Just a few short years ago waterfront condos in South Tampa were some of the hottest properties in the nation; now even luxury beachfront condos have experienced dramatic downturns as borderline buyers default.
Rising foreclosure rates impact more than just those the original owners; it impacts the entire community. Before purchasing a Tampa condo or other luxury real estate take time to perform a bit of investigative work to make sure you are buying into a reputable area able to withstand the current downturn. Here are the most common pitfalls to avoid and what to do to protect your investment:
1. Rising Association Fees. South Tampa condos with large numbers of foreclosures are forced to increase association fees charged to the remaining owners. General maintenance, upkeep of community areas and other costs must be paid by a dwindling number of owners. Understand the current fee structure and be actively involved in the decision-making process to understand where the money is going.
2. Reduced Resale Rates. Condo’s with excessively high rates of foreclosures may find the value of the remaining property valued less than expected. Remember, comp rates are heavily impacted by the most recent sales data for the area so always insist upon an up-to-date sales data from your real estate agent or broker.
3. Restrictions. Fewer association fees and lowered property values are pushing some condo associations to enact more stringent restrictions designed to curb the number of rental units, resale restrictions and other measures. These proactive measures are often for the benefit of all involved so actively participate.
4. Reality. Sometimes it seems everyone has money but how much is real wealth versus borrowed debt? The answer might surprise you! According to the U.S. Census Bureau, the nationwide distribution of households with annual incomes Over $250,000 includes:
• African-American 43,000 households with an average household income of $556,965
• White 1,194,000 households with an average household income of $465,786
• Hispanic 46,000 households with an average household income of $378,087
• TOTAL 1,305,000 households with an overall household income of $464,536
Superficially the numbers may seem impressive but closer examination reveals a few unsettling facts; the numbers are nationwide but the ratio’s indicate that very few household’s can actually afford luxury condos or other real estate. Before purchasing a luxury condo take time to investigate the household income for the area; make sure your neighbors can afford the homes they are buying. It will protect your investment and make sure you are obtaining the best possible price.