Condo buying

[SimonV]

This is not strictly Trip Planning, but it is something we have come across a lot recently, and it may be of interest to the property speculators among you ( ).

First of all, for the strictly UK contingent here, what do people understand by the term 'Condo' (no funny comments, please!)? It is the new buzzword in Florida accommodations, and particularly the new variety of condo-hotels, of which there are several just opened (Lake Buena Vista Resort Village & Spa, and Floridays Resort Orlando to name just two), with at least another TWELVE in the pipeline for the next few years.

Now, the condo idea first. This is, generally speaking, the term for an owned apartment in the US; they can vary from a semi-detached town house to a multi-storey tower block, and they are all condos. It seems to be a difficult concept to get across to the non-American audience, but it is worth getting to grips with in the current market.

With straightforward condos, this is not your typical vacation home-type property. Most can be leased for a minimum of six months (especially in Orange County, which has very tight restrictions on vacation rentals), but they can represent a great buy if you are looking for a second home or just want to get into the local property market.

And then there are the condo-hotels, which have become the big property monster in the last 12 months or so. This website - www.condohotelcenter.com - gives a lot of excellent info on the general idea, as well as highlighting some really superb-looking properties. BUT - and this is a big but - there are a HUGE number of condo hotels on the market right now, and we are even seeing some fairly ordinary (or downright pokey) hotels and motels being converted into 'condo-hotels.' There ARE some eye-catching developments (check out www.thebluerose.com) and, for those with some serious money to invest, they look like a great buy. But we would certainly urge caution in this particular area.

The one we most like the look of is a development we were flagged up on a few months back (and which the owners have consulted us about as regards the UK market), but which isn't likely to feature in the next Brit's Guide because it is not, strictly, holiday accommodation and is therefore beyond our normal guidebook remit. The community in question is the recently-converted (from apartments - which are rented, as opposed to condos, which are owned) Grand Reserve on Kirkman Road just north of Universal Orlando. In a solid residential area but close to all the main attractions, this is a really well constructed resort-style community, built around a stylish main clubhouse, and, in the current market, it looks like particularly good value. It's website is www.orlandocondohomes.com and we have also featured it on the new Property section of the Brit's Guide website.

What we'd like people to do is take a look at this particular property, and then get back to us with some thoughts on what they like - and don't like - about this whole condo-buying idea. Is it something that will work with the UK market, or is it too much of a hard sell compared to the more traditional holiday homes? Your answers, please............!!

 

[yo-ho-yo-ho]

Interesting reading. Earlier this year when i was in Orlando i had a meeting with a well known real estate broker and they said Condo's are taking off BIG time and that resale value on ordinary homes ie villas are falling.

 

[Pootle]

Very interesting post Simon.

Have I got this right? if you bought into the Grand Reserve at Kirkman, the big advantages would be great accommodation which would be trouble-free to the owner (but presumably with a hefty monthly maintenance cost) and income generated through rentals when you weren't in residence? If you invest in one presumably you could use your own unit as often as you liked and it would be available for rent at other times?

To the rentee it would be similar to renting a timeshare - and I understand that the Orlando market is considered to be oversupplied. Even among the big quality-end providers: Hilton, Marriott etc, I believe you can often rent one of their units directly from the owner for little more than the cost of their maintenance fees if you know where to look.

What about resale values? I'd guess it's a whole lot easier to get in than it is to get out.

I think it's an interesting concept for UK owners. I've looked at buying in Florida since the 80s but have never liked the idea of running a business trying to get bookings to help pay for the hefty costs associated with ownership (taxes, utilities, maintenance etc). With this someone else would get the bookings and take care of everything else.

For me I doubt I would ever do it because I'm cautious by nature and would be concerned about over-supply, competition in a market where everyone gravitates towards 'new' and whether the developers would maintain the initial high standards, not to mention a difficult (I expect) exit strategy. Oh, and DVC satisfies my needs very well for central Florida

 

[lizzysmith]

Hate to say this but this bit of the DIS seems to be developing into a property buying section. Mind you there is loads of dosh in selling.
I liked the website for Grand Reserve at Kirkman Parke. The attention to detail seems a bit lacking because they then go on to refer to it as Grande Reserve at Kirman Parke.

 

[Pootle]

Hate to say this but this bit of the DIS seems to be developing into a property buying section. ...

I thought Simon covered his reason for posting very well in his first sentence. This is something people regularly ask about on the UK boards.

 

[granmaz]

It looks very appealing, and should cater for those wishing to be nearer Universal. Not sure the website tells much about buying into this type of market, though I suppose they want you to go and visit.

 

[UKDEB]

Condo conversions definitely seem to be the latest thing in the Orlando property market. I suppose if I was looking purely at a purchase from an investment angle, I might consider it, but how many Brits actually do that? On the whole, I'm guessing the primary motive is a desire to own a second home in one's favourite holiday destination (be that Orlando or elsewhere). Renting it out is a means to an end. I'd be more inclined to buy an investment property here where I can keep an eye on it myself, understand both the legalities and the market, and have a better chance (capital appreciation aside) of earning a worthwhile return.

The Grand Reserve development looks very pleasant, if a little formulaic. I can't make out whether it falls into the vacation rental market, or not. If it does, it's probably a good investment given that most visitors to Orlando are Americans and they are much more likely to rent a condo than a villa. It also has the advantage of being very close to Universal where, as far as I know, hotels are just about the only accommodation option at the moment.

If I were in a position to be buying in Orlando at the moment, I couldn't see myself buying a condo. I'd be concerned that there's a danger of over-supply with developers all jumping on the bandwagon and that, when the market settles, my investment could fall in value. And what happens when the complex ages and begins to look tired? At least with a villa, I have control over my individual property.

I don't think this particular development is exciting enough to capture the imagination of most Brits buying in Orlando. At the risk of repeating myself, I imagine there is normally an emotional draw and I wouldn't have thought Grand Reserve is going to have the appeal of owning a private villa or DVC (or, with the advent of Bonnet Creek, even a non-Disney timeshare - I could almost get excited about that myself ).

 

[yo-ho-yo-ho]

Existing home sales in Florida decreased 29 percent last month as the booming housing market slowed under rising mortgage rates, inventory levels and insurance premiums, although home prices climbed slightly, a realtor's association reported Tuesday.


A total of 18,089 existing single-family homes sold statewide in June, down from the 25,552 homes sold during June 2005, the Florida Association of Realtors reported. This year, existing home sales are down 25 percent as the market continues to adjust following a hot few years, the group reported.

None of Florida's 20 largest metropolitan areas showed an increase in sales from last year -- Jacksonville's drop of 3 percent was the lowest. Existing home sales in Daytona Beach were down 39 percent.

 

[coppertop]

I can only add that I have stayed in villas, hotels and condos and my preference out of the 3 is the condo - all the facilities of a hotel with more space, and all the facilities of a villa. I will be looking at condos (to rent) rather than hotel/villa in the future.

 

[Dicky Knee]

I thought Simon covered his reason for posting very well in his first sentence. This is something people regularly ask about on the UK boards.

...and to me, then used his opening sentence to cover his back on a "sales" pitch. Maybe I'm just cyncal, but I think most of us have had the telephone call from the "double glazers" starting with the "have you five minutes to help us with a survey of customer requirements.........".

 

[SimonV]

Just to make it clear, Grand Reserve is NOT a short-term rental community (i.e. it is not somewhere you can buy a unit, then rent it out for 2 and 3-week vacations) but a longer-term investment, either as a second home you would use yourself (and leave empty for part of the year), or lease out (for a minimum of 6 months a time) as you would do if you owned an apartment in the UK. The interest from our point of view is in seeing what people think of this so we can provide useful advice to all concerned (but mainly our readers and website users). It really IS a complicated business, and we don't want people getting in to things they don't understand or can't afford. At the same time, there are some great investment opportunities for those who can afford it (although it is not quite so lucrative as it was 3/4 years ago), and it is becoming a huge part of the Orlando holiday scene (timeshare is becoming increasingly prevalent, for example, and some companies are starting to use the old Costa high-pressure tactics). So it is as much about being forewarned in some cases.

The feedback is all useful, though, so please keep it coming