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Message
re: Orange Beach Condo Ownership
Posted on 10/10/19 at 3:53 pm to hungryone
Posted on 10/10/19 at 3:53 pm to hungryone
quote:
Whew. Imagine having to spend a month a year there for 20 years. Ugh. That's the single most compelling argument NOT to buy a condo. Go see the world, enjoy different places. OB is not some sort of world beauty spot. Yes, the beaches are nice w/white sand, but it's a big planet with many, many gorgeous locales.
I don't completely disagree. But you also don't have kids or grand kids right? Traveling with family is hard, especially when you live in different locations. You have a 2nd vacation property and you go there for the month of February and you ask your kids to come down for a long weekend at their leisure. Makes things a little easier.
Most beach properties are all cash purchases that are a diversification for their portfolio. You spend $500k and hopefully get a 2.5% return a year and make a little extra when you sell. Make the wife and daughters and grand kids happy. No one is getting rich but its not a terrible play either.
If you spend a month at the beach that's 11 months a year to go vacation elsewhere.
2
Posted on 10/10/19 at 4:01 pm to baldona
quote:
Make the wife and daughters and grand kids happy.
Posted on 10/10/19 at 4:45 pm to jimbeam
Not everyone wants to “see the world” or deal with the logistics of it
This post was edited on 10/10/19 at 5:22 pm
Posted on 10/10/19 at 5:31 pm to jimbeam
Rent a big beach house for the extended family stuff. Condo not good.
Posted on 10/11/19 at 2:15 am to baldona
quote:
you go there for the month of February and you ask your kids to come down for a long weekend at their leisure. Makes things a little easier.
Rent a condo at phoenix VII for the entire month of February for $2500 bucks, sometimes even less, and have the kids come down to visit at their leisure. At the end of the month you walk out, the door locks and you don't have to think about the place again until the next year.
This post was edited on 10/11/19 at 2:20 am
Posted on 10/11/19 at 7:25 am to EA6B
quote:
Rent a condo at phoenix VII for the entire month of February for $2500 bucks, sometimes even less, and have the kids come down to visit at their leisure. At the end of the month you walk out, the door locks and you don't have to think about the place again until the next year.
Certainly it’s not for everyone. There’s a lot of things you can rent that make more sense financially then buying.
Again a large percentage of vacation homes are cash purchases. We are talking 10% or less of their net worth for many so owning an asset has some value. If you are financing then there’s more to keep in mind certainly.
I’ll get shite on for this because some people just don’t understand until you are there, but once you get to a certain net worth you don’t want a huge percentage of your net worth dependent on the stock market. Pulling some money out, enjoying it with the fam, and getting a small percentage back is not a bad investment. In fact, it’s routinely recommended by financial advisors.
Posted on 10/11/19 at 8:33 am to EA6B
quote:
Rent a condo at phoenix VII for the entire month of February for $2500 bucks, sometimes even less, and have the kids come down to visit at their leisure. At the end of the month you walk out, the door locks and you don't have to think about the place again until the next year.
Or think about it at all during hurricane season. If I’m gonna buy vacay property to diversify, it sure as hell isn’t going to be another dwelling in the coastal zone.
Posted on 10/11/19 at 8:50 am to hungryone
If I had the choice id go for lake front
Posted on 10/11/19 at 11:00 am to Popths
If you can pay out right and avoid a mortgage I would wait until the next recession to buy in OBA/Panhandle.
Posted on 10/11/19 at 11:42 am to hungryone
quote:
Or think about it at all during hurricane season. If I’m gonna buy vacay property to diversify, it sure as hell isn’t going to be another dwelling in the coastal zone.
I don’t go to Europe because I worry about the plane crash on the flight over.
Who is paying $1 mil cash for a condo? Someone that has enough money to not overly worry about a properly insured investment.
Posted on 10/11/19 at 2:16 pm to bubbz
quote:
The biggest issue with condo ownership is Dues and Special Assessments. You need to ask about special assessments when you’re looking.
A buddy of mine was about to bite the bullet and I suggested he request the “minutes” from the condo board for the last 2-3 years. He found out a large assessment was in the works in the next year or two ($40k range). That’s why he thought he was getting a decent deal.
Do your homework.
Posted on 10/13/19 at 1:40 am to Peejack84
quote:
Just wait for the next recession.
Pretty much. You have to have a prime property to make some real money right now. Mine just pays for itself but my equity will be a nice pay day
quote:
Condos and HOA's try and plan for the future with savings and some do it very very well. Others' don't
This is real important. Banks will not loan to you if the HOA is not healthy
quote:
Or think about it at all during hurricane season. If I’m gonna buy vacay property to diversify, it sure as hell isn’t going to be another dwelling in the coastal zone.
Some of those buildings are pretty stout. The banks call mine Fort Sugar Beach for a reason
Posted on 10/14/19 at 6:55 am to Popths
I have some experience.
Some nice places there. Do your research. I like being near restaurants.
A few caveats;
Fees: make sure all fees are disclosed. Some places have high fees/hoa. Ask why.
assessments;. Ask questions about how many assessments they’ve had, how much and what they were for.
Condo boards; get to know the board chairman. Make sure you trust him/her. Ask about whether or not they’ve ever been sued and why.
Ask about board members backgrounds. Some condo boards can be corrupt. Any members doing work for the condo? Ie board member owns and electrical firm- thus he gets all the electrical jobs for the condo.
Any time shares? Some banks won’t lend to you if building has time shares.
Are there a lot of rentals? Some banks steer away from buildings with high rental numbers. It can also be an issue if you don’t want to rent your place. Buildings with lots of renters can deteriorate.
Otherwise, it’s nice place and some good buildings.
Some nice places there. Do your research. I like being near restaurants.
A few caveats;
Fees: make sure all fees are disclosed. Some places have high fees/hoa. Ask why.
assessments;. Ask questions about how many assessments they’ve had, how much and what they were for.
Condo boards; get to know the board chairman. Make sure you trust him/her. Ask about whether or not they’ve ever been sued and why.
Ask about board members backgrounds. Some condo boards can be corrupt. Any members doing work for the condo? Ie board member owns and electrical firm- thus he gets all the electrical jobs for the condo.
Any time shares? Some banks won’t lend to you if building has time shares.
Are there a lot of rentals? Some banks steer away from buildings with high rental numbers. It can also be an issue if you don’t want to rent your place. Buildings with lots of renters can deteriorate.
Otherwise, it’s nice place and some good buildings.
This post was edited on 10/14/19 at 7:11 am
Posted on 10/14/19 at 9:50 am to baldona
quote:For flood, yes the HOA's policy will cover unit interior. Unit owner has the option to buy their own separate policy if they want contents coverage for flooding.
Generally there is no Hurricane/ Flood insurance in a condo that's on the beach. Its paid for by the HOA dues.
But unless Alabama is totally different than LA and I'm missing something, you still need a separate HO-6 policy for your fire/hazard/wind/hail/liability coverage because the HOA's master policy should only cover the exterior and common areas. Unit owners are responsible for getting their own coverage on their unit interior and contents.
Posted on 10/14/19 at 1:34 pm to Tiger Prawn
I just found out in Alabama that the insurer is only responsible to return the condo interior back to condition of the original construction. ie you changed cabinets, floors, walls, etc they will pay to put in what was originally installed not replace what is there with flooding. if you replaced builder grade press wood cabinets with real wood you are out of luck on replacement.
This post was edited on 10/14/19 at 1:35 pm
Posted on 10/15/19 at 8:02 pm to Popths
I own a couple of condos in the Phoenix units. I’d recommend a one bedroom unit if it is mostly for investment. People are more likely to rent them during the off season than larger condos. Also being smaller, it doesn’t require a fortune to update nicely. Based on what I paid, the cap rate is a lot higher on my one bedroom. It has appreciated nicely too. Paid slightly less than $200K for my one bedroom in 2014. They now list for about $325K. My rentals are $36K so far this year. Paid $482K for my three bedroom in 2018. Rentals are $50K so far this year in it.
Posted on 10/16/19 at 1:07 am to fatboydave
quote:
just found out in Alabama that the insurer is only responsible to return the condo interior back to condition of the original construction. ie you changed cabinets, floors, walls, etc they will pay to put in what was originally installed not replace what is there with flooding. if you replaced builder grade press wood cabinets with real wood you are out of luck on replacement.
Simply false.
You can get an HO6 policy for a couple hundred/year, and have “additions/alterations/improvements” to rebuild properly, protect your personal property, and have liability of $500k.
Posted on 10/16/19 at 8:56 am to Ramblin Wreck
quote:
I’d recommend a one bedroom unit if it is mostly for investment.
I totally agree with this. Bought a 2BR and have since bought several studios. The cap rate on the studios are much higher than the 2BR. I wanted to sell the 2BR and get 2 more smaller ones, but the wife wants to keep the 2BR for family getaways. Which never seem to happen because they are always to busy to vacation with us, but often ask to stay at the studios (while we baby sit the grandkids, of course!)
Posted on 10/16/19 at 3:20 pm to Tiger Prawn
quote:
For flood, yes the HOA's policy will cover unit interior. Unit owner has the option to buy their own separate policy if they want contents coverage for flooding.
Correct. You still need homeowner's insurance. But if you are on the 3rd floor of a condo for example is flooding come into play? Honestly asking I don't know?
I looked at a $1.5 mil beachfront house the other day and the insurance was $2500 for homeowners and about $10,000 for flood/ hurricane. A similar condo will have about $1,000/ month HOA dues.
So HOA dues are a wash expense wise when compared to owning a stand alone dwelling. HOA's aren't magically just more expensive. Those bills will be there whether there's an HOA or not.
Posted on 10/16/19 at 8:23 pm to HailToTheChiz
quote:
If I had the choice id go for lake front
that is what i am doing eventually in nova scotia near a buddy of mine. already have the timeshare at disneyworld. zero headaches vacation property we have used for whole family for 20 years. but yeah, lakefront where my friend's cottage is? beautiful. that is the plan.
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