Buying a Place
Buying can make sense for snowbirds who live at least six months of the year in Sarasota. Living six months + 1 day “may” make you a Florida resident saving you state income taxes (5% in Massachusetts) but it’s tricky, as previously described. You’ll save lodging taxes of 13%, but then you’ll face real estate taxes, home insurance, etc. if you buy. Lets weigh the options.
Houses
Most of the houses for sale in the downtown area are small and on tiny lots. Almost all were bought up and renovated to flip. As of 01/2025 there was just one downtown area house listed under $800,000 on Zillow – a home listed at $698,000 in Gillespie Park which has three bedrooms and two baths at 1460 sf on a eighth acre lot, shown below.
If it sells at Zillow’s estimated value of $666,000 and you put down 20% ($133k) that’s $3380/mo with a 6.5% mortgage and insurance and taxes included. That’s too much, especially as the big increases have already happened and property is estimated to go up in value only about 1% this coming year, so it is a poor investment given inflation will be over 2% this coming year.
Most of the houses for sale in the downtown area are small and on tiny lots. Almost all were bought up and renovated to flip. As of 01/2025 there was just one downtown area house listed under $800,000 on Zillow – a home listed at $698,000 in Gillespie Park which has three bedrooms and two baths at 1460 sf on a eighth acre lot, shown below.
If it sells at Zillow’s estimated value of $666,000 and you put down 20% ($133k) that’s $3380/mo with a 6.5% mortgage and insurance and taxes included. That’s too much, especially as the big increases have already happened and property is estimated to go up in value only about 1% this coming year, so it is a poor investment given inflation will be over 2% this coming year.
Expanding the Zillow.com search showed no single family homes for sale under $1,000,000, but there were three duplex, side-by-side units for $820k to $825k. A nice two-bed, two-bath (2/2) per side was Zillow-estimated to sell at $771,500 which could bring in ~ $2300/mo in rent from one unit. A 30-year 6.5% fixed mortgage with 20% ($154,000) would cost $3900/mo with taxes and insurance included. After the income from the rental side, you are still left with a $1600/month bill. A big unknown is how much insurance will increase in future years. Addressing the insurance crisis may be the single issue that decides the next governor of Florida.
Sure, you can buy a nice house out-of-town with a pool and cage in a development with a club. But, then you are not downtown, which is the point of this website. There are huge developments 30 minutes inland called “Ranches” (Lakewood and Palmer) that have man-made lakes and municipal areas. You have to drive to the 20-20 minutes to the beach and the two or three restaurants in such a development pale in comparison to the over 240 restaurants you can walk to in downtown Sarasota.
Condominiums
Of course there are more condos than houses for sale downtown. But an 01/04/25 Zillow search found just 24 condos under a $800k within a 2000 feet (an easy .35 mile walk) of the downtown center. One, a small (875sf) 2/1 is eliminated as both bedrooms are on the second floor. The remaining 23 condos start at $430k. Ten are one-bed or studio units. There were two two-bedroom units for ~$499k, but the rest (11 two-bed units) start at $625,000. Almost all have a “Major” Zillow flood risk score of 6/10 and underground parking (not good) with mandatory evacuation zone ratings of A or B – likely to be called to evacuate in a bad storm. You need to shop for more than just a good price.
One Bedroom Condos
The average asking price of the available ten one-bedroom units was $545k. To buy a nice, downtown 1/1 with a patio that you will need to spend at least $475,000. HOA fees typically range from $700 to $1100. At $475k with an excellent credit score, a 30-year fixed 6.6% mortgage and 20% down ($95k), figure taxes at $270, home insur. $165, HOA of $950 and you’ll pay $2,425/month with utilities. This is only about $200 less than renting in one of the large rental buildings.
Two Bedrooms Condos
The average asking price of the 14 two-bedroom units was $658k. A nice 2/2 should run around $550k to $625k, so budget $575,000. HOA fees ranges from $950 – $1,650, with $1200 being typical. At $575k, 6.6% financing and 20% down ($115k), taxes at $330, home insur. $200 and HOA of $1200 you’ll pay $2,900/month before utilities. This is about $250 less than a two-bedroom apartment in one of the large rental buildings would cost.
Clearly, two-bedroom units go for a premium so buying a large one-bedroom with a den area and installing a Murphy bed makes sense. Even so, you’ll not be saving much over a rental which has less risk of exposure to rising insurance, or having underground parking (a flood risk) which is more common in condo buildings than it is in rental buildings which tend to have garage or surface parking lots. And, the property’s value won’t appreciate enough to stay even with inflation.
Summary and Advice
Don’t buy property in Sarasota hoping it will appreciate in value or make money as a rental. Based on our primary condo, discussed below, the cost vs. rental income ratio would barely beat inflation, and with our goal of 5% ROI we would have lost
money in 2021 and 2022, and only made 1.6% in 2023 and 2.3% in 2024 after inflation. You can make money if you buy a larger multi-unit living complex, but forget about finding a compound of
Chart from USinflactioncalculator.com
charming cottages. Everyone wants that and prices are high.Inherit it if you can, and good luck with that. Or, read below for what to consider when to buy.
Rental – Year Round or Seasonal?
Don’t rent year round if you won’t be here or using the condo for at least eight months of the year; it will cost you at least $2500/month ($31,000/year) plus utilities in a big managed building, or $24,000 in someone’s backyard cottage.
In comparison, seasonal rentals make sense, even at $4000–$6000/mo, for 1–4 month stays, so the maximum cost could be $24,000 and taxes of 13% could kick that up to $27,000. Use FurnishedFinder.com or the many vacation rental websites to shop and compare. Realize that the furnishings are provided, which is value added. If you live here full-time, renting is about the same cost as buying, and homes are not a great investment just now with a projected 1% increase in value this year.
Should you Buy?
If you love Sarasota and come often for multiple weeks/months and want access from December through May, consider buying. Do it because you love the place, not as a financial investment. An advantage is it may be possible to make Florida your year-round residence saving on taxes at home, but you need to be serious about moving here as described above.
The best deals are on one-bedroom units. Look for a large one-bedroom for ≤$450,000 with ~900sf with a den or alcove for a Murphy bed and with outdoor space. Or, a two-bedroom for ≤$550,000 with 1.5 or 2 bathrooms, which adds value.
So now that you know what to look for, set your real restate search engine to notify you daily of multi-family homes under $900,000 and one-bedroom and two-bedroom condos at or under $500,000 and $600,000, respectively as they come on the market.
HOA Fees
Be sensitive to HOA and other expenses. At 6.6% over 30 years you can borrow $16,000 for every $100/mo you save. Paying $900/mo rather than $1300/mo in HOA fees lets you mortgage a condo that is $64,000 more. Over a 15-year mortgage saving $400/mo in HOA fees buys $46,000 more mortgage.
Rental – Year Round or Seasonal?
Don’t rent year round if you won’t be here or using the condo for at least eight months of the year; it will cost you at least $2500/month ($31,000/year) plus utilities in a big managed building, or $24,000 in someone’s backyard cottage.
In comparison, seasonal rentals make sense, even at $4000–$6000/mo, for 1–4 month stays, so the maximum cost could be $24,000 and taxes of 13% could kick that up to $27,000. Use FurnishedFinder.com or the many vacation rental websites to shop and compare. Realize that the furnishings are provided, which is value added. If you live here full-time, renting is about the same cost as buying, and homes are not a great investment just now with a projected 1% increase in value this year.
Should you Buy?
If you love Sarasota and come often for multiple weeks/months and want access from December through May, consider buying. Do it because you love the place, not as a financial investment. An advantage is it may be possible to make Florida your year-round residence saving on taxes at home, but you need to be serious about moving here as described above.
The best deals are on one-bedroom units. Look for a large one-bedroom for ≤$450,000 with ~900sf with a den or alcove for a Murphy bed and with outdoor space. Or, a two-bedroom for ≤$550,000 with 1.5 or 2 bathrooms, which adds value.
So now that you know what to look for, set your real restate search engine to notify you daily of multi-family homes under $900,000 and one-bedroom and two-bedroom condos at or under $500,000 and $600,000, respectively as they come on the market.
HOA Fees
Be sensitive to HOA and other expenses. At 6.6% over 30 years you can borrow $16,000 for every $100/mo you save. Paying $900/mo rather than $1300/mo in HOA fees lets you mortgage a condo that is $64,000 more. Over a 15-year mortgage saving $400/mo in HOA fees buys $46,000 more mortgage.
For example, a 2/1 967sf unit currently for sale in the building pictured above will likely sell for about $755,000, but its low HOA of $575 makes it equivalent to buying a condo $120,000 more expensive with a typical $1300 HOA. So compare this condo to others you might buy for $635,000. I’d rather buy more condo with lower HOA fees.
What We Did
The calculus is different for everyone, but we were not retiring full-time to Sarasota so spending more than $600,000 was not in the cards. In fact, we did not want to spend more than $400,000.
We looked at duplex and triplex units with an eye to renting one side – but most were 1/1 on each side units and in less than ideal, not to mention having such a close, unknown neighbor.
It took three years, but Mentone Court popped up on Zillow. It was an 11-minute walk from the center of downtown. The asking price was $370k for a first floor 2/2 with a good size screened patio. A covered ground level parking spot could be
negotiated into that price, which is essential if you leave a car in FL year round. So we bought it, see the details and cost analysis in the next section.
Summary
Given the hurricanes and fear of insurance hikes (or abandonment) Sarasota real estate is expected to increase just 1% this year, and those problems aren’t going away. Buying and flipping homes is no longer ideal, nor is hanging on to them hoping their their value appreciates. Sarasoto is still growing and highly desirable, and you won’t lose money over time, but you won’t make much either. Buy if you can enjoy it in some way. Or buy if you find “cheap” property anywhere in the downtown area.
Of course “cheap” is relative when you spend at least $350,000 and more like $450,000. Buy only if you regularly come to the city to enjoy it. You won’t make money, but you can minimize the cost by shopping wisely. Note that while high demand drove up home prices – it also caused wild growth in restaurants which compete driving down costs for food, drink and entertainment. The result: Happy Hours everywhere!
So this was the logic we employed to find an affordable, downtown condo in Sarasota for our personal seasonal use and another condo to help pay for it. For details about how we found Mentone Court and its costs, see the next section on The Search.
