Are you purchasing to rent, rent and personal use, or personal use only?
It is very important to decide if you are renting or using your new condo for rental investment. This will effect your taxes and how you finance your condo. Also, if you choose to rent your condo, ask your tax attorney or CPA about the GO Zone Opportunity for tax benefits.
What is a condo association?
Each condo development has a condo owners association. This association has a governing body called a Board of Directors. The Board has a President, Vice-President, Secretary and Treasurer who are nominated and voted on by the owners. The Board will make sure dues are collected, determine how they are spent, and provide to all the owners the financial statements. The board is very important when emergencies arise so get references on the Board of a condo development when you choose to purchase.
What are condo fees or association dues?
Each condominium development has condo association dues or sometimes referred to as condo fees. The fees are collected from every unit owner on a monthly basis. This fee pays for the following:
Insurance for the building including all common areas.
Maintenance and upkeep for the building and all common areas (including pools).
Security for the complex.
Certain utilities including but not limited to:
Water, cable, DSL (some developments but not all).
What area or location on the Gulf Coast are you going to purchase a condo?
The Gulf Shores - Orange Beach - Ft Morgan - Ono Island and Perdido areas are very similar yet completely different. Rentals are greater in some areas than in others, therefore it is pertinent to decide which area best suites your needs. Beachfront will always rent better therefore you will pay more for beachfront. Other areas will be less expensive due to location. As the old saying goes, Location, location, and location!
Why do buyers create a LLC (Limited Liability Corporation)?
When an investor purchases a condo, the majority will purchase the condo under a LLC (Limited Liability Corporation). The investor is reducing their personal liability, saving on taxes, transfer ownership easily, and numerous other advantages. This is especially important when multiple investors purchase one condo. Please contact an attorney for details.
What about hurricance insurance?
Insurance for the building is included in the condo association dues. Condo owners need to purchase content insurance to cover their personal property and liabilities on their individual unit. You may hear the term "paint to paint", you are buying the contents within the walls of the condo, everything outside the paint is maintained and insured by the condo association.
What about rules and regulations concerning the condo association?
The condo association will furnish a written "book" of condo documents. This will detail the rules and regulations of the condo, and all the legal details concerning the association.
What does rent restricted mean?
A rent restricted condo development means the condos can not be rented. Some condos are rent restricted for 30 days which means rentals must be a minimun of 30 days. Other condo developments do not allow rentals at all. This is a benefit for those investors/buyers that are purchasing a second home or for personal use only.
