03/07/2012 - CONDO CORNER
Right now there are a lot of apparent bargains in condominiums in Bradenton, Sarasota, Tampa Bay and throughout Florida. Foreclosures, short sales, distressed sales, liquidations and close outs. And there are some deals available. But in addition to the fundamentals of value, like location, quality of construction, attractive units and nice amenities, there are some other factors that a buyer needs to investigate in this market, all of which can affect the value and cost of ownership. These include:
∑ Number of units still owned by developer.
∑ Number of units bank owned.
∑ Number of units investor owned.
∑ Number of units leased out.
∑ Number of units in foreclosure.
∑ Number of units in default under mortgages.
∑ Number of units delinquent in paying condo fees.
Usually the better values are in condos where most units are owner occupied, with no more than 20% leased, and minimal numbers of units delinquent in paying fees or bank owned or in foreclosure. The cost of maintaining the condo is the same, no matter how many units are paying. So as owners stop paying, and they do once they stop paying their mortgages, the condominium association has to do one of two things. Reduce maintenance or raise fees. Neither is good. Large number of units leased make the condo more like an apartment, and investors or banks donít have the same agenda as an owner who lives in the unit. Before you buy, check out these things and factor them into your decision to buy and the amount you offer.