Thursday, April 16, 2009
Why rental restrictions matter
In this post I'm going to address an often-overlooked, yet very important issue that condo buyers need to understand before they begin their search for the perfect condo at the beach. If you're already a client, you know the drill and have heard the sermon, so, you can just skip to the quote.
In addition to amenities, view, association health, building condition, parking and all the other items that a condo purchaser should review, a prudent buyer also needs to understand the implications of rental restrictions and how they will affect his use and cost of ownership. Cocoa Beach and Cape Canaveral condominiums evolved in a different direction than many coastal Florida communities with the vast majority of condos here restricting rentals to a minimum of at least one month and ranging up to 12 months. The number of ocean complexes allowing weekly rentals in Cocoa Beach and Cape Canaveral is only about a dozen. The rental habits of our visitors makes these particular complexes the overwhelming best choice for owners who want the most flexibility for mixing personal use with income or for investors who want the maximum income possibility.
We have two distinct visitor seasons here, snowbirds in the cold months and vacationers in the summer. Our snowbird visitors typically stay for periods from a month to several months. Our summer guests are predominantly one-week vacationers. For condo owners in a 3-month minimum rental building, chances are high for finding a renter for three months or more in the January through April period, but finding a 3-month renter during the rest of the year can be difficult if not impossible. An owner of a weekly rental can usually count on renters during the entire year although much slower in the Labor Day to Christmas period. For owners of units with a six month or longer minimum, the choice is usually between a long-term tenant, which takes away the personal use option, or not renting at all to leave it open for personal use, which takes away all income.
For those not wanting or needing income, complexes that have longer rental periods may be preferable as they are typically quieter with more permanent residents and less visitors and the facilities like pools and tennis courts are less crowded.
If you're looking for a condo, determine in advance what your needs are for income and/or personal use and narrow your search to those complexes that match rather than finding out after purchasing that your plan of having a great beach getaway that also spins off a little income isn't realistic. If your buyer's agent hasn't asked you about your needs in regard to use and income or hasn't briefed you on the implications, fire her immediately. Why work with Eliza Doolittle when you can have Marie Curie?
You know, it occurs to me that the best way you hurt rich people is by turning them into poor people. ___Billy Ray Valentine