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Considering purchasing a condominium? It is a natural impulse that many have after visiting the beautiful shores of the Northwest Gulf of Mexico. You not only want to visit again, you want actually own a “piece of the Gulf” for yourself!
If you have never purchased a condo before you will have questions about condo ownership. This page is designed to give you a quick look at condo ownership. Below is a list of Frequently Asked Questions, with answers. If you have other questions a Condo Sales realtor will be happy to help!
1) Do condo owners pay fees to cover the costs of operating the association? If so, how much are the fees?
Yes. All condo owners in a building are obligated to pay monthly or quarterly fees to the condo association. The fees charged are usually assessed based on the amount of living space in the individual condos. For example, one bedroom condos have lower fees than two or three bedroom condos.
2) What do the fees cover?
The association is in charge of property management, maintaining common areas, facilitating payments on building insurance, any major special assessments such as roof replacements, painting and other major repairs, etc. A portion of the association fees are used for these items, but the remainder of the fees are used by the association to secure contracts with utility companies to provide services to all of the condo owners in the building. These are needed services like water, sewer, pest control, cable TV, etc. Fees are paid directly to the property management facilitator or the Association, usually of a quarterly basis.
3) Is condo financing available?
Yes. Many lenders offer condo financing, however it is advised that you try to do business with a lender that is in the general area of the condominium building. Those lenders are more familiar with the buildings in their area and can often provide a quicker answer to a borrower regarding financing, as opposed to lenders operating a significant distance away or perhaps even located in another state. A Condo Sales realtor can suggest the names of lenders you may wish to contact for free information about obtaining a condo loan.
4) Can I make a lot of money by purchasing a condo, then renting it out?
Some condo owners never rent their condos. Other owners do very well renting their condos. However, there are many things to consider. Basically, it all comes down to condo income and expense. For example, it is easy to understand that when considering overall expense, the bottom line of rental income vs. operational expense will look better for an owner who has paid cash for a condo vs. an owner who has a mortgage payment to meet. The other expenses associated with ownership are basically the same. In addition to a mortgage payment, an owner will also have to factor in expense for association fees, electrical bills (usually not covered in association fees), and property taxes.
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These will hopefully be offset by rental income, but if not the owner should expect to pay the difference out of pocket. Aggressive marketing to people looking to rent can make a big difference when it comes to the profitability of a condo. There are several ways to accomplish this. Speak with a Condo Sales realtor regarding some of the best ways to maximize condo rental income, and how to control expenses.
These are some of the most commonly asked questions about condo ownership. For more free information, contact a Condo Sales realtor today with any additional questions you may have!