How To Help Decide When Purchasing A Condo

Dated: December 9 2016

Views: 428

We are entering that season again when Condo buying is beginning to heat up along our Gulf Beaches.

Whether you're considering the purchase of a condo for a permanent residence, part time/vacation home, or for a real estate investment, there are some important things to consider when making comparisons and before making that final decision. 

One of the top questions is "Where I should purchase my Condo?" Click the link below to browse Condos currently on the market.

Now that you have decided on the where what else do you need to do?:

  • Compare Amenities

Community amenities are important for enhancement and enjoyment of your chosen lifestyle. When purchasing your condo be sure to compare what different communities are offering in the way of amenities like:  clubhouse, restaurants, pool / spa, exercise room. Community amenities will go a long way in enhancing your family's satisfaction and long term happiness. In addition, factor in the amenities when comparing the association fees.

  • Don't Bypass Reading the Condo Docs

Condominiums are governed by a Condo or Homeowner's Association. An association will, in most cases, require that residents and homeowners be bound to obey with legal, recorded documents that convey to residents how the property, as well as the common areas in the community, can be used, and what the residents' legal responsibilities are to the association.

When you go under contract on a Condominium, they will provide you with the following; the full recorded Documents, the By-Laws, Rules and Regulations, Frequently Asked Questions and the Financials.  Once you have recieved these douments you have 3 Days to review the documents. If, during those 3 days you come across something in the documents that you do not like, you are within your rights of the contract to cancel without penalty.

 It is critical that you exercise your right to scrutinize these documents before being bound by contract to purchase your condominium. Don't take shortcuts here! Take the necessary time to read through them.
This step is even more important to part time residents or investors. Important issues like: pets, guests, vehicle restrictions, rental restrictions, and more must be understood in order to make a good decision about your purchase.

  • Financing for Condos

It is recommended when purchasing a Condo along the Gulf Beaches that you put a minimum of 25% down. At that percentage, Mortgage Lenders do what is called a "Limited Doc Review". There is a questionnaire that that the Lenders give to the Condo Association to answer, it can be upwards of 20-25 questions depending on your Lender. A question they may ask the ratio of owners vs renters, which along the Gulf Beaches, it is common for Condos to have a high ratio of units as rentals. A  Mortgage Lender may decline to provide financing for condos with a high ratio of owners vs renters, or they may elect to do the financing but charge the buyer a higher than average interest rate.

When you put down 25%, the questions shrink from 20 to two. There are less questions to cause a hitch in your loan, the process will be much smoother!  The goal is to get you living the beach life!

We can recommend a few different mortgage companies for you to speak with. Charlie Widmeier with VanDyk Mortgage (727-686-5323 and Rachel Saylor with Movement Mortgage (727-914-7878) are both great to work with. They are familiar with the Condo buying process in Florida and know what needs to be done to make it a smooth and easy transaction!


  • Find Out About Past, Present, and Proposed Special Assessments

Ideally, Condos maintain their properties and plan for future maintenance, like re-roofing and painting the outside of the Condos. A question we ask (and we look in the financial documents for proposed maintenance) is to see if there has been any major issues with maintenance that they are planning to do for the coming year? When you receive the Condo Documents, you will receive a copy of the association's current and projected budget so you can find out if those expenses will be covered or if a special assessment will be levied. The way that an association plans for its financial future is a sign of how well it is being managed. Look to the past to predict how things might be managed in the future.

  • Compare Association Fees

If you're comparing two properties for purchase, compare the fees for each communities' association. Don't limit yourself to looking at just the monthly cost. Instead, compare the fees by looking at what they will be used for and by what they cover: ground and building maintenance, building insurance, escrow reserves fund, flood insurance, pest control, roof, utilities like cable and water, and condominium management, just to name a few. The Condo fee's can vary from Gulf front units to Intracoastal condos, the wear and tear of a building on the Gulf differs from one on the Intracoastal

  • Decide If You Want This Property To Net You A Return

Condos along the Gulf Beaches typically have rental restrictions set forth by the Condo Associations. They are typically, 1-7days, 1 week, 2 weeks, 1 month, 3 month, 6 months or 1 year. If you are looking for a 2nd home that you plan on not renting or may rent out occasionally, then the 1 month or 3 month rentals would be for you. These properties will typically rent January- April, sometimes as early as October. They are more challenging to rent out the rest of the year. S

1-7 day rentals and 1 week rentals are the properties that can net you a 3-6% (sometimes higher) return on your investment depending on the Property Management Company that you use. Depending on where your Condo is located and how aggressive your Property Manager is, you can net from $20,000 a year up to $60,000 a year, in some cases, even more.

There are some Condos that are Condo-Hotels, sometimes known as "Condo-Tels" or "Condo Resorts". These are typically harder to finance (we can help find someone for you!) and 80% of the time have stricter rules to owner usage. Typically the owner is allowed to use the property for their own personal use 21-28 days of the year. Keep in mind, these are investment properties, they are set up to earn money!!!  What is great about these properties, you do not have to do anything but deposit your check once a month!

If you have any questions on the process, do not hesitate to call! We are here to help!

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