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Old 12-13-2014, 08:15 AM
 
Location: In a daze
244 posts, read 218,802 times
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My wife and I are both retired. We rented a home in Sarasota last winter for two months and enjoyed our time there. We are snowbirding again this winter for two months.

Your opinions, please, on the following:

We would like to purchase a condo, anywhere between North Sarasota and Bonita Beach. I know that is a large area, but we definitely want to be in SWFL. I would like to spend between $150-200K, with the condo fees, taxes, utilities, ins, etc., to amount to less than $8-9K, since this is what it now costs us to rent for two months. Plus, we could come down as often as we like, and also experience the summer heat and humidity first hand for a month or two. The condo would need to be <10 miles to the beach, and have a pool, fitness center, and other activities. Golf is not a big deal for us. The cost of the condo would come out of our nest egg, but would not adversely affect our bottom line. At this point, we have no desire to rent it out, but that could be an option.


My thought is to keep the condo for 3-5 years and make sure that we like the area, weather, etc. Assuming we do, then find a SFH, sell the condo, sell our home, and purchase a home permanently. If we find we don't like it, for whatever reason, sell the condo (hopefully, not at a loss), and walk away with having had the experience.

Opinions, please, especially from folks who have tried this. TIA, Cuzzant
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Old 12-13-2014, 08:32 AM
 
Location: Florida -
8,763 posts, read 10,837,755 times
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That's exactly what many folks do in Florida ... Although, more than you might imagine, find that they enjoy condo living and either keep their home and the condo or sell their home and keep the condo. I know of several people in our existing condo who have done just that.

One thing you might want to think about is spending a little more for a prime location (ie; beachfront or ??) - or exactly where you might consider a permanent location. That will increase your enjoyment, further preserve your value and profit, plus, give you the potential of a long-term home. (Otherwise, you will capture the gain on a $150-$200K condo, but, turn-around in the same market and buy a then $650K SFH (now $400K) that has proportionately increased $150K more than your condo).

$8-$9K is about right for HOA fees in that area, but, watch-out for condos with high renter turnover. The fees and maintenance/upkeep costs in condos with a high renter occupancy will increase at a much faster rate, while the values will increase at a slower rate.
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Old 12-14-2014, 06:46 AM
 
Location: In a daze
244 posts, read 218,802 times
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jgh, thanks for your reply

Quote:
Originally Posted by jghorton View Post
That's exactly what many folks do in Florida ... Although, more than you might imagine, find that they enjoy condo living and either keep their home and the condo or sell their home and keep the condo. I know of several people in our existing condo who have done just that.
Continuing to live in a condo is a very real possibility; maintaining two places 1300 miles apart for more than 3-5 years does not seem appealing, but who knows.

One thing you might want to think about is spending a little more for a prime location (ie; beachfront or ??) - or exactly where you might consider a permanent location. That will increase your enjoyment, further preserve your value and profit, plus, give you the potential of a long-term home. (Otherwise, you will capture the gain on a $150-$200K condo, but, turn-around in the same market and buy a then $650K SFH (now $400K) that has proportionately increased $150K more than your condo).
True, but anything purchased now over $250K would affect our projected income numbers after 3-5 years.

$8-$9K is about right for HOA fees in that area, but, watch-out for condos with high renter turnover. The fees and maintenance/upkeep costs in condos with a high renter occupancy will increase at a much faster rate, while the values will increase at a slower rate.
Good to know, but what's the reason for that?
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Old 12-14-2014, 07:47 AM
 
3,714 posts, read 3,120,389 times
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Quote:
Originally Posted by jghorton View Post
The fees and maintenance/upkeep costs in condos with a high renter occupancy will increase at a much faster rate, while the values will increase at a slower rate.
With many years experience in owning, selling, renting and managing condos on the East Coast of Florida I have not found this to be true. I can point out several examples where exactly the opposite is true.

Your other points are spot on.
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Old 12-14-2014, 10:44 AM
 
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The effect of renter prevalence on valuation depends on upkeep imo. I also think it depends what end of the market you're dealing with too. And are we talking about resident renters or seasonal/vacation renters? Different groups of people behave differently.
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Old 12-15-2014, 08:16 AM
 
Location: Florida -
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Quote:
Originally Posted by 1insider View Post
With many years experience in owning, selling, renting and managing condos on the East Coast of Florida I have not found this to be true. I can point out several examples where exactly the opposite is true.

Your other points are spot on.
We now live in Destin and I can assure you that HOA fees in Condos with a high rental turnover average about 30-40% higher than those with a longer-term rental requirement (6-months) --- You may have a point on the price decrease, since there are a large number of investor-owners who drive-up prices ... but, for people who actually want to live here in a Condo, there is not much interest in the many condo-hotels.

When we lived on the ocean (Fl. East Coast), high rental turnover was not as much of an issue as in Destin, but, Condos still had to charge more in HOA fees in order to pay for the added maintenance and upkeep (I was President and on the board of a few Condos that recognized and were forced to deal with this).
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Old 12-15-2014, 02:24 PM
 
3,714 posts, read 3,120,389 times
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Quote:
Originally Posted by jghorton View Post
We now live in Destin and I can assure you that HOA fees in Condos with a high rental turnover average about 30-40% higher than those with a longer-term rental requirement (6-months) --- You may have a point on the price decrease, since there are a large number of investor-owners who drive-up prices ... but, for people who actually want to live here in a Condo, there is not much interest in the many condo-hotels.

When we lived on the ocean (Fl. East Coast), high rental turnover was not as much of an issue as in Destin, but, Condos still had to charge more in HOA fees in order to pay for the added maintenance and upkeep (I was President and on the board of a few Condos that recognized and were forced to deal with this).
I think you and I are doppelgängers. I lived in Destin and Santa Rosa Beach years ago and came to the Central East Coast and you did the opposite.

We have less than twenty oceanfront vacation rental (weekly or less) complexes from Indialantic to Cape Canaveral, unlike the Panhandle where weekly rentals are much more common. I am very familiar with every one of them and not one has higher than normal condo fees. What exactly are you talking about with the 30 to 40% higher fees? I just don't see it here.
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Old 12-15-2014, 04:04 PM
 
Location: In a daze
244 posts, read 218,802 times
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But getting back to the OP's question................
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Old 12-16-2014, 04:47 AM
 
3,714 posts, read 3,120,389 times
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Quote:
Originally Posted by Cuzzant View Post
But getting back to the OP's question................
Sorry, it was kind of relevant to your question about whether to buy a condo. I didn't want you to reject all condos with lots of renters thinking that their fees were much higher. You did mention that renting it out could be an option. If renting is a serious consideration then be aware that condos have different rental restrictions. Choose one that best fits your scenario.

On the broad question of whether to buy a condo now; I think it's a good idea to have exposure in a rising market if planning a purchase in the same market later. Appreciation hedge, if you will.
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