Miami 1-bed: $1,205,000 purchase and $6,893 monthly rent—does the yield survive expenses?

[porch.direct]

Using the full $6,893 monthly rent makes the deal look workable. Applying a heavy expense haircut makes it difficult to justify. Neither case feels reliable yet for this $1,205,000 Miami one-bedroom apartment.

The annual rent would be $82,716, or about 6.9% gross. I have allowed for management, ordinary repairs, vacancy and a separate maintenance buffer, but insurance may be the expense that changes the answer. I may also be understating property tax after purchase or costs sitting at building level rather than inside the unit.

My decision rule is developing into two branches: if the rent is supported by completed leases and the association finances are sound, judge it on unlevered net cash flow after realistic tax, insurance and reserves; if either is weak, rerun it with lower rent, longer vacancy and possible building charges. What net yield would make that remaining risk worthwhile, and which local cost should I verify first?

 

[teaAndCairn]

Association costs may be the bigger trap than your unit maintenance reserve. I’d want the current dues, insurance allocation and any history or discussion of special assessments. A sound-looking building can still have a strained budget. Also model property tax based on your purchase rather than assuming the seller’s present bill carries over unchanged; confirm the treatment locally.

 

[GoodSignal]

How firm is the $6,893 rent? Is it supported by comparable long-term leases, or is it an asking figure that assumes ideal timing? For a 1-bed, even modest leasing costs and a gap between tenants can take a noticeable bite. I would run a second case with lower rent, turnover costs and more than one month vacant rather than treating vacancy as a smooth annual percentage.

 

[SlowYard]

I wouldn’t let insurance become the only focus. It matters, but taxes, association dues and management are recurring drains, while tenant turnover can arrive in lumps. Start with gross rent and subtract every owner-paid cost without relying on appreciation. If the result only looks attractive after optimistic rent growth, the 6.9% headline is doing too much work.

 

[anika_vale]

Financing could change the answer completely. Is this intended as a cash purchase, or will there be a mortgage? Run the payment against a lower-rent year and an insurance increase, not just the expected case. A property can show an acceptable unlevered yield while producing weak or negative cash flow once debt service is added.

 

[GoodSignal]

I’d request the association budget, current dues, insurance details and assessment history, then get an insurance indication for the unit before committing. Separately, verify what the tenant pays: utilities, parking or other building charges can affect whether $6,893 is truly comparable with nearby rentals. Those details would answer both Amir’s association concern and my question about the rent assumption.

 

[kai.wells]

For me, anything below roughly a 5% stabilized unlevered net yield would feel thin for this deal, especially when the gross starting point is only 6.9%. That is a personal hurdle, not a Miami rule. I’d calculate it after property tax, association dues, insurance, management, realistic vacancy, turnover and reserves. If verified numbers land well below that, I’d want either a lower purchase price or a compelling reason beyond current income.