Florida Condominiums Top Tips to Make an Intelligent Investment

Florida Condominiums and Buying Right

Florida Condominiums

Key West Style Florida Condominiums

 

Experiencing a steep growth curve prior to the economic downturn, the Florida real estate market is a vibrating hub of abundant unsold and new condominium units. This is an once-in-a-lifetime opportunity for second-home buyers as well as investors interested to grab a piece of the endlessly desirable Florida condominium realty pie. With a large number of these condominiums being located near lush golf courses, sunny beaches, and providing world-class amenities, buyers have been flocking to this part of the world. Recently prices of Florida Condominiums have been back on the rise.  Don’t be in such a rush though you forget to do your due diligence.  Purchasing a condominium under Florida laws and regulation is an entirely different ball game compared to what you have experienced so far!

 

Condominium and Units

Starting with the definition of condominium for first time condominium buyers in Florida.  What exactly does the term ‘condominium’ stand for? Though most owners refer to their individual apartments as ‘condominium’, in reality, condominium denotes the entire property consisting of all the apartments, parking areas, grounds, and generally, the recreational facilities incorporated there. Each apartment is known as a ‘unit’. Other than the unit, the rest of the property is referred as ‘common elements’. The buyer has the exclusive ownership of the unit and the ownership of the common elements is shared with other unit owners. The Florida Condominiums Act highlights that all the owners have an undivided ownership of the common elements.

Condominium Documents and Its Importance

This ‘unit’ arrangement could lead to absolute chaos unless there are strict management and guidelines in place. Due to this close proximity with your neighbors and the potential chances of miscommunication regarding the common elements, there are condominium documents highlighting restrictions and rules that cover different concern areas including maintaining, repairing, and insuring the common elements. These documents briefly incorporate the following:

  1. Declaration of Condominium – The key document of your ownership of Florida condominiums. Describing the common elements and the units, this document defines the precise rights of the unit owner, authorizes formation of association, and controls the operation and uses of all common elements.
  2. Articles on Incorporation of the Association – Filed with Florida Department of State, this document authorizes the creation of the condominium association.
  3. Bylaws of the Association – The bylaws are the guidelines for the association’s operation.
  4. Operating Budget – It describes the association’s common expenses. The cost is split among unit owners in proportion to their ownership interest in all the common elements and changes year to year.  We always recommend you request a current budget from the HOA directly when purchasing.
  5. Rules and Regulations – Consisting of restrictions concerning the use of the common elements, these rules are ratified by the Board of Directors.

Investment and Purchase of a Condominium Unit

Though the purchase of Florida condominiums involves many considerations like a  single family homes, different factors are involved because of unique legal structure of condominium real estate. Under the Florida Condominiums Act, the two categories of the condominium purchase process are purchasing directly from the developer or from any prior unit owner. Under the Act, these two procedures are differently treated and there are different legalities involved. If you are eager to accept the Florida condominium life and planning to invest in a unit, prior research of these criteria is important.  Once you purchase its too late to do your due diligence.

 

Things You Should Know Before Attempting to Buy a Florida Condominium – Condo By Laws

Condominium By Laws

David Castillo Dominici | freedigitalphotos.net

Florida condominiums are selling like crazy right now, including bulk condominiums to investors who are looking to make a profit. It’s entirely possible to make money with condominiums, but it’s also important to know as much as possible about purchasing condos and the condo by laws before doing so, to avoid common pitfalls and issues. Here are some important things you should know before attempting to buy a Florida condominium.

 Owners Association Issues

The first thing you’re going to want to think about is the owner’s association, which is the committee that governs the condominium units and the behavior of the tenants. While many owners associations are fairly lax in their rules and guidelines, others are extremely strict. You should read over the policies and information before purchasing any condo so you know how difficult it will be to renovate and then sell the condo.  Ask for a copy of the Condo By laws and review them.

Rental Issues

With the economy the way it is currently and the unemployment rate being so high, many individuals are unable to pay their monthly HOA payments. This can mean that there simply isn’t enough money to handle maintenance issues and other problems that arise with the condominiums. Another tragic result is that the building could end up losing insurance coverage. If this happens, banks simply aren’t going to lend money to interested buyers who want to purchase one of the units. You can see that this is a difficult situation to be in, so thoroughly researching the history of payments and issues is a must. Along with the condo by laws you should be requesting a copy of the condominium budget and minutes.

Thoroughly Looking Over Special Assessments

It’s very important that you and an attorney thoroughly look over the meeting minutes that you will be provided with. These will include the things that are discussed as well as special assessments addressed in meetings, and will give you insight into what’s going on with the building. Unfortunately, many buyers realize too late (through these documents) that there has been an ongoing problem and they’re left to deal with the problems after they’ve already purchased the building. If a problem is spotted in the special assessments, you should thoroughly investigate the issue before making an offer or purchasing.   In addition to the minutes, there is small print in the condominium by laws that you are bound by so read it.

Attorneys

If you go into a contract or even look at a property without the benefit of a real estate attorney, you could end up making a bad investment. You need the professional opinion and advice of someone who deals with these issues every single day, especially when it comes to Florida condominiums.  Condominium Documents or Condo by laws should be reviewed in detail.  Take the time to seek out a qualified attorney in order to get the best legal expertise when it comes to purchasing Florida condominiums.

By using these tips and information you can make sure it’s a great deal before purchasing a Florida condo, whether you plan to keep the condo or invest to make a profit.  Looking for a copy of the Condo Documents search our database of thousands of Florida Condominium Documents