, and lots has changed in my life since then - first for the worse, then for the better. Recently I have been loving life and making good money playing live poker in Florida. I'll write up a blog about this later, but for now I have a time sensitive issue that I want to discuss.
I've really taken a liking to South Florida during the past month, particularly Fort Lauderdale. Fort Lauderdale is just more my kind of place than Miami.....I'm really not big on the Miami scene where it's all about showing off and dick-waving about who has more money. Fort Lauderdale, by contrast, has a bunch of fun bars downtown that attract a crowd that I'm more suited for, including a bunch of college students. I've gone out there a few times and had a blast every time (having great friends doesn't hurt there). So basically, I'm very confident that Fort Lauderdale is a place where I will very much enjoy spending time. The poker games down here are pretty good too, especially during tourney series, which are becoming more frequent.
I've been strongly considering buying a condo in downtown Fort Lauderdale. If I do this, I will spend 2-4 months a year here (mainly when poker games are good and/or when weather up north sucks) and let trusted friends and family members use it a bit. The places I'm looking at are high end and in the 2 nicest (IMO) buildings in the city: Las Olas Beach Club and the RiverHouse. Both buildings are less than a decade old, and I viewed the units and they are in excellent condition.
All of this excites me, but several friends whose opinions I highly respect think I'd be foolish to buy and that renting is a better alternative. My arguments for buying:
-I'd be acquiring an asset that is in high demand. Las Olas Beach Club is the only building in the heart of Fort Lauderdale beach that is zoned for just condos. The rest are all resorts, some of which are hotel/condo hybrids but those are only available to use as time shares. Anyone who wants to buy a condo on Fort Lauderdale beach basically only has one option. RiverHouse is similarly attractive since it's just insanely nice and nothing contends with it downtown.
-Because of the above and the fact that real estate prices in Florida are still far below 2008 levels, I would think that the condo would have a solid rate of return (aside from taxes/fees, which do kind of suck). I am far from a real estate expert though and am very curious to discuss this point with anyone who is.
-Mortgage rates are very low. I can get a 15 year mortgage at 3.25% or possibly even better. I have a very strong credit rating, so I could probably put a minimal amount down (10-20%), and this isn't an issue since I have plenty of free cash from both opting to lie low in the stock market and winning a bunch in Florida poker games.I am trying to sell my house in Ithaca (no offers yet but promising) and after that I will have hardly any real estate exposure (just a little in REIT funds). Real estate seems like a good buy low opportunity right now (as long as it's quality RE), but again I am no expert.
-This is sentimental a bit, but I feel like I'd very much enjoy owning my own place where I can have a lasting home base and a place to put my stuff. One thing that bothered me a lot in Vancouver was the fact that I could only bring so much stuff and was limited in what I could buy/bring home. I actually bought a $1000 Apple monitor up there and ended up basically giving it away when I left since it was so impractical to bring back. My Ithaca house served this purpose for a while but now I'm renting it out and trying to sell.
Some of the best arguments against buying (and my refutations):
-These places are not cheap. Buying one wouldn't kill my financial flexibility by any means, but it would make my portfolio overweight in real estate. That said, I feel like my earning potential going forward is quite strong and that there's a good chance it would not be overweight within a few years. And if I don't end up making much money or even losing, I can always sell, which wouldn't be optimal in a short time frame but also not the end of the world.
-I'm 23 and I may think I know what I want, but I realize how much different I am now than 3 years ago and even 1 year ago, and my tastes may change. That said, living near the beach and a ton of great golf courses and fun nightlife with great weather just seems like something that I'd always want, even if the poker games dry out eventually. Some friends made the argument that for the same monthly payment after taxes and fees I could spend something like 70 nights in luxury hotels all over the world for the same amount. I have 2 counters to this, (a) that I'm buying an asset and the monthly payments are more investments than cash drain. I've really never understood the arguments that say otherwise as long as one's overall cash flow is positive.... and (b) I honestly think I'd rather spend a bunch of time in one place that I really like than travel for 3 months a year (I'd still travel some of course). To be frank, I was pretty depressed this past winter (which was the main reason for me not blogging/making videos/playing) and I think a lot of it had to do with me feeling a lack of stability, only being able to develop fleeting personal relationships since I was moving from city to city so much, etc. I really value the stablity and forming lasting relationships and I think this would help me in that regard.
There are more arguments against but I'm a bit pressed for time.....I'll think more and type them up in the comments. For now, I'm curious to hear people's opinions and to hear people try to convince me that buying is a bad idea.