OT: Condo purchase

[theoriginalSALTYdog]

Anyone here own a condo in the Gulf Shores / OB area?

Mrs. Salty and I are "potentially" looking at purchasing something that we could use as an investment and then when we retire a place to go as we see fit.

For those that own or have owned what advice would you give me?

FYI, this property isn't beach side, rather across the road on Perdido Beach Blvd.

 

[OG Goat Holder]

It’s really not the best time to buy, honestly. Waaaaaay high. The coast market goes up and down enough that the phrase “today is the best day to buy” doesn’t always apply like it usually does with residential real estate.

 

[patdog]

I thought about buying one on Dauphin Island a few years ago. But hurricane & insurance risk is a bit much for me. I’d rather just rent when I want to go down there.

 

[theoriginalSALTYdog]

It’s really not the best time to buy, honestly. Waaaaaay high. The coast market goes up and down enough that the phrase “today is the best day to buy” doesn’t always apply like it usually does with residential real estate.

This unit has a very "motivated" seller who has lowered the price big time so even w/higher interest rates it's a great deal.

 

[John Deaux VII]

I've got a ways to go, but if I had to pick my retirement spot today it would either be the Alabama coast or the Pensacola / Perdido area, but definteily not directly on the beach. I hear insurance is a pain in the *** though.

 

[OG Goat Holder]

I've got a ways to go, but if I had to pick my retirement spot today it would either be the Alabama coast or the Pensacola / Perdido area, but definteily not directly on the beach. I hear insurance is a pain in the *** though.

Flood insurance is flat out impractical. May not matter as much with a condo but I bet the HOA is tied into that somehow.

 

[RocketDawg]

Anyone here own a condo in the Gulf Shores / OB area?

Mrs. Salty and I are "potentially" looking at purchasing something that we could use as an investment and then when we retire a place to go as we see fit.

For those that own or have owned what advice would you give me?

FYI, this property isn't beach side, rather across the road on Perdido Beach Blvd.

One of my golf buddies just bought a condo in the Gulf Shores/Orange Beach area. It's a block or so away from the beach. He plans to spend the winter months there and be able to play most any day. He doesn't plan to rent it out the rest of the year. But - it's expensive. The HOA/condo fees run him about $1000/month year round, and he'll only be there three or four months continuously, and then sporadically during the rest of the year.

 

[ababyatemydingo]

Anyone here own a condo in the Gulf Shores / OB area?

Mrs. Salty and I are "potentially" looking at purchasing something that we could use as an investment and then when we retire a place to go as we see fit.

For those that own or have owned what advice would you give me?

FYI, this property isn't beach side, rather across the road on Perdido Beach Blvd.

Only advice I can give you is to buy in Alabama and not Florida. Taxes and insurance will eat you up in FL. HOA tends to be higher in FL too. Although HOA is gonna be high most anywhere.

 

[patdog]

Only advice I can give you is to buy in Alabama and not Florida. Taxes and insurance will eat you up in FL. HOA tends to be higher in FL too. Although HOA is gonna be high most anywhere.

I’d stay away from Florida. 1,350 miles of coastline vs 53. And your insurance rates will pay for hurricanes whether they hit you or somewhere else in the state.

 

[TheDawg-Pound]

Not to mention you have to update furniture every so often if you rent. I wouldn't do it to make money, only to pay itself off to have a place down the road.

 

[patdog]

Not to mention you have to update furniture every so often if you rent. I wouldn't do it to make money, only to pay itself off to have a place down the road.

From what I’ve seen the one person who makes money when you buy a vacation condo & rent it is the property manager. It’s a break even game. Maybe a little better. But when a hurricane hits, you’re gonna be in for some big costs.

 

[PK Dawg]

You’ve got two Texas Roadhouse options. If you’re closer to Gulf Shores, then the Foley TRH (tier 1 TRH) will be your go to. The closer you get over to perdido key, the Pensacola TRH (tier 2) might make more sense for you and the misses.

Hope that clears everything up for you. Always nice to have another dog in the panhandle.

 

[Dawg1976]

I bought in OB in 2014 when prices were still depressed. But I wouldn’t buy today. It’s very difficult to be fully insured. I toss around the idea of selling but I still enjoy going down regularly. And I’m geezer so might as well enjoy what time I have left. That’s my thinking for now anyway.

 

[HRMSU]

I would like to buy one at the Beach Club in Ft. Morgan. No way they don't cash flow.

 

[ronpolk]

Only advice I can give you is to buy in Alabama and not Florida. Taxes and insurance will eat you up in FL. HOA tends to be higher in FL too. Although HOA is gonna be high most anywhere.

This may be true…. But would you rather be sitting and looking at the brown water of Alabama or the pretty clear water in Florida? Only kidding a little bit there. As someone who has owned property in Florida, taxes are no joke. My insurance was not bad but I lived a few miles inland.

 

[BigBully]

I own a condo in PK and live here full time. A couple of things you need to know or ask the condo association is:

1. Know the rules for rentals. We only allow 7 day rentals. Some owners try to skirt the rules and do less than 7 days which results in fines and loss off amenity privileges.

2. Inquiry about the condo association BOD’s. How many are on the board and inquiry if they live there full time, remote, etc.

3. Ask how many special assessments have been assigned to owners in the last 10 yrs, how much and what were the special assessments used to cover.

4. Ask to see the condo financials. Specifically how much the association has in reserves and how they fund the reserves.

5. If in FL ask about the Structural Integrity Reserve Study (SIRS). This is now required for all condos in FL greater than 3 floors. Has it been completed? What is the funding commitment? How will it be funded? When are repairs or expensive replacements (i.e., elevators, roofs, etc) scheduled to occur.

Good luck on your search. Just remember each condo association is different.

BB

 

[aTotal360]

Anyone here own a condo in the Gulf Shores / OB area?

Mrs. Salty and I are "potentially" looking at purchasing something that we could use as an investment and then when we retire a place to go as we see fit.

For those that own or have owned what advice would you give me?

FYI, this property isn't beach side, rather across the road on Perdido Beach Blvd.

PM sent.

 

[BulldogBlitz]

You just walk in to any Walgreens and buy condoms.

Oh wait, I misread.

 

[FrontRangeDawg]

I own a condo in PK and live here full time. A couple of things you need to know or ask the condo association is:

1. Know the rules for rentals. We only allow 7 day rentals. Some owners try to skirt the rules and do less than 7 days which results in fines and loss off amenity privileges.

2. Inquiry about the condo association BOD’s. How many are on the board and inquiry if they live there full time, remote, etc.

3. Ask how many special assessments have been assigned to owners in the last 10 yrs, how much and what were the special assessments used to cover.

4. Ask to see the condo financials. Specifically how much the association has in reserves and how they fund the reserves.

5. If in FL ask about the Structural Integrity Reserve Study (SIRS). This is now required for all condos in FL greater than 3 floors. Has it been completed? What is the funding commitment? How will it be funded? When are repairs or expensive replacements (i.e., elevators, roofs, etc) scheduled to occur.

Good luck on your search. Just remember each condo association is different.

BB

These are great points. Clearly been down there a while. In the late 90's/early 2000's, my dad bought two units in Destin from a guy who was liquidating from some kind of business meltdown. We used one for personal and the other for rental. He had about 4 years of decent rental experience with it. Then, there was a hurricane that blew out the unit (on the 6th floor, btw), and then the housing market got pretty gnarly.

He took a hit on the condo refurbishment post-hurricane, and his rentals got more sporadic after 2005. The PM company definitely made more money than he did. Definitely got into at least one special assessment snafu with the COA costing him a bunch, and then the property taxes for non-residents went up in Okaloosa County, IIRC.

He sold both of them a few years later, and probably didn't make a ton of money over all even though he got them for a bargain.

 

[FrontRangeDawg]

Also, homeowners insurance has gone up substantially everywhere, but over 50% since 2015 in Florida overall. It's different by market, but FL and CO are both really high. They're only going higher, and the companies that offer insurance have changed policy terms from the policies they issued in the past. Also, lots more denials of claims.

 

[JY1947]

I own a condo in PK and live here full time. A couple of things you need to know or ask the condo association is:

1. Know the rules for rentals. We only allow 7 day rentals. Some owners try to skirt the rules and do less than 7 days which results in fines and loss off amenity privileges.

2. Inquiry about the condo association BOD’s. How many are on the board and inquiry if they live there full time, remote, etc.

3. Ask how many special assessments have been assigned to owners in the last 10 yrs, how much and what were the special assessments used to cover.

4. Ask to see the condo financials. Specifically how much the association has in reserves and how they fund the reserves.

5. If in FL ask about the Structural Integrity Reserve Study (SIRS). This is now required for all condos in FL greater than 3 floors. Has it been completed? What is the funding commitment? How will it be funded? When are repairs or expensive replacements (i.e., elevators, roofs, etc) scheduled to occur.

Good luck on your search. Just remember each condo association is different.

BB

We own one in Orange Beach and rent it out for majority of the year. Not a huge money maker but we make enough on it to pay for the mortgage. Bought it in 21 but I would suggest all this as well. We have been assessed out the ***(over $100k) but it's been for things that were kicked down the road. If you're serious about renting it just know that some renters suck and stuff is going to be broken and ruined so don't put anything of significant value in there.

 

[Dawgbite]

HOA fees and assessments have gone way up since Hurricane Sally. Look closely at the financial health of the HOA. Look at the past frequency of assessments and the history of monthly increases. HOA’s vary greatly and one that may be fiscally responsible today may have a new board and president next year and spend money like there’s no tomorrow. We’ve always said that we would move to OB once we retired but while we still love the area we have just about decided that it’s a great place to visit but we’re not sure that we want to live there. Prices are actually falling on the island but they are increasing in the rest of Baldwin County. Lots of people are moving inland to get away from HOA fees and assessments and insurance rates. It’s honestly cheaper to live on Ono Island than it is to live in Orange Beach.

 

[FreeDawg]

Everything I see on condo ownership on coastline is the HOAs have skyrocketed the last several years (mainly insurance related). My parents owned 2 condos on the MS Gulf Coast for 15 years and the HOA fees paid did not outpace appreciation the same way a house would have over the same stretch. They were just personal use, not short term rentals so they didn’t care but my dad now has a house in Timber Ridge in PC and the math looks much better had he just did that 15 years ago in lieu of condo route. More to personally manage with a house though.

 

[WrapItDog]

Anyone here own a condo in the Gulf Shores / OB area?

Mrs. Salty and I are "potentially" looking at purchasing something that we could use as an investment and then when we retire a place to go as we see fit.

Putting the money in a S&P Index fund is a better investment.

My family owned a home at Peninsula golf course on Fort Morgan Rd from 2009 to 2024. The home was never used for rental purposes. The home was purchased for $300K cash. It sold for $595K in 2024. After realtor fees and some concessions for a new roof and other things the net was about $540K. Not bad you say a $240K gain.

AI says if $300K was invested in a S&P fund in 2009 it would be worth $1,350,000.

I ended up being the sole owner in 2023. Costs were about $2400 a month for HO ins, flood ins, taxes, HOA fees, utilities, lawn care etc. HO ins was $12K a year with an $18K wind deductible. I could maybe spend 3 weeks a year there so it just wasn't worth it. Selling freed up $30K a year I could spend on vacation if I wanted and no more headache with owning a home 5 hours away. I did consider keeping it and living down there in 3-4 years when I retire. It is a great neighborhood but traffic on the island has become a nightmare. A trip to & from Lowes/HD in Foley on Sat in June could take 3 hours.

I may eventually retire down there but I would be buying a house north of the Island.

 

[fedxdog]

The first reply nailed it. I have a condo in Hot Springs on Lake Hamilton. Prices went through the rood during covid and now they want to cash out. We have 10% of our units for sale and they are getting no lookers. We don't allow rentals so that eliminates many right there. Every week I seem to find a newspaper story of HSPD having to shutdown a party at an Airbnb.

 

[BigBully]

Also, homeowners insurance has gone up substantially everywhere, but over 50% since 2015 in Florida overall. It's different by market, but FL and CO are both really high. They're only going higher, and the companies that offer insurance have changed policy terms from the policies they issued in the past. Also, lots more denials of claims.

Our HOA dues have doubled over the past 7 years. The driver of the increase is insurance cost for our complex. Not to mention we had our property appraised during COVID and were hit with very high labor and replacement cost which drove up our premiums. We were able to realize a decrease in our HOA this year in spite of increasing insurance premiums.

 

[johnson86-1]

Also, homeowners insurance has gone up substantially everywhere, but over 50% since 2015 in Florida overall. It's different by market, but FL and CO are both really high. They're only going higher, and the companies that offer insurance have changed policy terms from the policies they issued in the past. Also, lots more denials of claims.

To the extent NFIP was an option for a property, yes, flood is going to 17 them going forward. Risk Rating 2.0 basically disclaims all the flood maps without explicitly telling people. There are going to be people that bought in x-zones because they thought FEMA meant something by claiming it was a less than 1% annual flood risk and be put in a bind going forward.

But for properties already stuck with the private market, their overall insurance rates are going to go up over time with replacement costs, but rates in the commercial market do also come down significantly at times.

 

[johnson86-1]

It’s really not the best time to buy, honestly. Waaaaaay high. The coast market goes up and down enough that the phrase “today is the best day to buy” doesn’t always apply like it usually does with residential real estate.

Yea, if you look over time, there have been some absolute steals in Alabama and the panhandle in the last 10 years. Had several years after the financial crisis and then again in I think 2017.

From what I can tell, it looks like if you buy reasonably prices units for cash and have a property manager, you're looking at 4% returns if you don't have any major assessments. If you are borrowing at almost 7%, I don't see how it works. Basically have to have some pretty outsized appreciation after the insane covid runup for it to turn into a good deal.

 

[bolddogge]

I rented a spot at this RV park directly across the street from the beach in OB for a week a few years back and have thought about purchasing one.
https://www.buenavistamotorcoachresort.com/
I haven't looked into it in depth yet, but the insurance and fees can't be much for a place like this. It has some nice amenities like a clubhouse with full kitchen and meeting rooms, a pool with a lazy river... Most spots have a small covered outdoor kitchen while some have what is called a coach house - which is basically an apartment built beside the parking spot. If a hurricane comes, just get the RV out before it gets there. The key is you have to have a nice RV for this to work. They don't allow Cousin Eddy types to stay. If your RV is older than 10 years they're supposed to make you send current photos of all 4 sides for them to review first. I'm still considering it...

 

[Dawgbite]

I rented a spot at this RV park directly across the street from the beach in OB for a week a few years back and have thought about purchasing one.
https://www.buenavistamotorcoachresort.com/
I haven't looked into it in depth yet, but the insurance and fees can't be much for a place like this. It has some nice amenities like a clubhouse with full kitchen and meeting rooms, a pool with a lazy river... Most spots have a small covered outdoor kitchen while some have what is called a coach house - which is basically an apartment built beside the parking spot. If a hurricane comes, just get the RV out before it gets there. The key is you have to have a nice RV for this to work. They don't allow Cousin Eddy types to stay. If your RV is older than 10 years they're supposed to make you send current photos of all 4 sides for them to review first. I'm still considering it...

We almost bought at Beuna Vista when it was just 11 lots Probably should have but diving deep into it BV had some serious financial issues. It’s probably ok now since it’s finally expanded per the original plans. We bought at Terry Cove MC Resort instead.

 

[RBDog82]

Honestly, with prices and rates where they are, it’s really challenging to make anything without a significant downpayment, especially if you also hire a property manager. Condo insurance usually isn’t bad bc it only covers contents inside the unit. However, quarterly HOA dues and assessments have gone up significantly since 2021.

 

[bolddogge]

We almost bought at Beuna Vista when it was just 11 lots Probably should have but diving deep into it BV had some serious financial issues. It’s probably ok now since it’s finally expanded per the original plans. We bought at Terry Cove MC Resort instead.

I didn't know about this place... Looks convenient for fishing since it so close to several marinas. But if the beach is your thing, BV is right across the street from the beach. Both are good condo alternatives for anyone with a class A.

 

[Dawgbite]

I didn't know about this place... Looks convenient for fishing since it so close to several marinas. But if the beach is your thing, BV is right across the street from the beach. Both are good condo alternatives for anyone with a class A.

BV initially didn’t have deeded beach access. You had to drive to the public beach at Romar. They were trying to negotiate with someone across the road for beach access but I never heard if they accomplished anything.