I can't imagine that it would be a wise investment for me to purchase a condo with a $380 regime fee. This community takes in a total of $1,0042,000 in total regime fees annually. http://www.montclairpoa.com/pdf/budget_2015.pdf. You'd think it was the Ritz... but it's not. There are two (average) pools, a tennis court and 2 workout facilities. http://www.montclairpoa.com/pdf/regime_fee_explana...
The reason I am even looking at this property is because it's a short sale and because maybe other busy investors would shy away from it because of its issues. The ARV is probably around $165,000 and the "unapproved" short sale list price is $120k. It probably needs $15k+ in repairs and the listing says there are 2 liens and $13,000 owed in assessment costs. Yikes!
I could probably get $1400/month rent. The rental market is great here and this unit is 3 miles from the beach. I think, if it wasn't too risky for me to purchase it, it could make a great vacation/rental property, simply due to it's location. It is also across the street from a fairly new outdoor town center with tons of retail shops and restaurants.
Mount Pleasant, SC is close to beautiful beaches and is a "hot" market right now with expected growth. I have heard that investors aren't really able to find "cash flow properties" in Mount Pleasant... they are banking on the appreciation.
What do you guys think? Would you look further into this property?
@Melissa Searing there are pros and cons to purchasing a condo as an investment property. On one hand, you don't typically need to worry about yard maintenance, community areas, etc. However, on the other hand, you are on the hook for hefty HOA dues and special assessments. Additionally, you never know when dues will increase.
I don't know your market, so it would be unfair for me to critique the actual numbers, but I would not be interested in a deal where the margins are so thin.
Always remember that a "hot" market can get hotter, or it can get ICE cold.....
@Michael Cone @Account Closed Thanks for your responses. I went and looked at the property today. The exterior looks awful on all of the townhouses, except for a few that they have re-done. Supposedly they are re-doing the facades for this phase within the next year or two. I just don't think I can stomach $380 per month for this place in general. It just seems absurd. I spoke with a woman who rents the townhouse next door and she pays $1200 per month. She said she knows someone else in another unit pays $1400. It just sucks that the regime fees are so expensive because the location is killer.
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