Real Estate Information |
|
Things To Consider Before Buying a Condo Hotel or Resort Residence
Resort home ownership, such as condo hotels and fractional shares is different from typical home ownership. So it is important to ask certain questions before signing the purchase agreement on a resort property. The following list of questions typically applies to most types of resort property ownership unless otherwise noted. Pricing and Initial Purchase -Is the price negotiable and do you need to purchase through a certain company or representative? Who gets a commission off the sale?Some properties have a small percentage of flexibility in price while others are basically set in stone. This will usually be determined by demand, as well as overall policy of the developer or management company. Also, if you know who stands to profit from the sale and how much, it could help you in your negotiations. -Is the property already completed or is it in pre-construction? This question is important because the answer will likely affect the price of the unit. Many properties in the beginning stages of development will be sold at a discount to attract buyers, but as it becomes a more certain investment or units increase in demand, the price will go up. -If the property is in pre-construction, when will it be completed and what will the overall property look like? You may be anxious to get into your unit or have a certain occasion in mind. If completion is two years out, you may not want to wait. Also, a property in the early stages may look great to someone who wants a small facility with a low-key, less populated atmosphere. But there may be plans for hundreds or even thousands of additional units and large clubhouses, retail areas or other features that will draw many people. If you plan to keep your property for many years, you want to be sure it will fit your needs when it is finished. -How many other owners are there? This question is important for those considering purchases of fractionals. The price and amount of time available each year will depend on the number of other ownership opportunities offered in the particular unit. More than eight or ten other owners will make competition for primetime more difficult. -What type of financing is available for this type of property in general and for this specific development? Both condo hotels and fractionals are considered timeshare properties. Even if they are viewed as a second home, the bank considers all three types of properties discussed here as a secondary obligation - one that is less important than your primary home mortgage. As a result, you may have to pay 10 or 20 % down and the rate may be higher than a traditional home loan. Some developers offer financing, which can be helpful, but be sure you understand the details. Some may require a smaller amount down, but will ask for a large payment upon taking possession of the unit. This arrangement may be fine with you, but you don't want any surprises. Another financing option is to take out a second mortgage on the equity in your existing home. If you choose this route, be sure the interest rate does not make it much more expensive in the long run. Also, you need to be aware that if you use a home equity loan to finance your purchase, you have only 90 days to refinance to a regular mortgage. Information About the Management -Who are the developers? Who will manage the property? The first question will be important in determining the quality and reputation of the property. The second question will help determine if the management organization is well-known, professional, and likely to increase your rental income or resale value. These two questions are critical from an investment perspective. Costs Associated With Ongoing Ownership -What are the ongoing costs and who pays for them? Is there an annual membership fee? There will typically be costs for insurance, real estate taxes, and improvement of the facilities. Although owners generally pay for these items, especially in a condo hotel setting, it is still important to ask. Other expenses to verify include housekeeping, marketing, administrative and general maintenance of the property. These are usually paid by the facility but one shouldn't assume this is the case. Rental Plan & Income Generated -Is there a rental program and is it voluntary? You will want to know if you can choose whether or not to participate in a rental program. This is true for all properties as some hotel residences and fractionals also offer this option as a means of generating income. -How is the property marketed and does it have a history of success or features that will make it competitive in the vacation rental market?If you plan on receiving rental income from your property when you are not there, it is important to find out what the management's experience and approach is. Somebody like Hilton or Four Seasons has a reputation for luxury and good service and will likely attract more renters than an unknown management company. In addition, if the property has a popular restaurant, is located near a convention center, shopping area or other facility that will draw people in, you are more likely to find interested renters on a regular basis. It is important to note that due to the unknowns involved in marketing and renting vacation properties, you should not count on rental income to cover the costs of ownership. Instead, experts recommend that you view this income as a bonus, if and when it is paid to you. The main consideration should be finding a property that you enjoy and will use. -How is rental income distributed? Gain a clear understanding of the percentage of rental income that will come to you, as well as any fees or charges that will come out first, such as furniture and decorating charges, and savings accounts for replacement of items. Some properties offer a better ratio than others. Availability and Usage -How often can you use the property? How long can you stay? How do you reserve time and how far in advance do you need to notify someone?These will be important questions for condo hotel and fractional owners. But even in a hotel residence, you may need to call ahead to let someone know you are coming. Otherwise, your place may not be cleaned and stocked with supplies. -What if you want to cancel your time or reschedule? How far in advance do you need to let someone know? Is there a penalty? Can your friends and family use your allotted time if you're not able to? For condo hotel and fractionals owners, the guidelines that dictate what happens when you can't be at the property are as important as those for when you are using the unit. Be sure there is plenty of flexibility so that you can easily make adjustments and get the most out of your property without being penalized unnecessarily. -Are there other properties in the same management group that you can use?Some properties are managed by companies that have other properties available for you to use as an alternative. This can be an ideal feature, especially if you like to travel or want to share your available property time with family and friends. Amenities and Services -What amenities and services are available for residents and what do they cost? As was mentioned in the previous chapter, it is important to have a full understanding of the services and amenities offered and the charge, if any. Some properties seem less expensive at first, but if you find that you will have to pay for things such as laundry, maid service, and furniture, appliance and decorating upgrades, the price doesn't seem so great anymore. Be sure you know the actual price it will cost you to get the unit with the furnishing you want and the services you use on a regular basis. These expenses are all part of the overall cost of a property. If You No Longer Want the Property -What if you change your mind about the purchase? In response to high pressure sell tactics of some standard timeshare properties, the State of Florida enacted a rescission law that allows you to change your mind about your purchase within a certain timeframe. If purchasing a new property, you have 15 days to change your mind and receive your deposit back. On a resale unit, the timeframe is 3 days. -Can I sell or transfer ownership of my property, and if so, are there restrictions or penalties? There may come a time when you want to sell your property or give it to your children. It is important to know the rules about this before you purchase. Some properties may say that you can only transfer ownership to family members. Others may require you to list the unit through the management company. You may also be required to own the property for a certain amount of time before you can sell. It is important to ask these questions before purchasing. -What is the resale value of the property? In general, the types of ownership we have described have good resale value and are typically much better than that of standard timeshares. Of the three, fractionals are the most questionable when it comes to resale, but the risk can be greatly minimized if you pick an exclusive property with a well-known management company. The resale value of your particular property will depend on several factors, including the reputation of the management company, the number of other similar properties available in your area, the condition of the property at the time of sale, the overall real estate market, and the popularity of your location. Some of these things can't be predicted, but if you do your research it will help you to select a property with high resale value. This list of questions covers many of the different aspects and issues associated with these innovative forms of resort property ownership. There likely will be other questions you want to ask as you become involved in the process. It is a good idea to enlist the services of a reputable real estate attorney or agent who is familiar with the specifics of condo hotels, fractionals, and hotel residence purchases. It may cost you a bit more, but could end up saving you thousands in the end and can provide you with the peace of mind and freedom to enjoy the experience and to feel satisfied with the process and the terms of the final purchase. For more on finding and buying the right condo-hotel, check out Make Your Next Home a Resort, the 2005 Guide to Condo-Hotels, Fractional Shares and Resort Residences. You can download the Guide as a pdf file at http://www.InvestingIN.com/realestate/resorts/resort4u.htm Leon Altman is the founder of the InvestingIN Real Estate Letter - http://www.InvestingIN.com/realestate/LtrSignup3.htm - and its parent website, http://www.InvestingIN.com - which provides articles and newsletters about opportunities in different areas.
MORE RESOURCES: Celebrity real estate agent Mauricio Umansky explains when housing prices will come down Fox Business Tortured Poets or Real Estate Rock Stars? Taylor Swift's Past Boyfriends—and Their Incredible Homes Realtor.com News Banks Believe They Are Well-Prepared for Commercial Real Estate Fallout The Wall Street Journal Downtime: Pairing wine and real estate RichmondBizSense SAGE Investment Real Estate Advisors sells 24-unit Bergen County garden-apartment complex ROI-NJ.com Blackstone Earnings Rise as Investment Giant Projects Commercial Real Estate Recovery - CoStar Group North Hampton home, New Castle condo top Seacoast sales in record-slow market: Here's why Seacoastonline.com Richland County OH real estate transactions recorded April 5-12, 2024 Mansfield News Journal 21 Largest Real Estate Companies in the World Yahoo Finance Welcome to Real Estate Friday! theberkshireedge.com RI real estate transactions: What homes sold, for how much and to whom The Providence Journal CRE Broker Magazine: a New Beacon for Commercial Real Estate Professionals Announced by Massimo Group Markets Insider Big Tech Is Downsizing Workspace in Another Blow to Office Real Estate The Wall Street Journal Picture windows, solar panels drive price on Lake Keowee | Real Estate The Post and Courier Banks' Commercial Real Estate Risks Are Uneven Federal Reserve Bank of Kansas City This $16.4M beachfront SC home has a walk-in closet likely bigger than your bedroom. Take a look The State Real Estate Directory for April 19, 2024 The Garden Island $2 million home for sale on Stone Lake in Greenville | Real Estate The Post and Courier Real Estate Briefs | April 19 | News, Sports, Jobs Cape Coral Breeze REAL ESTATE | Spring Storewide Sale underway at General Store Antique Mall in Kewaskum, WI washingtoncountyinsider.com First Real Estate Investment Trust of New Jersey (OTCMKTS:FREVS) Shares Pass Below 200 Day Moving Average of ... Defense World Prologis Warns of Slowing Industrial Real-Estate Market The Wall Street Journal Real estate transactions: Week of April, 2024 | Construction / Real Estate | insidetucsonbusiness.com Inside Tucson Business EquityMultiple Bullish on Industrial Real Estate Sector, Brings Opportunity to Individual Investors AccessWire Inked: Recent LI real estate deals Long Island Business News Mike Wyatt honored with Lifetime Achievement Award for brokerage career, community support - Dallas Business Journal The Business Journals Motley Fool: Investors could trust real estate The Spokesman Review Real Estate Minute – 04-18-2024 KFDX - Texomashomepage.com WHO?! This Southern Utah Town Is A Real Estate Hot Spot! Cat Country 107.3 and 94.9 How to track your rent payments in Miami — which could lead to a mortgage to buy a home Miami Herald Office market collapse: Commercial foreclosures spike 117% in a year Business Insider The Loop Dallas earns Best Real Estate Deals distinction - Dallas Dallas Business Journal Real estate mogul concerned how Americans will deal with squatters: ‘Something really bad is going to happen’ Fox Business Inside PROFILEconnect 'A Night at The Museum' Real Estate Impact Conference at the Coral Gables Museum PROFILE Miami China home prices slumped in March as property crisis drags on Business Insider Tom Burrell selling South Loop condo Crain's Chicago Business Bronx real estate sales drop across the board, though spring market may be more active: report – Bronx Times Bronx Times A new real estate trend? Shopping malls converted into residential units in South Florida NBC 6 South Florida Fannie Mae, Freddie Mac clarify real estate commission rules National Mortgage News TikTok’s Origin Story: Court Files Show Role of GOP Megadonor Jeff Yass The New York Times Google's Strategic Job Cuts Reflect Ongoing Cost-Cutting Measures, Affecting Real Estate and Finance Departments Yahoo Finance Will It Be a Pricier Housing Market in Spring 2024? Norada Real Estate Investments The Real Estate Top Performers share tips for buying or selling a house in today's market! WUSA9.com California, United States Luxury Real Estate Home California Listings Blackstone Real Estate Earnings up 15% in First Quarter The Real Deal Former HGTV star from Los Gatos sentenced in $10M real estate fraud case CBS San Francisco Look inside open-plan condo in Palm Beach with unusual rollaway walls Palm Beach Daily News Seth Samowitz Takes Helm as COO of Bob Knakal's Innovative AI Infused BK Real Estate Advisors in NYC Markets Insider Documentary shows roots of segregation were planted in Chicago Tribune Arizona Coyotes owner cares more about real estate than hockey The Arizona Republic Why you might not need a real-estate agent when buying a home Business Insider Boise Real Estate Market Steady Amidst California's All-Time Low KIDO Talk Radio |
RELATED ARTICLES
Find Out If There Are Sexual Predators Nearby Before You Buy A Home or Property! When looking for a new home or property, buyers ask many questions. Typical questions might be about the history of the property, property tax amounts, the school system, proximity to medical facilities, shopping malls, etc. Five Things to Help Sell Your Home Fast, and For More Money Selling your home requires some thought and a clear plan of action. Here are five things to consider when you're getting ready to sell your home:1) Know Your BuyersAre most of the homes in your neighborhood being bought by first-time or move-up buyers? Depending on which group will be looking at your home, you'll want to do the things that will make your home appealing to those buyers. Utah Real Estate Looking to buy real estate in Utah? The market has changed over the past few years and is going to continue to change over the next few (drastically) and here are a few things you should consider before buying any Utah real estate.First, the Olympics didn't affect the state as much as people thought it would. Mortgage Broker Training: How to Secure Loyalty From Realtors So you've just returned to your office after delivering an Oscar worthy presentation to a real estate agent. They're impressed and ready to do business with you. What You Can Do To Sell Your Home Fast Yes, you want to sell your home and you want to sell it fast. It may be a seller's market and every other home in your neighbourhood is selling and you think it's going to be a cakewalk selling your home. How To Sell Your Home FSBO You decide to sell your home and believe you can handle the selling process. Good for You!Of course you're a little nervous and that's normal. According To Sellers, Silence Isnt Always Golden' When trying to sell a home, silence isn't always golden especially when you're expecting your real estate agent to call. In fact, it's one of the leading complaints among sellers in the real estate market. Renting Versus Buying A Home Renters are often in a quandary as to whether it makes sense to continue renting or buy a home. Buying a home makes more sense, particularly when taking a long-term view. Selling Houses: Cutting Edge Design Tips for Selling In this article, you're going to discover new techniques for marketing houses, and you'll find that these fresh, new interior design ideas will help sell your home faster, and for a higher price than the competition!Buyers' physical senses respond to a home's design, and what a buyer feels is based upon their psychological reactions to sight, hearing, smell, touch, and even taste. Design Psychology employs new strategies in interior design to entice buyers. How to Buy Fixers for Profit Do you dream of becoming a multi-millionaire real estate investor? Here's how to get started: find a bargain "fixer-upper" owned by a worried seller. The hardest house for a homeowner to sell is a "doghouse," "dump," or "fixer-upper. Real Estate Investing: Sales and Negotiation Skills are Critical Do you want to build wealth through real estate? You need expertise in two critical areas: specific investment strategies and sales and negotiation skills. But if knowing how to identify good deals is what's really important about investing in real estate, why do investors need to worry about their sales and negotiation skills?"Knowing how to identify good deals is certainly a critical part of real estate investing, but it's not the only part," says Russ Whitney, internationally recognized real estate expert and bestselling author of Millionaire Real Estate Mentor (Dearborn Trade Publishing). Expenses of Home Ownership Hopefully all goes smoothly when you purchase your home. In your anxiousness to become an owner it may not have crossed your mind and no one tells you, your'e not done spending money on this transaction. Negotiating A Short Sale - The High Road to Huge Foreclosure Profits Buying foreclosures can be extremely profitable for real estate investors. However, most of these homeowners are mortgaged to the hilt. Staging Homes for Top-Dollar Sales Wouldn't it be nice to have Roger Hazard's design team from "Sell This House" come visit for a weekend?Many "redecorators" and designers offer "Staging Homes" services from $250 to $5,000. These services usually give good advice, some help with the actual work involved, and others even move in new furniture for you. Investment Property Part 2 of 2: What You Need to Know Before You Buy Welcome to the second portion of a two-part series on investment property. In the first installment, "How Not to Become a Slumlord", we discussed a little of what it takes to own and operate a property as well as some of the do's and don'ts of the property management trade. Real Estate Investing: How to Choose a Lender To become a successful real estate investor it's vital to have a long-term relationship with a good lender. Having a flexible lender who knows your needs and objectives can be the difference between success and failure in your investment career. Cutting Edge Real Estate, Is the Bubble Ready To Burst? Of course, this is the big question in real estate now. . Russ Whitney and Real Estate Investing Gurus There is curently a huge real Estate boom in America today. Little does the world know that this boom has some to do with all of the real estate guru's out there. How to Prepare Yourself for Owning a Dual Purpose Second Home If you are thinking about buying a second home, you are not alone. A 1995 survey by the American Resort Development Association found that 60 percent of households surveyed feel they have a likely chance of purchasing a recreational property in the next ten years, a figure that rose 30% from the survey in 1990. Buying an Unfinished Home Maybe Your Answer For the first time "want-to-be" homeowner, purchasing an unfinished new home maybe just the answer. With mortgage interest rates still at record lows, there has not been a better time to purchase a home in decades. |
home | site map |
© 2006 TIGER MEDIA |