If people think owning a condo is expensive, think again. According to a condominium specialist realtor, a good benchmark for operating costs or “housing fees” should be 30 cents a month per square foot of private property.
So where does those fees go to? The landowner’s pockets? No, they go to a lot of things: building maintenance, landscaping, waste removal, legal fees incurred by a condo board—in short it’s for the betterment of the condo and its owners.
Investing in a condominium has all the negatives of real estate investing. The investment is illiquid, that is, there is not always a market for the assets and in the long run, it may be difficult to sell. It has the negatives similar to hotel business, as rents, occupancy and salary rates are all focus to market conditions. The title holder has one vote in the association per unit, and is effected to the views and voting privileges of the other members. Property developments are not done on the owners timetable, but on the schedule of the association. Appraisals can be ordered by a majority of other owners.
When buying or purchasing a condo unit, it is advisable to own one either within the business area or near tourist destinations. So, if you plan to lease or rent the condo units in the near future, it would be saleable. Units that are located in resort or tourist areas are given high priority because of the demand. If the aim of the purchaser is to just enjoy the personal use of the unit, the cost is alike to owning a condominium in these areas. The added advantage is that when the unit is not used by the owner or other members of the family, it can be sited in the rental pool.
The current development in real estate investing is the hotel condominium idea, known also as CondoHotels or Condotels. The essential concept is that a shareholder owns a specific condominium unit in a huge building or development, which can be later used by the owner, or rented to unrelated parties on a short term basis, as part of a hotel. The person who is renting the space may have no idea that the unit is owned by someone. The owners more often than not are part of an association which deals out the rental income. Expenses are by the way subtracted from the profits or collected as an appraisal.
Before you begin condo shopping, discover precisely what are the maintenance fees. Don’t walk yet into an open house sooner than you know how much is the cost that you need to shell out for the association dues every month. You also need to know what are those fees covered. Every condo unit has a monthly report so make sure that it is given on a monthly basis. Also, read all the condo documents before you decide to purchase one. The condo documents will tell you if there are any age limitations on tenants. They also cover rules about the amenities and the facilities. |
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