All Beach Apartment Management

The Condo Commandos

I am interested in purchasing a condo property to lease out. What factors should I look for?

Your best ally in selecting a good rental property would be the services of a competent local real estate agent. Happily, we are affiliated with Buy the Beach Realty, Inc., and can arrange for you to work with their agents in selecting properties. Since we know that we will be the ones having to deal with day-to-day management issues, we would work to ensure that you do not make a purchase in a property which, although superficially attractive, imposes burdens on operating your condo as a rental. Prospective management clients are urged to email or call before selecting an agent so that we help you by reviewing your needs with an agent and making certain that he/she understands that we will have to manage the property and what issues we expect will be addressed in selection.

As a general rule of thumb we have learned to avoid:

bulletSmall condos with fewer than 100 units. Unless these are of the "super-luxury" type commanding very high prices, they simply cannot afford to have full-time staff and competent professional management. Small condo projects are often run by boards comprised of owner-occupants who interact with each other and exhibit indifference or hostility toward absentee owner/investors who do not "participate" by donating personal services to help run the property.
bulletCondos with practices that place "hidden"  restrictions on leasing: Even if the condo rules permit leasing, many condo projects have unreasonable rules which, in effect, penalize investors leasing out their property. actual examples of such rules are:
bulletRequirement that a prospective tenant appear in person simply to obtain an application form
bulletRestrictions on re-leasing a unit within a given time period (usually a year). This can hurt if a tenant moves out prematurely or is evicted and the condo rules prohibit you from leasing it again within the year
bulletUnreasonably lengthy "screening" procedures (I know of one condo in which a a prospective tenant can be interviewed on only one day per month...this could make it almost impossible to lease out your unit if the timing of the one monthly screening interview does not work for the tenant's schedule).
bulletRacial bias in tenant screening and approval (we have run into several condos which are pretty brazen in discrimination against prospective tenants). This practice, aside from being illegal, can cost you lots of money in lost time if a rental applicant is turned down for spurious reasons.
bulletCondos with unresponsive management: Some are simply worse than others when you are seeking repairs or assistance with leaks or other damage.
bulletCondos which do not have separate metering for utilities: Many condos in this town were built as rental properties back in the days when energy was cheap and rentals were seasonal in nature. So some were built with central electricity or air conditioning systems. You will sometimes encounter this listed as a "benefit" in the maintenance when reviewing advertising materials. Bear in mind that if your unit is empty, you are paying to provide light and air conditioning for the unit owners who reside full-time on the property. Moreover, tenants tend to underestimate the "value" of this feature when shopping for a rental property. So you encounter artificially high operating costs which in general the market does not offset with increased rental value.
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Last modified: September 08, 2009
All Beach Apartment Management, Inc.
PO Box 398034
Miami Beach, FL 33239-0034
786-350-7218  (tel)
305-531-6742 (fax)