condos (Orlando: renters, HOA fees, insurance)

[bernib]

Hi everyone, I was wondering if anyone had bought a condo near to disney with tenants ,how are they finding ,is rents covering Hoa fees and taxes,is there plenty of tenants to rent.Thanks for any advice.

[nb1968]

No I havent,
BUT
Unless it is a forclosure at a tremendous price, you will not cover your costs.
I have actually run the numbers on some condos, and even if the condo was FREE, you still would lose money with the property taxes AND outrageous monthly association dues.
The condos I have noticed in the touristy areas have ridiculous monthly dues-some $ 300 to $ 500. Add another $200/mo for property taxes and figure something for insurance, . . . and you tell me where your profit is
I dont think you can make a monthly profit on a condo (short term), . . . AND I dont think you will see any appreciation for a VERY LONG time. (long term)
My advice is if you want a condo to live in and you love it, . . . buy it. But NOT for an investment.

[cfIfan]

The best piece of advice i can give and i have stated this all over these boards, is if you cant afford all the bills and mortgage without renting it out do not buy.

There are good property management companies out there but they are in a minority in a sea of bad ones. You have to invest in good advertising and there are people out there and i do know them who are breaking even on their properties. The majority rent them out themselves. However, particularly in the short term market there are no guarantees you will rent the property out and certainly not for 365 days of the year.

There are great deals out there to be had for purchasing, but if you are going to be relying on renting out the property to pay all the bills i wouldnt even consider it.

[bernib]

Hi thanks for the advice,I have been in contact with agents who are trying to sell condos with long term tenants already in place.I've been offered loads of different condos across Orlando and hope to get out for a look in a month or so.

[AONE]

I think one does far better in long term rentals than the short. When you figure most of the mgmt companies charge 50-60% and often have up front fees you can easily be upside down from your closing date on. Short term is a very competative market and if worked correctly can be very profitable. For the most part few make money at it and most are lucky if they are within 10% of covering expenses... the majority don't come close.

With a long term rental you have a lower monthly revenue, but much lower expenses and a fully occupied month. When I manage the long terms I charge 10% which is pretty normal. the goal is always to minimize expenses and maximize return.

There are many condos and homes that offer the ability to be positive when it comes to cash flow. I have several clients having great success with this market. Some are flippers, some renters and so far they are making money so its a good thing.

Often the condo fees include the insurance so that is a question to ask, it makes large difference in the monthly expenses. as a landlord you won't be insuring contents just structure. Some of those large monthly fees can be explained by the insurance , water and cable they often provide. Some are just out of line because of the high vacancy rates... those are problematic.... Look at MetroWest for great examples.

[annerk]

And keep in mind that the fire/all peril insurance provided under the HOA policy often does not cover anything from the studs out--flooring, cabinets, fixtures, etc.

It also never covers the landlords liability, and you betcha you'll be sued if your tenants friends kid slips and falls and breaks his neck. Bottom line, make sure you've got the right insurance.

[wigs11111]

The HOA dues are the problem. I live 2 miles north of Universal Studios, HOA fee is $422/month. Thank goodness I rent, the owner is so underwater, losing hundreds per month, in the red.