Beach and other vacation condominium units have experienced unprecedented devaluations. This offers what may be some super bargains. However, don't fall into the assessment trap.
Condos work like this: A developer builds a big building and sells space in that building. When you buy a condo unit you buy space, typically from the paint or sheetrock in. The mechanics of the building and the cost of maintaining the building are shared by all of the owners. For example, the roof does not belong to the penthouse. It belongs to everyone. So does the parking lot, common spaces, elevator, lawn, etc. The cost of maintaining the building is shared by all.
When shopping for a condo, the real estate agent usually discloses the association and maintenance fees. Those are the fees that the current owner has recently been paying. Two pitfalls exist. While some states (Florida) require that the association budget certain future costs, they don't require that they fund them. Consequently, if the roof needs to be replaced the year after you buy the unit, you may be paying your share of the full price. The same applies to parking lot resurfacing, and any other improvements or repairs that may otherwise go unseen. Special assessments can easily be in the tens of thousands of dollars.
Secondly, in these uncertain times, developers and tenants are finding themselves unable to afford or sell their units. If they can't sell the unit, then they can't pay the assessments and dues. A bankrupt developer that still holds half the units will not pay his share of the fees. That means that the other owners have to step up and double their fees to keep the condo operating. A building is just a big machine. It costs money to operate. If the some tenants can't pay their share, others have to. Beware of bankruptcies and low occupancy. Ask for the association financial statements. And yes - we do that too! Feel free to call or email us for a quick review of the documents and accompanying financials. Don't pay for someone else's disaster.