buying investment condo in Orlando??

[A Mickeyfan]

Also find out if you are going to be able to get homeowners/condo insurance. Some companies are pulling out of Fl. Some companies are not writing anymore. Some will not write if the structure is x-amount of years old. Don't think that everything is going to be covered in your condo maintance fees, they aren't. You will still need your own condo insurance. If you cannot get insurance on a place, don't bother with it. Since you are paying cash & not dealing with a mtg company, you will have to find this out for yourself up front.
Also, if you are getting a ground floor unit, don't forget flood insurance. Yes flood. Many forget flood because they think they don't need it. They turn out to be the ones who get flooded! Orlando does get floods and they do get hit with hurricanes. While they are not direct hits since they are in the middle of the state, they have gotten banged up pretty bad. Don't think it can't happen. Always be on the safer side, especially if you are not going to be the full time resident.

 

[magik]

I just want to second/third/fourth whatever the comment that many condos have very strict rules about rentals. The ones around me tend to have rules that condo owners can only rent out a condo if they have first lived in it so many years as their primary residence.

This could just be in my area, but the nicer the condominium complex, the stricter the rules about rentals because there is this idea, whether it's true or not, that renters don't care about the property, so people who do own and do live there don't want to be living next to renters.

 

[LauraR]

Also find out if you are going to be able to get homeowners/condo insurance. Some companies are pulling out of Fl. Some companies are not writing anymore. Some will not write if the structure is x-amount of years old. Don't think that everything is going to be covered in your condo maintance fees, they aren't. You will still need your own condo insurance. If you cannot get insurance on a place, don't bother with it. Since you are paying cash & not dealing with a mtg company, you will have to find this out for yourself up front.
Also, if you are getting a ground floor unit, don't forget flood insurance. Yes flood. Many forget flood because they think they don't need it. They turn out to be the ones who get flooded! Orlando does get floods and they do get hit with hurricanes. While they are not direct hits since they are in the middle of the state, they have gotten banged up pretty bad. Don't think it can't happen. Always be on the safer side, especially if you are not going to be the full time resident.

Good points to consider, I hadn't thought of those.
Thanks for your post, too, Magik.
I'm starting to get a long list of things to check into!

 

[Hoppy]

When considering buying property, decide what your primary goal for owning the property is. Just because something's selling cheaply now doesn't make it a great deal.

Will the property be part of your long term plan? Are you looking to flip? Are you trying to make a profit via rental income? If the latter is your goal, run away fast!

My husband and I own a vacation rental on the coast in another state. I do all the work myself with the help on my "absentee owner" property manager who does the cleaning between guests, etc. It is a full time job for me to market and advertise our home to guests. Last year I had the best year (with over 125 days booked). With association fees, property taxes, and insurance, I barely covered expenses. And, that's not including utilities.

Competition is fierce in the Orlando area. Do some research on vacancies. Check out some of the rental sites and look at similar properties you're wanting to buy. Are their calendars full? Empty?

Go in "eyes wide open" if the long term rental market is what you'll be trying to get into (my paying day job is property manager for an apartment building). Can you pay your bills if you don't have a tenant for one month? Two months? Six months? How is the job market in Orlando? Could you easily find a dependable tenant willing to pay your rent?

BEWARE of hidden costs. If your property is in a condo building or association, what will happen to your association fees if other owners go bankrupt? My hunch is your fees could double soon.

Property insurance, if you can find it, is not getting cheaper either. I look for my flood insurance to go up next (it will have almost doubled in six years...and this is govt. funded flood insurance).

If you can afford to be in the red every month and/or you can enjoy the property yourself a couple of times a year, then go for property. If your budget can't take the stress and strain of a money pit, do not buy property. You will never get rich on the rental income.

JM2¢

 

[mtquinn]

Wanted to add my two cents here. My husband has worked in the mortgage and bankruptcy industry for many years, and would not touch FLA with a ten foot pole. Market is so overly saturated, and...as another poster said very accurately, values won't appreciate for a very long time. By 'very long time', I'm talking well over 10-15 years at least. It's a VERY dangerous place to buy right now, unless you are pretty well-off and plan on sitting on it with no need for the rental income. I know very well-to-do people who owned many rentals in both NJ and FLA and sold them all years ago because it is such a sad market down there.

Yes, things are dirt cheap and a bargain for sure, but if you are depending at all on income to cover your expenses then don't do it. In this economy it's best to build on your reserves slowly and safely than taking big risks. imho (and I am a firm believer in real estate, by the way). Just don't want to see you get hurt. Good luck!

 

[LauraR]

Wanted to add my two cents here. My husband has worked in the mortgage and bankruptcy industry for many years, and would not touch FLA with a ten foot pole. Market is so overly saturated, and...as another poster said very accurately, values won't appreciate for a very long time. By 'very long time', I'm talking well over 10-15 years at least. It's a VERY dangerous place to buy right now, unless you are pretty well-off and plan on sitting on it with no need for the rental income. I know very well-to-do people who owned many rentals in both NJ and FLA and sold them all years ago because it is such a sad market down there.

Yes, things are dirt cheap and a bargain for sure, but if you are depending at all on income to cover your expenses then don't do it. In this economy it's best to build on your reserves slowly and safely than taking big risks. imho (and I am a firm believer in real estate, by the way). Just don't want to see you get hurt. Good luck!

Wow, that's pretty discouraging. I appreciate the input, though. And I appreciate the previous post from Hoppy.

I am thinking long term rental over vacation rental, just because it is less hassle. But after all the good points that have been made, I am feeling doubtful that this will end up looking like a great investment. But I will gather as much information as I can, and crunch the numbers before doing anything.

I just wish I knew a better alternative investment! The stock market still seems pretty dicey (although I have continued investing during the downturn, and mild rebound). Nothing really looks good now.

 

[mtquinn]

I am sorry if I put a damper on your excitement. I know that feeling...the rush with a seemingly great idea and then you deflate when someone punctures the balloon...so to speak. Depressing. But it's better to be sad now and still have your money!

There are other, safer ways to invest, but I am not a financial expert so I don't want to rattle off them all. All I know is things are so uncertain right now, and stocks are so volitile (although the blue chips are a steal (like the Disney stock) that I am too afraid to invest any more of my $. I am just protecting what I have and waiting to see what happens out there. Aggression is frightening to me right now, you know?

I am, though, a big believer in real estate, as I said before. But I would only invest if it is money that I am not relying on for a long time. A REALLY long time. If you can do that, then it's not a bad idea to look into property. If you can sit on it, maintain the costs, and wait about twenty years then go for it! But I would need that rental $ if it were me, so I couldn't even think about that. Just wanted to protect you and your savings. I apologize if I "deflated your balloon."

Good luck!