Oceanfront condominiums in places like Miami’s South Beach attract many would-be vacation home owners. (Getty Images)
My dream of a beach condo started coming true in June, but it goes back to my childhood. There were big ideas and small opportunities. What was I thinking? A second home is for someone else. One house is more than I can handle.
However, in June my husband and I sold the condo we lived in while our youngest daughter attended graduate school. And suddenly they had money they didn’t need to use to pay for their children’s school fees, orthodontics, and other child support costs. The last child flew away.
Meanwhile, several friends who live near us in the Orlando area, just an hour’s drive from the Atlantic Ocean, were purchasing beach condos. Further motivation is that I grew up in Southern California and spent my summers on sandy beaches as a teenager. Newport Beach.
So timing, friends, proximity, nostalgia, and those freed up funds conspired. When I could no longer keep this crazy dream to myself, I pitched my idea to her husband’s girlfriend DC one summer night, during a rare inning when the Pirates were winning. I shared it. He raised his eyebrows and said matter-of-factly the words I hated. “You need to look at your budget.”
But I was ready for Marni’s math. I explained to him that even if he bought a modest place that generated exceptional rental income through Airbnb, he would never be able to completely break even. (OK, this plan had some big assumptions.) It also promised that I would never stop working for the rest of my life. DC remained silent, but I took it as if a door had opened.
At that moment, a blow came straight from heaven. In July, my friends Chris and Cindy, who are condo owners, went from where I might have told them my dreams to having DC and I spend a weekend at their house and how much I loved the beach life. They invited me to check it out. “We have selfish motives,” Cindy confessed. “We want you to reserve a place.”
DC enjoyed his vacation more than he could have hoped for. (Yes!) We spent the next two months of his life looking at properties with our real estate agent, taking turns discussing and not discussing ideas. Let’s call him Saint Bob. We wanted a two-bedroom, two-bath condo with a direct ocean view (not one where you have to stand on your tiptoes and crane your neck to look out the bathroom window to see a glimpse of the ocean). In our price range. Our first outing proved this impossible.
Over the next few months, we viewed dozens of condos in person and online. It wasn’t nearly perfect, but I bought two and kept looking. Here’s what we learned along the way:
Run the numbers. Before looking for an apartment, I looked into what other costs would be involved in addition to the property price. Cindy and Chris were kind enough to let us know how much we would pay annually after insurance, property taxes, HOA fees, utilities, and rental income minus property management and cleaning costs.
Please consult your accountant. My level-headed, financially conservative accountant has shared many cockamamie ideas with me over the decades and is a great sounding board. When I ran this with him, his answer surprised me. “Good luck,” he said. “It’s a lifestyle. You’ll love it.” He added this caveat: “It’s a lifestyle. You’ll love it.” “But make a deal. One year from the date you close the deal, he’ll sell if either of you wants to sell for any reason. All you need is one vote.” Agreed.
Look under the hood. It’s not enough to just like a property for its views, location, and amenities. We liked the condo enough to want to buy it, but after reviewing the association’s minutes, we discovered that the owners would need to pay a hefty appraisal to renovate the oceanfront balcony. A two-year construction project will shut down rentals for much of that time. The minutes also revealed that many apartments in the complex, including the one we were considering, contained asbestos in the popcorn ceilings. hard pass.
Read your HOA documents. A complex’s bylaws and terms include important details such as rental rules, HOA dues coverage, and pet restrictions.
Talk to other owners. We seriously considered one possibility until we talked to the listing agent who is also the owner of a unit in the complex. He revealed that most building owners frown upon renters. An established property manager acknowledged that the complex is not renter-friendly. If you can afford a luxurious second home that you won’t have to rent out to cover your costs, this type of place is perfect for you. Meanwhile, we continued searching.
Join us next week as we talk about stalled deals.
Marni Jameson is the author of seven books, including Rightsize Today to Create Your Best Life Tomorrow, which will be released on January 2nd. To contact her, please visit www.marnijameson.com.