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Top Things To Avoid When You Are Purchasing A Condo

by Jerry Pinkas

Myrtle Beach Condos for Sale

Have you or someone you know been thinking of buying a condo in beautiful Myrtle Beach, SC? Are you excited about the possibilities of condo living, but have questions or concerns about the buying process? Do you stay awake at night wondering about all the things you should/need to avoid when looking to purchase a condo, and wish you had an experienced and knowledgeable real estate agent to help you navigate these potential pitfalls? If you answered yes to one or more of these questions, then this blog post is for you! Today we are going to be talking about all things condo and give you information on how to avoid the buying mistakes that are costly. So without further ado, lets jump in!

Is the internet a good place to find information on condos?  

Now more than ever, we know there is a lot of information available to you at your fingertips via the World Wide Web. And while this is a luxury in a lot of ways, it is also important to understand that not all the information that you find online is accurate. There is a lot of misinformation that people are taking in, especially when it comes to buying and selling real estate. So while it is okay to browse online, the best way to get information is to talk to a knowledgeable and experienced real estate agent in your area. Not only will they be able to answer all your questions, but they should have a great handle on what is going on with properties in the area and give you advice accordingly.

How to buy a condo for the first time

What are some of the main things to avoid when looking to purchase a condo?

It is no secret that condo living is a great way to go for a lot of people, especially millennia’s and seniors who may be retiring and looking to downsize their living space a bit. But there are a few things to keep an eye out for when you start your search. Understanding that things have changed a bit can give you a leg up. What do we mean by that? There are buildings that have had past and/or present litigations, slip and fall defects, construction defects and other similar things can be considered minor, but are still things to look out for. You want to be aware of the condition of the building you are buying into so there are minimal surprises down the road.

You will also want to keep an eye out for the HOA (Homeowners Association) budget. Does it have reserves? Do they have money in the bank or are they losing money? Do they have a cash call? These are all very important things to know and questions that should be asked. Also, you want to know about HOA meeting minutes and what is going on. When it comes to big projects, you want to see if they have been completed, if there is some other project that is going on that needs to be finished up and any potential future projects they have planned. For example, if there was a damaged roof from a storm, you want to know if there is any mold that has subsequentially arisen from the water damage. Another big area you want to look into is any balcony issues, as these can be costly. You want to know all these things before you get involved and invested in the property. Lastly, we want you to understand that the skill of the agent you are working with is a direct relation to how successful your experience will be. So finding a great real estate agent that is knowledgeable and will work hard in your best interest will give you the best chance of success in your buying experience.

 

Are you buying a condo or a condotel?

First off, you may be asking yourself what exactly a condotel is. A condotel, while it is not a condo, usually has a vacancy sign outside and is typically rented by the night, by the week and/or by the month. Does the property you are looking at have a rental desk, a central phone system, daily maid service, and valet parking? If so, these are all signs the property may be a condotel. It is important to understand the difference so you know exactly what type of property you are looking at and do not invest your time looking into in a building that ultimately will not fit your needs. Our team here at Jerry Pinkas Real Estate Experts will be able to walk you through more of the differences and be sure to steer you clear of these properties if you are looking to purchase a typical condo unit. And on a side note, if you ever do find yourself looking to purchase a condotel, we have some unfortunate news for you. You will find that 99 percent of banks will actually not finance a condotel.

Tips to buying a condo in Myrtle Beach

Why is it important to work with a good lender when looking to purchase a condo?

There are a number of reasons why it is so important to work with a good lender when purchasing a condo. One of these reasons is because, if you are working with a good lender, they will be able to help you review any litigations on the property, as well as review the home owner’s documents on your behalf. Why would they do this you ask? Because as much as you do not want to put money into a bad property, they do not want to loan you money on a project that is going to get them in trouble either. So using the correct lender is definitely a bonus on your end. It also never hurts to have an extra set of eyes on things to help ensure you are making the best decision given your current situation, as well as your wants and needs in a property.

Myrtle Beach SC Condo Life

What should I do if I am interested in buying a condo in Myrtle Beach, SC?

If you or someone you know is looking to purchase a condo in sunny Myrtle Beach, SC, be sure to give our experienced team here at Jerry Pinkas Real Estate Experts a call today! As we have touched on throughout this blog post, while the condo buying process can be an exciting time, there are also a few pitfalls that you want to be sure to avoid as they can be very costly, frustrating and time-consuming. Making sure that you have a knowledgeable and dedicated real estate agent by your side can help ensure that you have a successful and stress-free buying experience. We understand that you have your choice of real estate agents to choose from in the Myrtle Beach, SC area, and you may be wondering what sets our team here at Jerry Pinkas Real Estate Experts apart from the rest?

Buying condo vs house for investment

For one, we have a separate team of agents that are solely dedicated to our buyer clients, and a separate set of agents that are solely dedicated to our seller clients. So when starting your condo buying journey, you can be confident and sleep easy knowing that your real estate agent is extremely skilled and knowledgeable about the buying process and will always work hard in your best interests. We have helped numerous individuals, couples, families, and retirees find their dream condo in Myrtle Beach, SC and we know we can do the same for you. Why settle for average when you can have the best? Give us a call today, we look forward to hearing from you and working with you soon!

 

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What Is A Condotel In Myrtle Beach

by Jerry Pinkas

What Is A Condotel In Myrtle Beach, SC

There is a lot of bad advice on the internet about condotels. I hear countless stories of confusion and people being ripped off by real estate agencies, who don’t have correct or ineffective information. Because I’m a good citizen of the real estate world, I’ve decided to give this information to the general public so they don’t get in trouble when buying a condo in Myrtle Beach, SC.

What Is A Condotel In Myrtle Beach

So what’s the difference between a condotel and a condo

 When people start looking at condos on-line, the common misconception, all condos are the same and their arn't any other categories for properties in a complex. The fact is most consumers have no idea that they may, in-fact, be looking at a condotel property listing. Nowhere in the listing or description does it use the word condotel. If you’re the average person, it’s impossible to know what you’re looking at. There are several big issues you will discover. For example; when you go to your hometown lender, (whom you may have dealing with for years) and then you tell them you’re buying a ‘condo at the beach’. They say great! ...fill out this application and you get a pre-approval letter. The problem arises when you take that pre approval letter to your real estate agent in Myrtle Beach. If find a property you wish to purchase, then get the seller to agree to a price, take the contract to the lender… everything seems normal and smooth. Until, you find out, usually the week before closing, the underwriter for the lender, says they don’t do condotels, they only finance condos! Seen it happen hundreds of times with unexperienced real estate agents and consumers. Many national, big named banks will not finance a condotel. Locally, we have a handful of local lenders, with very competitive rates, that know the market and will finance these properties. Having the Jerry Pinkas Real Estate Experts help you when you’re looking can save you thousands of dollars and tons of aggravation.

difference between a condotel and a condo

How can you tell if it’s a condotel

A condotel is a property that can be rented by the night, week or month. So you say; most properties at the beach are that way. Well, when you look closer, some of the condominium projects have a front registration desk. Just like a condo, but run like a hotel. The property may run with housekeeping, cleaning service, linens towels etc. Each “unit” or condo is owned individually. The unit owners have the option to put their condo on the hotels rental program where it is rented out like a hotel room. Reservations are booked on line and even walk up customers can rent the room by the night, week or month.

condotel for sale

Pros and cons of Condotel ownership.

Pros include rental income that may help offset the costs of ownership; like mortgage, homeowners association fees and real estate taxes etc. As an owner, you’ll also have the advantage of rental rates going higher with inflation,(extra income) and the potential price appreciation of the condo.

Condotel vs Condo

On the down side, even though you own the unit you may have to “book” your time in advance. Once you put it on a rental program, you have hired the rental company to rent it out, and you may have to block your personal time. (so no one uses your unit during your vacation time) Also many rental contracts read you cannot use your unit any more that 2 or even 3 weeks during the peak season. (See the individual agrement) As an example; if you’re purchasing at the beach, peak season (highest rental dollars/income) come in during the summer months. So if you’re looking for income, the more you use your unit in the summer, the less income you will have. Many people let people renting their condo “pay for their place at the beach” with big rental dollars coming in during the summer and banking money for the slower seasons. Many owners will use their condo personally in the shoulder seasons or off seasons.

Pros and cons of Condotel

Are Condotels in Myrtle Beach a good investment?

The truth is, not all condotels are good investments! The best condos give off massive amounts of income! Some units are what we call alligators and they will eat you alive. On the other hand, some units are Rental Machines and continue to produce high revenues, year after year and historically increase in value with both high rental income and condo unit appreciation.

Condotel Video

What are condos in Myrtle Beach so Cheap?

With 65 miles of pristine beach and hundreds of resort complexes near the beach, there are well over 10,000 oceanfront resort and golf condos in the area. Basic rules of supply and demand, have kept prices low. But it won’t stay this way for long. Prices and rental income are going up. The lure of the beach and ocean is strong! Many baby boomers and retirees are using their investment for income and diversifying into rental income!

Myrtle Beach Cheap Condos For Sale

Rentals, Income & Management Fees

The main thing that makes a traditional condo different from a condotel is the setup of short term rentals. A typical condotel is going to feel like a hotel, with rent on a short term basis, one night,  a week, weekend, etc.

A front desk or a check in/out facility on site, daily maid services, central phone system, electronically programed key systems, linens and towels and even the furnishings have the feel of a hotel.

In the best resorts and properties have occupancy rates that exceed 80% annually, and produce fantastic rental proceeds for the owners.

HOA fees are typically budgeted and setup as all-inclusive HOA fees. The interior electric, water/sewer, cable, internet, insurances and more, are all covered in your monthly condo/HOA fee. If you never used your property, or had it booked year round, or lived in your unit full time, you would pay the exact same monthly fee either way.

It is not uncommon to find rental management companies with commission in the range of 20-40% range  with condotels. Onsite operations with huge marketing budgets, daily maid services, maintenance and 24hr front desk staff take acre of any situation that arises very quickly.

best investment property in myrtle beach

Financing a Myrtle Beach Condotel

Financing exists! It may be hard to find it, with all the changes in the programs on a weekly and monthly basis, but that is why you need an expert to guide you.  Today condotels are not Fannie Mae approved properties, they are what the lenders &  banks call “non-warrantable”. Meaning, your typical mortgage broker or lender cannot provide you with a loan. The reason they don’t finance; most banks are backed by an entity like Fannie Mae,  and these properties don’t meet government backed loans. With limited amounts of condotel financing, many people end up paying cash, or do a home equity loan, find creative financing or work with a local expert that can guide them through the process. Jerry Pinkas Real Estate Experts helps their clients be the pro in the market.

Financing a condo in Myrtle Beach

Who is the best Realtor for buying a condo in Myrtle Beach

If you would like to know more about condotels, or if you are thinking about buying one, you absolutely must work with a real estate professional that understand the ins and outs of the local market. Knowing the difference between a rental machine and an alligator… is a skill. We put our money where our mouth is! We personally own units at the beach, we have helped thousands of people make educated decisions and helped many avoid the pitfalls that are costly. This is what we do. We do it every day and we’re good at it.

Pick up the phone and call 843-839-9870

Best Realtor in Myrtle Beach

Condotels Myrtle Beach for Sale

Why pick average, when you can have an expert?

Which condo or condotel is right for you?

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