Condo prices are going down, HOA fees going up. What would you do?

Question

If you're familiar with the condo market in the Tamarac area of Florida, you've likely noticed that prices have stagnated or even started to decline. Meanwhile, HOA fees are skyrocketing, with multiple special assessments rolled out each year to cover various repair costs. These rising expenses are cutting into profits, while property values remain stagnant. I'm starting to consider selling some of my properties as-is, even if it means taking a loss. My intention is to invest in a different state and potentially recover those losses within 1.5 to 2 years. What's everyone else's take on this? I'm curious if anyone has a creative solution I might have overlooked.

Chris Seveney · Answer

The condo market in florida eventually imploding after that collapse and the law regarding inspections of buildings over a certain age was obvious for those looking from the outside. Honestly, sell and sell as fast as possible. That is my recommendation.

Ray Hage · Answer

@Tom Stern You're in a tough spot, I would lean towards selling if you have condos. It's a tough time to be a seller or owner so you might have to sell at a loss if you bought in the last couple of years. Condos are risky now. Personally, as an investor, I never was comfortable with condos because there is too many things that can go wrong with the HOA people. It is a dangerous game without a lot of upside imo

V.G Jason · Answer

Opex doesn't need to be always correlated with market related prices.

Policies are headwinds for your market. Opex are headwinds for your HOA.

I would sell any HOA related property, and re invest in a market that's a bit more appropriate for your desires. This doesn't mean "climate" friendly, no one knows how mother nature works. Asheville was supposed to be climate friendly, see how that turned out.

Corby Goade · Answer

This is why investing in HOAs or condos is usually not a great idea. Special assessments and archtectural controls mean you have very little control over the performance of the property.

I'd sell/1031 in to a property where I could force equity and had control over the performance.

Terra Padgett · Answer

I’m in the Houston market and have a couple of condos and am experiencing the same thing. The HOA fees and special assessments have gotten out of control and there’s very little you can do about it. And the condos don’t appreciate anywhere near as well as the SFR. Along with a mix of other issues at the properties, I’m planning on selling as the juice isn’t worth the squeeze.

Pedro Andrade · Answer

TS you’re definitely not alone in this situation—rising HOA fees and special assessments are squeezing condo owners across South Florida, especially in areas like Tamarac and Fort Lauderdale. Many associations are playing catch-up with deferred maintenance, and with new reserve requirements coming into play, we could see even steeper increases.

Before selling at a loss, consider:

• Rental Strategy: If your building allows it, would converting to a mid-term or short-term rental improve cash flow? Some investors are offsetting costs this way.
• Buyer Pool: Instead of listing traditionally, have you explored targeting cash investors or those looking for value-add opportunities? Seller financing could attract a wider range of buyers.
• Exit Timing: If you’re relocating your investments, would holding a little longer (while offsetting costs with rental income) put you in a better position to sell when the market rebounds?

That said, if your HOA continues increasing costs at this rate without property appreciation, reallocating funds elsewhere might be the smarter long-term move. What market are you considering for reinvestment?

Aristotle Kumpis · Answer

Not sure about condos there, but I have some investors that are selling in Florida because their insurance is 3x more than it used to be. So they are negative cash flow. HOA's mostly go up so that won't change. And with all the safety and weather issues, associations have to increase prices. There are places where people cannot sell their condo because who is going to pay for extremely high HOA and insurance costs? It might make more sense for you to move that out of Florida and into something that doesn't have an HOA.

Condo prices are going down, HOA fees going up. What would you do?

Condo prices are going down, HOA fees going up. What would you do?

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