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Old 08-26-2011, 10:30 PM
 
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I visit the Tampa area six to eight times per year for three to five days at a time. Given the financial climate, I've been toying with the idea of buying a condo that I can rent out during the high season and then use as my vacation home throughout the rest of the year. I'm not looking to make money, but I don't want to lose a lot and more importantly I don't want a lot of hassle dealing with property issues. Is there anyone on the forum who lives out of state, owns a condo, and rents it out for part of the year? I'd really appreciate thoughts on dealing with rental property, management agencies, etc.

Thanks!
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Old 08-27-2011, 09:01 AM
 
Location: Tampa, FL
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Home owner assoc fees, CDD, utilities, h20, cable fees, real estate insurance, flood insurance, sink hole insurance, real estate taxes.......is it really worth it?
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Old 08-27-2011, 02:28 PM
 
16 posts, read 75,192 times
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Quote:
Originally Posted by BucFan View Post
Home owner assoc fees, CDD, utilities, h20, cable fees, real estate insurance, flood insurance, sink hole insurance, real estate taxes.......is it really worth it?
That would depend on the bottom line expense. If I rent the condo for 4 months out of the year, how much of total annual costs can I expect to recoup? I know there is no simple answer, but I'd like to hear from anyone who has done something similar.
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Old 08-27-2011, 06:32 PM
 
Location: it depends
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Quote:
Originally Posted by LivingonLI View Post
That would depend on the bottom line expense. If I rent the condo for 4 months out of the year, how much of total annual costs can I expect to recoup? I know there is no simple answer, but I'd like to hear from anyone who has done something similar.
I believe more people buy destination-area condos and expect to make money than actually have it work out. Here's what I can tell you:

A unit similar to the 2 BR condo we bought two years ago could be purchased for about 100k today. This is in a financially stable 400 unit development, initial phase built 40 years, on the water in a desirable location, Pinellas county. We use ours during the winter and don't want to rent it, but the unit next door is rented to one couple for the Dec-Mar four month stretch for $1800/mo or $6,400 total. The tenant has no interest in owning, loves the place.

Here's the issue: between $290 monthy HOA fees, utilities, mortgage payment (conventional 80% financing is available), insurance, phone/internet/cable, the place costs $1100-$1200 month to carry, or say $14,000 per year. So if we wanted to have a place we could go to anytime from April through November, it would have been $20k down payment PLUS more than $7,000 per year in net carrying costs after the rental income. I gotta tell you, you can take a lot of nice trips on a lump sum of $20k plus $7,000 per year.

It made huge sense for us to buy and NOT rent, because I can work anywhere I want to, three weeks out of four--and by owning, we actually make the trips and use the place. No wondering about whether a renter left a calling card somewhere, or anything like that. We can jump on a plane and not even bring toothbrushes. If we knew we could rent anytime, but would have to locate a place and take steps to assure reliable secure internet (business requirement for me), we would not spend as much time in FLA as we do. And with our own place, we have been able to schedule visists from our siblings in other states and spend some quality time with them that otherwise would not happen. We recognize that the whole cost of carry is probably a consumption expense, not an investment, although hopefully there would be something at the end if we chose to sell. But that mindset has served us well, as we bought at a tremendous bargain price, then watched prices decline another 15%. We don't care! We would not trade the time we have already spent there for any amount of money. And in fact, seven or twenty years down the road, I kind of expect that the deal will have worked out fine. But it does not have to, in order to make sense for us. Another factor is that at our "northern" place, we are underinvested in housing (relative to income) and looking to downsize further. Owning two smaller places instead of one grand homestead is way better for us.

Hope that helps, it is just one look at it, maybe somebody else has a better angle on it.

Last edited by marcopolo; 08-27-2011 at 07:55 PM..
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Old 08-27-2011, 06:44 PM
 
Location: tampa bay
6,689 posts, read 7,215,937 times
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My friend closes on condo a in mid-september in clearwater beach (waters edge). She lives in CA and visits Florida every 2-3 months.It was a great deal and she can rent it out easily when she is not here.I think waterfront/view properties have some great deals out there right now and if the numbers work...carrying costs vs rental income I would do it!
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Old 08-27-2011, 07:03 PM
 
1,106 posts, read 2,033,590 times
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I would look at your potential condo docs VERY closely if this is your plan. Most communities do not allow short-term rentals, and many require you to submit a copy of your lease to add non-owner names to the access list.

The last thing you want to do is find out after your purchase that your cunning plan won't work.

The topic was covered in this post:

//www.city-data.com/forum/tampa...ampa-area.html

I cannot think of many scenarios where this plan is a better deal than, say, getting a 4* hotel through Priceline or renting a condo from someone else.

The only case I can think of where it would work financially would be if you purchased a Florida property, changed your residency from a high-tax state to Florida, claimed it as a homestead, and then periodically rented the unit out. This may run afoul of local (sales tax), state (income tax) and/or Federal (rental income) laws, so you need to do your own research.
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Old 08-27-2011, 08:45 PM
 
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I guess the question in my mind is what do you do with the condo in a few years from now? Do you keep it and rent it out forever? What about when you retire? Do you move here? Do you stay all winter? If it was me, I would try to have a clear understanding of my exit strategy first before buying.
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Old 08-28-2011, 09:08 AM
 
15,759 posts, read 32,822,908 times
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Quote:
Originally Posted by tom11011 View Post
I guess the question in my mind is what do you do with the condo in a few years from now? Do you keep it and rent it out forever? What about when you retire? Do you move here? Do you stay all winter? If it was me, I would try to have a clear understanding of my exit strategy first before buying.
This is GREAT advice. I have found out first hand that real estate is relatively easy to get into, but can be difficult-to-impossible to get out of. I would think long and hard about buying something you (OP) would use only sporadically and then "rent out". Many condos won't allow short term rentals, and even if they do there is no guarantee the renters won't trash it or run up your bills. The IDEA of it is a whole lot better than the reality, let me tell you. And you may find you won't really use it as much as you thought. Then the place becomes a millstone around your neck, and who knows how long it will take to sell.

I agree with marcopolo, you can take a lot of nice trips on the amount you will be spending on carrying costs.
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Old 08-28-2011, 09:17 AM
 
Location: tampa bay
6,689 posts, read 7,215,937 times
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If you rent out a high end unit,you would need to get a top management company to screen and manage your tenants (no spring breakers etc.).There always risks when you have renters but you can take steps to reduce your risk.Of course check out the buildings leasing policy but with the downturn in real estate many buildings have become more flexible!
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Old 08-31-2011, 08:37 PM
 
Location: Beautiful Pinellas County
1,430 posts, read 2,632,729 times
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One other thing, many lenders wont give mortgages on condos that are generally in developments that are not mostly owner occupied. Most owner occupied condos you cant rent out short term.
It is not impossible, but its not so easy nowadays to get those investor loans on condos. Houses are easier. But renting those can be tricky to short term tenants. If you want to buy a beach condo to rent out seasonally and can get the financing done, or are paying cash, there are agents who will look after it for you for a commission. It would at least cover some of your running costs, but is not going to finance a purchase. Beach is def the best, water view premium, as these will offer a decent return - one day (that could be a long way off however)
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