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Condo Ownership in Gulf Shores/Orange Beach
Posted on 6/6/11 at 1:58 pm
Posted on 6/6/11 at 1:58 pm
Anyone with experience in condo ownership in the Gulf Shores/Orange Beach area. I am looking at a couple possibilities at one of the Phoenix condos.
My biggest question i guess, is do they pay for themselves with the revenue generated from rentals or do they turn into a money sink?
My biggest question i guess, is do they pay for themselves with the revenue generated from rentals or do they turn into a money sink?
6
Posted on 6/6/11 at 2:00 pm to chadg
It could go either way. No crystal ball.
Alabama condos have been much more stable than the Florida market and I hear the Brett Robinson(phoenix) folks are pretty good to deal with.
Alabama condos have been much more stable than the Florida market and I hear the Brett Robinson(phoenix) folks are pretty good to deal with.
Posted on 6/6/11 at 2:17 pm to notiger1997
quote:
I hear the Brett Robinson(phoenix) folks are pretty good to deal with
That's what i am hearing also. They have reasonable fees and do well marketing the units.
Posted on 6/6/11 at 2:25 pm to chadg
quote:
My biggest question i guess,
That would be far from my biggest concern. Your biggest concern is "If hurricane oprah knocks my condo back to Birmingham, what are my liabilities at risk with the association?"
Posted on 6/6/11 at 3:19 pm to Chad504boy
quote:
That would be far from my biggest concern. Your biggest concern is "If hurricane oprah knocks my condo back to Birmingham, what are my liabilities at risk with the association?"
That was my biggest question. Fees cover insurance that will replace it to "original condition". If you do upgrades, that is not included in the coverage.
Posted on 6/6/11 at 4:00 pm to chadg
quote:
That was my biggest question. Fees cover insurance that will replace it to "original condition". If you do upgrades, that is not included in the coverage.
I'm not the expert but I think there is far more to it as for liabilities you could be assessed.
Posted on 6/6/11 at 4:18 pm to Chad504boy
quote:
I'm not the expert but I think there is far more to it as for liabilities you could be assessed.
Fees cover liability insurance also. I just want to know if the dam things will at least come close to paying for themselves before i make a purchase like that. I have rental properties around home, but this is somewhat different.
Posted on 6/6/11 at 4:21 pm to chadg
quote:
Fees cover liability insurance also
not what i meant by liabilities. More to the point of what you said about paying for upgrades and stuff.
Posted on 6/6/11 at 8:14 pm to Chad504boy
Friends family had condo messed up by hurricane a few years back. They had to pay like an extra 50000 to the association to get things fixed back right for the main building and didn't get to use the condo for almost 2 years.
Posted on 6/6/11 at 8:26 pm to mtcheral
quote:
Friends family had condo messed up by hurricane a few years back. They had to pay like an extra 50000 to the association to get things fixed back right for the main building and didn't get to use the condo for almost 2 years.
A former co-worker of mine had a condo in the Orange Beach area, same situation, hurricane damaged the facade of the building, and the association required the owners to devy up what was not covered by insurance. Think he got hit for around 30 grand.
This post was edited on 6/6/11 at 10:25 pm
Posted on 6/6/11 at 8:42 pm to JWS3
any condo that has been forclosed or is not having its association fees paid is divided by all the owners and paid at the end of the year. Just something else to consider.
Posted on 6/7/11 at 7:55 am to chadg
quote:
Fees cover insurance that will replace it to "original condition". If you do upgrades, that is not included in the coverage.
This is your biggest issue.
About 5 years ago our Condo Association had " upgrade" work done, which really affected 1/4 of the condos, depending on 1br, 2br or 3br owners had to pay 22k-38k out of pocket.
There is a lot more to just paying Monthly Association fees
Posted on 6/7/11 at 8:14 am to BayouBengalinBama
quote:
This is your biggest issue.
About 5 years ago our Condo Association had " upgrade" work done, which really affected 1/4 of the condos, depending on 1br, 2br or 3br owners had to pay 22k-38k out of pocket.
There is a lot more to just paying Monthly Association fees
These are the things that they haven't said anything about... I will check into this. From what i have been told, each Phoenix has a separate association. Some actually have millions in the bank for these types of losses. At least that is what i am told.
Posted on 6/7/11 at 10:05 am to chadg
Owned one for about 15 years. Just make sure you are going into the purchase with your eyes wide open and an open checkbook. The salt water is murderous on maintenance and don't even get me started about condo associations.
Posted on 6/7/11 at 12:50 pm to notiger1997
quote:
I hear the Brett Robinson(phoenix) folks are pretty good to deal with.
some peeps in my family own a few condos in Gulf Shores & Orange beach. They were recently complaining about Brett Robinson. Apparently they were promised a lot more rentals than they actually get.
Prior to using Brett Robinson (myers maybe?), they had issue with tenants stealing items from the condo: art, vacuum cleaners, and even bar stools. The property manager would call the owners and tell them they need to replace the items instead of going after the previous renters. Seems kind of backwards to me. If people figure out they can steal from your condo without repercussion, then you will never be able to keep anything there.
Posted on 6/7/11 at 1:08 pm to chadg
quote:
do they pay for themselves with the revenue generated from rentals
Prices have fallen dramatically since 2008, but they are still too high to generate positive cash flow before taxes. You may be able to generate break-even cash flow after taxes, assuming you can put > 20% down.
I had been closely following the Phoenix condo market and seriously considering buying until about a year ago. I finally decided I didn't want to tie up so much capital in something that didn't generate meaningful cash flow.
I do believe you would get an outsized return on your investment in the long-run, but you would have to feed it cash in the near-term.
I put together a fully loaded pro forma after talking to a couple of realtors with Brett Robinson. I'd be happy to share it with you if you are still interested (and cut me a deal if I stay at your place!).
Posted on 6/7/11 at 1:10 pm to Dusty Bottoms
quote:
You may be able to generate break-even cash flow after taxes, assuming you can put > 20% down.
Not even close. Try 50%
Posted on 6/7/11 at 1:15 pm to ashy larry
quote:
Apparently they were promised a lot more rentals than they actually get.
Before making an offer, insist upon the sellers providing full access to their historical P&L, especially the rental history. And don't buy into any promise that the future will hold anything more than the past.
Dealing with the headaches of missing/damaged furnishings is part of the process. That cost should be visible in the owner's history as well and should be factored into the decision to buy. Aside from the obvious headache of having to deal with it, it's just a numbers game (e.g., I figured $750 per bedroom for maintenance and baked that into the pro forma).
Posted on 6/7/11 at 1:17 pm to I Love Bama
quote:
Not even close. Try 50%
I scouted things pretty closely and would be willing to bet a beer I'm not that far off.
Posted on 6/7/11 at 1:26 pm to Dusty Bottoms
Two of my co-workers moved here from Panama City last year. One is a broker and the other a residential appraiser.
After you pay all the expenses sometimes you don't even break even at 50%.
I'm not hating on condo ownership, it just makes zero sense from an investment standpoint.
After you pay all the expenses sometimes you don't even break even at 50%.
I'm not hating on condo ownership, it just makes zero sense from an investment standpoint.
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