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Before You Buy a Condo

Buying a condo in South Florida? Consider these points – make an informed decision, and avoid a costly mistake!

For decades, South Florida has been a second home for people not only from all over the United States, but worldwide. Whether it is a second home for snowbirds, a vacation getaway spot, or an investment property for non-Floridians, there is much to know when buying a property in South Florida, and if you are not from here, much of this may come as a surprise.

Having come from Europe myself, I am used to the idea that the home you buy is yours to manage as you wish, subject to some city ordinances and common sense. Well, apparently, Florida has seen some abuse in terms of renting, prompting condo associations to implement rules that will greatly impact your freewill when it comes to your real estate. Let’s of course start by saying that those rules are not to fall on you out of nowhere, but, instead, they are the rules that associations make you sign when joining their community. While some of us read the “fine print” with more scrutiny with others, I think it is worth our while to discuss a few points of some of the HOA (Home Owners’ Association) rules and regulations for those interested in buying a home in South Florida.

Option to rent.

You may not be able to rent out your condo… for a year, two… or ever.  It’s all great when things go as planned in life, but life happens - the need to re-locate, get a bigger place, downsize, or anything else that you may not foresee at the time. It’s great if you can afford to keep your condo for your eventual use or occasional guests (in compliance with a whole other set of rules pertaining to guest policy and restrictions), but if you don’t have such luxury – having to go on with paying your HOA dues, property taxes and mortgage (if applicable), puts you in quite a predicament. Selling would, of course, be an option, but you may need to compromise on the value of your condo or on time that it will take to find the right buyer, the one willing to commit. Remember, the real estate market in South Florida and the market prices for properties, are very much influenced by investment capital, corporate and personal, and that is a big share of prospective buyers that will not consider your property if it cannot be rented. On the bright side, condos like that are of type “where everybody knows your name.” There is also a possibility that banks may give mortgages on those condos with a smaller down payment, as percentage of full owner occupancy and HOA reserves play a role in lending considerations   (no representation of facts or laws made here, as we are not mortgage brokers, but it may be worth to speak to one about this)

Okay, now let’s say the HOA allows rentals, in which case we need to find out whether you can rent out your condo right after purchase, or if there is a waiting period – a year of two years are standard in many buildings. It is important to point out here that if you have purchased your home as your primary residence, you may have signed a document to attest that you will reside in your new home, and you may have even received some benefit that was contingent on such owner occupancy, such as a lower down payment. Do not take this lightly, because you may have serious trouble with the law if you rent out the home that was to be your primary residence, without making it your primary residence for a promised amount of time, usually a year. If you are not bound by any law to make the newly purchased condo your primary residence, but the HOA rules impose a waiting period before renting, you may have to just keep the unit empty (if you don’t intend to occupy it) – that is something to consider when buying a condo as an investment. Perhaps that would be a good time to remodel.

Next in our agenda is a discussion about rental terms. It is important to note that many buildings have minimal lease terms of 1 year, some 2 years, some even 3. In my personal opinion, the 1 year minimum is optimal, because it may be more difficult to find a tenant willing to commit to 2 or three years, though some people prefer the stability of knowing that that won’t have to move next year.

Long term tenancy has its obvious advantages in managing the property, and gives you some sort of security in knowing that your building (whether you choose to live there or rent out long term) will not be flooded with tourists in the high season, spring break kids going crazy, and Airbnb guests going in and out of the building constantly. As many of us have seen, tourists normally have less regard for keeping it down at night and following the rules in general – after all, it’s vacation, and we’ve all been there.

If you plan to be a snowbird in South Florida, but wouldn’t mind renting your condo out for a few months while you are not here, a good balance would be to buy a condo that allows 3 or 6 months leases – that’s of course if you don’t mind sharing your furniture and some other household items with tenants while you are away. A little compromise on personal space and privacy, but, on the other hand, that can take care of those HOA dues, maybe even for the entire year. Just food for thought…

Having a knowledgeable real estate agent can make all the difference, so if you are thinking of buying in Sunny Isles, Aventura, Miami Beach, Hallandale Beach, Hollywood, and surrounding areas – give us a call, we are always happy to help! Check out our comprehensive search that lets you get very specific with search criteria – you can even search by keywords. 

Call to speak with Arthur or Iryna today

305 699-2450

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Contact

  • Realtors

    Arthur Rubinovich / Iryna (Iryana) Tsyrina
    Lokation Realty

  • TELEPHONE

    305-699-2450 Arthur: 305-409-6529 / Iryana: 305-509-0259

  • OUR LOCATION

    1900 N Bayshore Dr - Suite 120
    Miami, FL 33132

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