Page 90 - New Agent Real Estate training book

areas, pools, elevators, and insurance for storm and flood damage. Because there are so many
amenities in buildings like these, the HOA fees are higher than what you would find in a regular

condo building. HOA fees can average $1-per-square-foot-per-month on the ocean front. For
example, a 1-bedroom condo that’s roughly 500 square feet will average $500 per month in
HOA fees. A 2-bedroom unit is 850 square feet, and roughly $900 per month. However, this
fee includes many costs. For example, here your monthly HOA fee includes electric bill for the
unit, cable, internet, water, trash, elevator, pools, security, all amenities, and insurance on the
building which is a great relief for owners. The only thing you will need outside of the HOA is
interior insurance called HO6 Policy, which is usually very cheap.

Because monthly fees here are higher, that’s why most owners choose to rent their units
whenever they’re not using it. You can choose whichever rental company you like, but for first
time condo owners I always recommend the on-site rental desk. There are numerous
advantages to being on their program. On average you get a better gross rental figure, access
to walk-in clients, and it’s very hands off. The on-site rental agency charges a 60/40% split, with
60% of rental going to the homeowner each month. For their 40%, they find the guests, book
the rooms, clean the units, handle any issues, and direct deposit your cut of the rent. They also
have a long track record of renting in this building. If you were to select the right unit, and rent
it out on-site, I am confident over the course of a year your portion of the rental should cover
all your HOA costs, insurance, and property taxes. The unit will pay for itself; however, these

units will not produce enough income to cover any mortgage or carrying costs. If you pay cash
the unit will cover it’s expenses, if you finance you will have to cover the mortgage costs, but
everything else should cash flow. And any expenses on the unit can usually be deducted on
your taxes. (Check average rentals figures for each unit type, only give estimates, confirm any
rental figures in MLS with rental agencies or listing agents)

Regarding any rental numbers, as a buyer the only figure you should be concerned with is the
gross rental for the year. Nightly rates are always changing, but gross rental numbers will give

you a good idea of what a unit will produce in rent over the course of a year, which is more
important than a nightly rate. Realize that the bulk of the rental numbers will come during the
spring and summer, which is why many owners choose to use their unit during the off season.
You could occupy your unit the entire fall and winter season and not risk losing much rental
income. Anytime you want to use the unit, just call your rental agent and block out the time for
yourself, your family, or friends. It’s is very easy to use.

Every owner is responsible for maintaining their individual unit. When you purchase a unit, it
usually comes fully furnished (check MLS) from the furniture to the plates and glasses in the

sink. The on-site rental company offers packages to upgrade your unit furniture and fixtures
periodically for a reasonable price. Owners can choose to upgrade if they wish, but you are not