List of questions to ask HOA in So. Florida
Member since 2024 · 6 posts · 2 votes
Looking to do a deep dive into HOA's of potential condos I plan on purchasing in So. Florida area. Does anyone have a comprehensive list of questions I shoud be asking of the HOA so I do not miss anything important! ? Thanks!
I don't have a list for you but the most important thing to look at is their financials and rules/regulations. I can tell you most are not very well-managed financially or otherwise so be sure to do your due diligence. Are you buying as an investor or as your primary (or both)?
I don't have a list for you but the most important thing to look at is their financials and rules/regulations. I can tell you most are not very well-managed financially or otherwise so be sure to do your due diligence. Are you buying as an investor or as your primary (or both)?
Thanks! I am an investor - previously in the short term rental market and looking to get into long term market- great $ in STR, but looking for something more slow and steady.
We've owned a several condos in Denver, Colorado. Here's a starter list of questions to ask your HOA before buying. Your agent might have more for your specific area.
-- This is a BIGGIE. Is the HOA having any problems obtaining insurance? Here in Colorado, wildfire risk has pushed several carriers away and with less competition, premiums have shot up for several HOAs, like this one in Castle Rock, just south of Denver.
-- Do they have a report of capital repairs needed over the next 5-10 years? This will lay out big-ticket issues they anticipate, potential costs and how they will pay for it.
-- How many times have dues increased in recent years? Does the HOA like to pay for items through due increases or special assessments?
-- How many units are rentals? (You want less than 50%, but it's good to know if they're getting close, because if they are your HOA might have rules against you renting.) Does any one owner own more than 10% of the units? These are criteria for condo warrantability. See below.
-- Is the building warrantable? Fannie Mae and Freddie Mac have guidelines for lending to buyers in condos. If a building doesn't meet the criteria then buyers can't get an FHA or VA loan there, which might restrict your potential buyer pool if/when you go to sell. And again, the condo -- to protect its warrantable status -- may restrict the number of rentals.
Good luck in your new venture!
This is so great and helpful! Thanks for taking the time:)
Hi, I'm not an expert on this but do own a rental condo in Delray Beach.
Recently the HOA was required to complete a new reserve study in order to keep a minimum percentage of reserves. I can't say for sure I know where this requirement came from but I believe it was the new act that came in following the collapsed building and i think insurers are requiring it.
I don't know if you live in Florida, but the insurance market is a shambles. At one of the meetings I learned that there is almost one insurance company covering Florida, Citizens. There may be others but many have dropped out.
You should also be aware of the surfside regulations passed in Florida after the building collapsed on Surfside beach.
'Key mandates of the law include: Condominiums three or more stories tall must have a “milestone inspection” of structural integrity at 30 years of age, and every 10 years thereafter. Buildings located within three miles of a coastline must first be inspected at 25 years, and every 10 years thereafter.' This has been a big deal. Many of these condos have not been reinspected and will be required to carry out any structural improvements required. Many condos including mine, still haven't done it in the belief that they may change the law. Many people have been hit hard with an assessment and or have sold. This makes it difficult to sell ( though I am not) but probably only to cash buyers. I doubt you would be able to raise a mortgage on it if it has not been done or at least in the process of having been inspected and remedied.
Read these two and you have an idea.
https://eu.pnj.com/story/news/2024/01/16/florida-hoa-fees-ar...
https://www.bdcnetwork.com/floridas-surfside-inspired-safety...
Having said all that the rental rates are high, so you can still make some good returns.
So I would ask for all the evidence on the above. and maybe for the minutes of the last 2 or 3 meetings.
Good luck.
Oh! Also annoying is that many require a minimum period before you can rent out the condo. Each is different but, often its one or two years. Then, as in mine, there can be restrictions on how many times in a year you are able to rent it out. So not great for the holiday let market. Houses are better but still some zones such as Boca Raton don't allow air bnb rentals on homes.
But if the property is in a good location, you can rent it out in season for double the yearly monthly rent. But usually the renters only want 3-5 months during season. But you can double it and holiday in it the rest of the year!
Nancy- this info is great- I appreciate you sending it. This explains why past properties Ive owned had "low" HOA's and everything Im looking at has been through the roof!
Also if hands off out of state like mine, you will need an air conditioning contractor to check the AC every 6 months, aoubt $290 annually plus and parts after inspection, a property manager contract to fix the white goods or boilers etc. I pay around $340 a year. And a handy man that will do call outs. I have had 3 call outs for fixing things last year about $500 total. It all works just fine.
You need to give 2 months notice to tenants to vacate and they only need to give one. A Florida lease is also no longer than 1 year.
yes, it quite crazy. But there may be some opportunities to pick up cash bargains or do a buyer lease back to someone who wants to stay but maybe can't afford the assessment coming up if you absorb it. Many are retirees who simply can't afford the new rates and the lump assessment coming up which in our case we still don't know what it is! There is one condo in my building that I would like to buy but don't have the funds now. I think it is it is pretty good value. For some reason out building is undervalued when next door you can find double the price for smaller sq ft. This one is 1500 sq ft. quite big for a condo. I can send the link if you like. It is not my listing.
I'd love to take a look. Not sure how to get you my info on here, since the email I posted got bumped back. Its my first time using this website.
Thanks!
Looking to do a deep dive into HOA's of potential condos I plan on purchasing in So. Florida area. Does anyone have a comprehensive list of questions I shoud be asking of the HOA so I do not miss anything important! ? Thanks!
STAY AWAY from FL, there is a big correction coming, and it will start with the condos. IF you get get them for about 20% -30% less then the current ask you should be ok. but I will not touch it. All the special assessment are killing it and the old hags on the HOA :)
https://www.zillow.com/homedetails/555-Banyan-Tree-Ln-APT-30...
I agree there may be a correction coming, but rents also shot up too. About the old hags. I don't mind them. They work to keep the HOA's a reasonable cost amidst the influx of new cash tenants with deep pockets who may want to turn the club house into a Nikki Beach club.
There was an influx of cash buyers into Florida during covid. When I started looking in March 21 to March 22. Many prices nearly doubled. There were sharky NY investors who would buy ( go under contract) and flip with a 50%-75% increase even before closing, and sell to another. And some viewing were like waiting in line to get into a night club.
The one above is right next to Fresh market and Trader joes. Walking to the avenue of downtown and walk to beach. But again. We don't know what the assessment is. Can rent right away, 1 x per year. again. Ive got no skin in this one, but i like the building and I'm looking all the time. try to find other 1500 sq ft in delray.
Looking to do a deep dive into HOA's of potential condos I plan on purchasing in So. Florida area. Does anyone have a comprehensive list of questions I shoud be asking of the HOA so I do not miss anything important! ? Thanks!
Avoid HOA areas. Florida is tasting some of it's own blood in their mouth with the HOI issues, the HOA issue is just going to make it work. Best not to invest in HOA areas.
I agree, the HOA is huge determinant and it seems the sky is the limit down there. Also the property taxes are extremely high for properties especially as a non homesteader. I've been looking there since I bought and there are hardly an deals to be found. For me it was an accidental covid purchase as I was stuck there from the UK for 2 years ( a long story not for here.) So, I renovated it and ended up renting it with a high rent and went back eventually. But when inflation comes down I am not sure I can maintain the same rent. As a true property investor, the numbers may not work. I'm netting 8% but I was a cash buyer. if you add a mortgage maybe it doesn't work. So for now, for me that is fine. Better than the money markets. I got a good divorce deal and probably got the right price before everything jumped.
I'm selling up in California now and looking for new investments. I've started this program to make wise choices. The rental market in the UK where I am now is a disaster so I think I will keep invested in the states.
As a local I can tell you prices are super inflated here at the moment and the numbers don't make sense 99% of the time unless you find a needle in a haystack
yes, it quite crazy. But there may be some opportunities to pick up cash bargains or do a buyer lease back to someone who wants to stay but maybe can't afford the assessment coming up if you absorb it. Many are retirees who simply can't afford the new rates and the lump assessment coming up which in our case we still don't know what it is! There is one condo in my building that I would like to buy but don't have the funds now. I think it is it is pretty good value. For some reason out building is undervalued when next door you can find double the price for smaller sq ft. This one is 1500 sq ft. quite big for a condo. I can send the link if you like. It is not my listing.