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Tag: Anna Maria Island real estate

Castles in the Sand

Anticipating condo special assessments

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

Owning property is nothing short of waiting for the unexpected to happen. Whether you own a single-family home or live in a condominium community, you can be sure that eventually, you will have to make a major repair involving major money. The only difference is how those repairs will be funded.

When you own your own home and the roof needs to be replaced, it’s your financial responsibility. When you live in a condo community, it’s still your responsibility only it’s administered differently. Hopefully, your homeowners’ association will have anticipated major repairs and will have funded these and other expenses accordingly, however, if they didn’t, get ready for a special assessment.

Special assessments are designed so that condominium boards can pay for unanticipated expenses they don’t have the money for. These are one-time payments that can be a lump sum or spread out over a specified period of time. Once the purpose of these additional funds is met, the special assessment ends, and if there is money that was collected from the owners, it cannot be used for any other purpose and must be refunded.

Condo boards have the ability to pass a special assessment as they see fit without the majority vote of owners. Owners must, of course, be notified of a scheduled vote and the purpose of the assessment. Typically, owners know well in advance of an upcoming assessment since these matters are discussed in prior board meetings with the full knowledge of owners and a full explanation from the board of why this is necessary. Frequently boards will decide if it is more advantageous to borrow the money for the repairs and use the special assessment to repay the loan.

Another type of special assessment that many condo associations in Manatee County experienced last year was a special assessment for hurricane damage. Just like single-family homes, condo associations have a hurricane deductible as part of their insurance policies. If the association requires repairs after a hurricane, as many experienced with Irma, that are not covered because of the hurricane deductible, the owners will likely be billed for a special assessment to cover these repairs.

However, most homeowners’ insurance policies for condos have loss assessment coverage to reimburse owners for assessments levied on them for hurricane damage. Loss assessment coverage by Florida law is a minimum of $2,000, and some insurance companies have a $250 deductible from that amount.

It is particularly important for anyone who is considering the purchase of a condominium to inquire about the financials of the association. Ask if the association is fully funded, meaning that it has anticipated future repairs and is funding this amount from regular dues payments. If you have an accepted offer and contract on the purchase of a condo, you will be provided with the financials of the association and have time to understand how healthy the association is financially. Also, be sure to ask for a list of recent special assessments and their purpose. Naturally, older condo communities will face more maintenance issues, and you want to be sure that the board has recognized and planned for these events.

Expect the unexpected when you own any kind of property because for sure it will happen. Just because you own a condominium, don’t think that everything is automatically taken care of. It’s your responsibility before you purchase to understand and feel comfortable with the way funds are disbursed within a homeowners’ association.

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Castles in the Sand

So, you want to be a real estate investor

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

There’s only one thing trickier than real estate investing and that’s – well come to think of it there isn’t anything trickier. When it comes to navigating the ins and outs of real estate investing there is so much to learn that pulling a rabbit out of a hat seems like child’s play.

There is a saying that true real estate wealth is based on cash flow and that’s what investors, especially first-time investors, should aim for. Generating cash flow in a good, stable rental is more dependable than counting on a quick flip and appreciation.

If you’re purchasing a property that needs work first determine if the improvements are for the purpose of renting or flipping. Obviously, rental property can be improved with simpler and lower end finishes. If you are buying to resell, check out comparable properties for sale in the area and see what type of finishes are being offered.

The three most important factors when purchasing investment property is the cost to buy, the cost of improvements and how much you can sell or rent for after you renovate. Essentially, don’t over improve.

Determine the existing leases in place for rental properties and how that works for you. Go to the city departments to make sure there are not any road changes or new developments that can decrease the value of the property down the road.

Don’t be afraid to ask for help. Finding someone you trust could be the difference between a successful purchase and a disaster. Interview property managers and real estate agents who are active in the area, but don’t use their input to make a final decision.

Be realistic when calculating your financials and value your personal time in maintenance and paperwork. There are always unforeseen costs when tackling a renovation – taxes and loss of a tenant or a sudden downturn in the market can really set you back. Also, be careful when screening tenants. Do a credit check and get references, if necessary. Start small and make sure you can pay the mortgage on your investment should you find yourself in that position.

Careful with neighborhoods that are transforming, it may or may not happen. Learn the market as thoroughly as you can but it may be best to leave the more exotic purchases to experienced investors who can tolerate a downturn.

Set a targeted budget for your purchase and don’t get off track. Remember this is a business, don’t let your emotions rule your good sense. Education is the best way to keep emotions in check. Probably the most important thing and the one that first-time investors always forget is to stick to your principles and don’t overbid to prove you know what you’re doing. Know when to pass and keep searching without any emotional attachment to what you lost.

All real estate is local and that may be the best advice, especially for a new investor. Again, don’t make your decision based on the home you would like to live in and forget about the potential for profit. It’s easy to confuse where you would live personally to where you should invest.

There’s no real trick to becoming a real estate investor, no rabbits to pull out of a hat and no ladies to be cut in half. The real trick is pretty straightforward: know the market and don’t let emotions get in the way. Good Luck.

More Castles in the Sand:

Before you sell, become a home historian

Real estate sales can require scary disclosures

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Castles in the Sand

Before you sell, become a home historian

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

Last week was Halloween, and we talked about disclosing everything, even if not required by law, that might be negative about your home to prospective buyers. What may seem ridiculous to you, like spirits real or not, deaths in the property or other than conventional activities, could be a hot button to a buyer. But do you know everything about your home, the good, the bad and the ugly? Putting your property on the market is the perfect time to delve into your home’s history and a unique marketing tool.

The state of Florida is not known for many historic homes like New York and Boston, dating back to the founding of the country, and even though there were settlements in Florida going back to the Spanish, not too many actual homes have survived compared to the northeast. Bradenton has some beautiful older homes downtown, as do other cities around the state like Jacksonville and St. Augustine, but it doesn’t matter if your home or the home you’re considering purchasing is 100 years old or 20, don’t you want to know its history?

There are professional house historians willing to do research, particularly on older homes dating back to years before records were efficiently kept. They will research public records, church records, history books and even do interviews with local residents who may be familiar with the property. This service, of course, is provided for a hefty fee and results in a nice book full of information for the owners and future owners.

I love the concept and feel that even if your house was built in more recent years, there may still be information about it you don’t know. For instance, who was the architect who designed the house, are the original drawings still on file, and what are the names of the previous owners, an answer which could surprise you, especially in a second home beach area like Anna Maria.

Wouldn’t you just love to know if famous people visited the Island and stayed in your house, such as actors or political personalities? We already know that professional ball players and circus performers came to Anna Maria, maybe they stayed in your home. The possibilities are endless, especially if you can find just the precise person who has been around long enough to point you in the right direction.

A search of the town records would also give you structural information about the home. Were permits pulled to repair damage that could have been from fire or flooding or pest infestation? Did a major hurricane occur in the early years of the home and are there any survivors from that event still around to interview?

You might want to include pre-renovation photos from the time you owned the property, pictures of some things unique to your house like the wall showing how your children grew through the years or a picture from your daughter’s wedding in the yard. Include dates of significant storms and if you evacuated and to where. Brief introductions to current neighbors and some history on the surrounding homes would be a nice touch.

Not only is a history book a great way to introduce potential buyers to your home, but it’s also a wonderful gift to new owners to pass down to future owners. It shows the love you have for your home and keeps the story of the house alive.

Every house has a compelling story to tell, and every room within the house represents a life lived. Make your house one for the history books.

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