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Palm Beach Condos and Foreclosures Can Trap Investors - Part 1 HOA Rules
Todd Breen - Sunday, April 22, 2012
This is the first in a series of videos that discusses how cheap Palm Beach condos and foreclosures can be a trap for a prospective investor. Todd and Diana, our Jupiter Property Manager, look for these traps and pitfalls that separate a money pit from a profit machine.
One of the most obvious pitfalls that the investor overlooks is the fact that these cheap places often come with a homeowner association or condo association. These associations are frequently in financial trouble or have rules and regulations that limit an investor’s profits.
The HOA has total authority over what you can and cannot do in your property.
For example, they may:
Not allow you to rent during the first year
Require a high credit score of 700 and up
Limit the number of people allowed in the unit
It is an arrangement you agree to when you purchased your unit - even if you’re unaware of the implications! This can impact the annual bottom line on the investor as these restrictions will hurt the cash flow. There is a mix of such communities in Palm Beach; some have reasonable rules and regulations while others do not.
Financially struggling HOA
Another potential pitfall is when the Association is struggling financially and fails to take care of the facilities. For example, if there is a management maintained pool that is closed due to lack of funds, it becomes hard to rent the property. The potential tenant who comes to see this property will want all the amenities that come with the community. If they are unavailable, it will directly impact the rental value.
Home Property Management knows the good investments
However, according to Diana, there are still lot of communities and areas in Palm Beach that are stable and will provide good rental value because they aren’t plagued by numerous short sales and foreclosures. Some of these identified regions are in Palm Beach Gardens and Jupiter area which is on the north end of Palm Beach County
The discount-priced foreclosures and condos look like a sweet deal but Diana reminds investors to carefully analyze the pros and cons before investing in such properties! Because Diana manages a small portfolio of rental homes and condos, she knows the rental market better than most agents, and is perfectly positioned to help you find the best deals in town!
Ask to speak about Jupiter Property Management by calling 561-624-4663 and press 2.
Home Property Management II, Inc. is a licensed Florida real estate brokerage and is a member of NARPM
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