Hi NJ BP Forms,
I was wondering if there are any of you out there that invest in Condos in Atlantic County? I'm looking at purchasing a rental condo there and I'm interested in what the key factors are that drive your decisions. I have a rental duplex already in Gloucester County and I get that condos are a completely different game but want to know what other investors value in Condos.
I get the basics that you want to know the history on the Condo/HOA fees and the history on assessments filled but what else should an investor looking to get into condo focus on?
I'm looking at AC, Margate, and Ventnor.
PS: Any, gotcha's, Atlantic County presents is also appreciated!
I believe fennie/fradie didn’t allow more than x% of condos in a complex to be rentals so if that is still true be careful with that when looking at condos.
If more than 50% of units are rented out or more than 10% of units are owned by the same entity the condo will not be fannie compliant which could hurt you upon resale or be a drag on appreciation in general. You can probably find lenders to make exceptions but it's not ideal. Take a look at the rental policy and application. Most HOAs will have application, credit and move in fees and depending on the price point those could make the net effective rent much less attractive. I would take a really close look at lifespan on any major capital improvements like roof, boiler, elevator replacement, repointing, etc as those could really throw a wrinkle in your cash flow.
We have a condo at Ritz Condominiums in Atlantic City, it has been in our family for over 20 years. Their HOA fee is very high and considering the age of the building (fun fact, Board Walk Empire Series HBO, the main character Nucky Thompson actually lived there) there always seem to be increases for added repairs. In the mid 2000's they constructed a indoor pool and jacuzzi, a very nice amenity for residents but they increased the cost of the HOA for 3 years to pay for it. Recently, they just finished an exterior brick concrete re-facing 17 floors up which raised HOA again 4 years. A word of caution, you are always at there mercy of HOA, and in general the older the building the more repairs it will need which is not ideal for an investor. Personally, I would not purchase a condo for cash flow, its just too un-predictable, I rather stick my money in a small MF that I am in control of in a B/B+ class neighborhood.
The Ocean Club in Atlantic City is newer but I cannot comment on their HOA.
Lately, I have been curious if Air-BNB is allowed at the Ritz. I do know they allow summer rentals for 2 weeks, but unsure if AIR BNB is allowed. I wouldn't be surprised if it is not, HOA at the Ritz is very strict. There's a sign in the entrance that says if you get the hallway wet from coming back from the beach or pool, you will be fined $100.
I own a property in Gloucester County, Glassboro near Rowan U, my alma mater. Lots of development in that town with the construction of the new hospital and some investors I spoke with are coming into the area.
@Mike Bonadies the HOA docs are always important to review closely when buying investment properties in Atlantic County. Most try to limit short-term seasonal rentals as much as possible. As @Antonio Porta said the Ritz requires a two-week minimum. I have seen eight-week minimums in Margate. I have had a client find success in renting a condo to year-round tenants. The client was retired and using the rent covered their HOA dues and property taxes (in NJ) while splitting time between a unit in Atlantic City and wintering in Florida.
It largely depends on what your goal is with the property to know if it is really worth making investments in Atlantic County versus other South Jersey areas.