An investment condo has one drawback: they can be more difficult to finance. To finance your purchase, you may need to get a loan with a lower down payment.
Lenders typically require a 20% to 25% down payment when purchasing investment property, including condominiums. While some lenders require that the investor live in the condo for at least one year before renting it out, this is not always true with all lenders. There may be a higher down payment if you don’t live in your property. However, this is why I recommend looking around for the best loan.
Lenders are cautious about litigation.
Lenders will only lend money to property they approve. Lenders may not approve loans if the condominium association is in litigation or under investigation. This could lead to a lawsuit by a condo owner, or other types of litigation.
Is it a wise investment to buy an oceanfront condo?
A condo on the oceanfront is a great investment as it will appreciate over time. A waterfront condo, oceanfront property or beachfront condo will always be more advantageous for vacation rentals, short-term rentals, second homes, and other types of rentals. It’s more likely that you can rent it out during high season and then enjoy it for many years with its constant appreciation in value.
Understanding reserve funds and association fees
One tip I can give is to look into the reserve funds and the fees. All homeowners and renters will be subject to the rules and restrictions of condo associations. You may have to follow certain rules regarding how many units you can rent out. You may have restrictions about who can rent the property and pets. There might also be restrictions regarding the rights of renters over the owners. To ensure that your investment is financially sound, you should include the association fees in your monthly rental payments.
Always check the Association’s reserves. Condo owners who have their reserves dwindling or barely holding on to their units will be subject to a special assessment. This would include a request for extra funds to pay the association fees each month. You won’t have to pay any extra fees if the association has enough reserves.
There is no set rule for investing in condominiums. Each condo association, building and complex is unique, as are every investor, renter and budget. It is about finding the right location and the right property for you, your future financial goals and budget. You also need to consider whether or not the property will be used. You’ll be more informed when you consider all these factors and make an informed decision about Florida condo investment. Contact me below if you have any questions.
This post was written by Dayana Susterman Dotoli. Dayana is the head real estate agent for the Tiffany House In Ft. Lauderdale Beach. Dayana has assisted over 150 individuals with buying, selling, and leasing at Tiffany House. The Tiffany House Residences is a 12 story tower, offers 129 residences, including 1, 2 and 3-bedroom condominiums and townhomes, with exclusive, resort-style amenities and views of the Intracoastal Waterway and the Atlantic Ocean.
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