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We have been looking at properties in West Palm (although this question applies to any area probably). I have been given a dizzying number of explanations of HOA structures, and I still don't feel comfortable with the whole concept. For instance:
We have been told that the HOA on an apartment is based on square footage. In a particular building that we like a lot (views of the intercoastal; walking distance to everything; good amenities, etc) there are two units available that are each 2 bed/2bath. They are have identical square footage (living and total), yet one has an HOA fee that is nearly $100 higher than the other.
Additional questions: if a building has significant vacancies will the HOA go up for the existing owner/tenants, since money is needed to maintain the building and its amenities. Or, if the building is fully, or nearly fully occupied will the HOA fees go up because the presence of more people means the building has more maintenance needs?
Do HOA fees ever go down? Should one expect HOA fees to creep up steadily over time, or do they remain stable?
I have seen condos in buildings that are supposedly solid, well run with good reserves and the HOA fees are still high. Conversely, I have seen buildings that appear to be a bit less well cared for and the HOA fees are very reasonable. Is there any rhyme or reason to this whole issue???
First off, Condominiums and HOA's are different animals. They are different forms of ownership and are not interchangeable.
What are you looking at firstly? Condo or HOA.
In either case, fees are not likely to go down, and fees will be more expensive if there are a lot of vacancies or foreclosires because the money needed for maintenance is the same wheter fully occupied or not, and that cost will be split between all the owners paying.
Look out any property still controlled or owned by a developer, because developers often keep fees artificially low, or don't pay their share of fees.
Look to see what the fees cover. They are all different. Remember, in a condo you own an undivided interest in the common property. In an HOA you own yor home outright and the association owns the common property. It is a disting difference.
I am now even more confused. I thought that all of those WPB buildings (Slade, City Palms, Prado, Flagler Pointe, etc. etc. are condos. And they all have HOA fees.
I am now even more confused. I thought that all of those WPB buildings (Slade, City Palms, Prado, Flagler Pointe, etc. etc. are condos. And they all have HOA fees.
Condo fees and HOA fees are sometimes used interchangabely, but you have to realize that what is covered under Condo fees and HOA fees for single family homes are vastly different. Condo fees include "more" usually. HOA fees are generally for single family developments, where the fees may include security, lawn maintenance, etc.
Condo fees can run as high as $0.40/square foot or more for some of the better buildings downtown West Palm. So, if you have a 1200 sq ft home, you can have a bill of $500/month. While this seems high, it can equal out to a single family home's regular expenses in many cases.
Check to see "what you get" for your HOA/Condo fees. Remember that most of the buildings downtown differ from other parts of the county because they are "full service" buildings like vertical self contained gated communities. If the HOA includes outside and common area insurance, cable TV, and water, you may save money in the long run, or find that the fees equal the cost of ownership of a SFH.
For example, I have a single family home with a pool and small yard. I pay someone to do the pool $70/month. The yard is another $60-$100/month, depending on the season and other work asked to be done. I pay water separate from electricity, which is about $65/month. Then I pay cable, at $75/month. To top it off, home owner's insurance is a separate bill. THAT can be huge, especially close to the water. If condo fees include insurance, all you have to get is "inside" and contents insurance, which is significantly cheaper... often under $1000/year.
When I rented in a downtown WPB condo, my electric bill was about 50% cheaper than the house I'm living in now, due to the concrete box with impact windows keeping the temperature more even than a SFH. I had secure underground parking, and a concierge and gym. (I now pay $35/month for gym membership).
Now, I love my private yard, private pool, no dog restrictions, etc. that I get from owning a SFH, but I can see the advantages of condo fees rolling everything into one. It just feels like a shock because it's one bill.
Always be sure to check on the delinquency rate of owner's condo dues. If it's high, run away. You may be stuck with special assessments. Old buildings often have more established owners. Newer buildings may have a greater rate of foreclosure because people bought them pre-construction at boom prices, and now can't afford it.
Downtown West Palm is one of the areas I would be very careful buying right now. Which is unfortunate because some of the buildings are great. There's been a few posts on this topic in this section.
The majority of the buildings were bought by investors that have walked away. If they haven't walked they are renting the units out. Now for the most part a new wave of investors are coming in buying out the units and renting them out.
Also if you are not paying cash, or putting a large percent down, you will have a problem getting financed in some of these buildings.
Tri summed up COA's well. You do get what you pay for to some extent, but you have to decide if you need all those extras. If you want something with resort style living than these are what you are looking for, but you will pay for it. Unless you really need a view and some of the extra ammenities of a condo, your better bet would be to find a townhome/villa. There's some great communities in the Gardens/Jupiter that if you haven't seen yet would be worthwhile.
I am working with someone now who was looking for a unit in WPB. After showing him the Gardens we are working on an offer because he found it was an overall safer/better buy.
Condo Fees - cover many things - unit owners own only the inside of their apartment.
So the fees cover roofs, exteriors, parking lots, and amentities such as club houses and pools.
There are also fees for the grounds - lawn maintenance and replacement, landscaping, irrigation, signage, lighting. Security if you have a gated entrance. Gates and card readers, security cameras. Maintenance, Custodial and Management personnel.
Also mulity story building have elevators, emergency lighting, cleaning of lobbies.
It is not uncommon for Condo Association that has several buildings to have separate Association for each building and all buildings are part of a Master Association. The reason for this is simple - people don't like to pay for items they don't have direct use of. If Building A wants to replace the lobby furniture and give things a fresh new look. The residents of Building B don't want to pay for that. By having separate Associations - the owners of Building A can vote on those upgrades and pay for them. But each of the Associations pays a portion of the Master Associations expenses.
This could explain why one unit may have higher Condo Dues than another. They may look just alike, they may have the same square footage, but if they are in different buildings - that Association may be paying for something else- such as a lobby remodel, new entry system, new carpet in the hallways.
There are also Reserve Accounts - these are based on the life span of the item. If the roof is 15 years old and the lifespan is 20 years, in 5 years that roof needs to be replaced. This is a huge expense - so each year money is put into the Roof Reserve - when the roof needs replaced hopefully the Reserve will cover the expenses without having a special Assessment - (where each homeowner must make up the shortfall). This Assessment would be in additon to your normal Condo Dues.
Reserve Accounts CAN NOT be spent for purposes that they are not intended for unless the owners in that building vote to do so.
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Quote:
Originally Posted by derekjet Saw a beautiful house inside a gated community in Boca Point, but noticed that the HOA fees are much higher because of gate security.
I know you cant put a price on safety, but is worth 3 times the cost for having it? I also know that HOA fees arent tax deductible.
Any thoughts on this or on Boca Point itself?
There are many things the the Association fees pay for in addition to Security.
Any amenties such as pools, tennis courts, golf courses, playground areas all need to be maintained, as well as having a Reserve Fund for major repairs.
Tennis Courts also have things like lights, nets, brooms, rollers, water fountains. All need maintained.
Your individual front yards have plants, sod and irrigation systems. All need maintained and repaired or replaced as needed.
The common areas need to be mowed, and fertilized, they also have irrigation systems. Your lakes have fountains and need to have the water tested and have chemicals which cause alge to grow added.
You club houses need to be cleaned along with your pool areas. Your sidewalks are pressure cleaned twice a year, and the trees get trimmed annually. If a tree dies it has to be removed, stump ground and a new tree is planted.
You have street signage inside your community and monument signs at your entrances. Annual flowers are planted and holiday decorations are purchased and displayed.
You have a management office to maintain and salaries for things like Attorneys, Accountants, Annual Audits, Maintenance people, a Management Co., a Security Co. and a Property Manager.
There are golf carts, office furniture, computers and office supplies, club house and pool furniture.
There are utility bills, gas for your pool heater, water, sewage, electric, cleaning supplies for the bathrooms.
Is it worth it? How much would you spend annually to mow your lawn, maintain your sprinklers, replace the plants in your yards, add mulch and trim the trees each year. How much would you pay for your basic cable. Now add to it what would you do if your neighbor across the street did not care if he mowed his lawn, never cleaned his driveway or roof. Worked on his cars in the front yard?
What if your house was for sale and your neighbor was doing those things? And it was effecting the value of your house.
Reedsmit explained very well all those fees.
In my opinion, if you are not very rich, living in a gated community or in an expensive condo with all sort of amenities is too expensive for a "normal" person/family. Are you going daily to the gym ? I don't think so, and in Florida if you really want to exercise, buy a bike, run, swim.
Yes, you pay for a lot of people who are just moving papers around and your fees will increase almost every year. In a gated community they decide how your lawn looks, what trees can grow, what color is your house, etc.
My question is (as a potential buyer) where can I find in WPB a safe area to buy a small house and to have the liberty to plant the flowers and the trees I like ? Does this exists ?
You are correct about many of things you have said about HOA's - some of the rules and regulations are very restrictive and down right ludicrous. And for the record, I DO NOT nor have I ever lived in an HOA. But I am a licensed property manager and manage HOA's and Condo Associations. I have to say it is a hard job and goes way beyond just moving papers around. No matter how hard you work, how many hours you work, some one is angry and upset and is more than willing to rake you over the coals. It is just not POSSIBLE to make EVERYONE happy.
However HOA's do have their place - and although no one likes to be told what color you can or cannot paint your house, or when you have to clean your driveway. Reality is everyone has their own level of what is acceptable - it is very upsetting if you work hard to keep your home clean and in good repair and your neighbor could not give a damn. Many will say live and let live - but what happens when the condition of your neighbors home start to effect the value of your home or the ability to SELL your home as it has become an eyesore.
Now having said that; I can not tell you in West Palm Beach what is and is not a good neighborhood which is not part of an HOA. If you are willing to move a little further north you will find areas Palm Beach Gardens (between Northlake to the south, I-95 to the east, Military Trail to the west, Burns Rd. to the north) that have homes in nice neighborhoods that are not in HOA's. You will also find similiar areas in Tequesta and in Juno Beach.
Good luck to you.
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