Condo Fee Questions

Ask your Realtor 🙂

If you do not have one, send me a PM as I am a Realtor as is hubby - I am Stateside right now for surgery but my husband would love to help with any questions you might have and with your purchase.

Pia

You would want to read the condo declarations prior to buying, and discuss your concerns with your attorney. Is there a Realtor involved? They should be able to answer some of your questions and concerns, but ultimately it is up to you to know what you're getting into. That's what the lawyers are for.

Every homeowners association (HOA) pays for different things depending upon their CC&R's (conditions, covenants and restrictions).
In the USVI most must first pay for wind insurance, that usually takes the biggest bite. They also carry other insurance such as liability. Some associations paint buildings, repair roads, roofs, decks and maintain and police the property. Some even pay for water and Internet fees. The important thing you need to do is read the documents so you fully understand what 'your' HOA includes.

HOA dues, fees and assessments are especially high in the USVI because of the high cost and requirement of hurricane coverage. Some condos have chosen to be self insured, be sure you understand what that means to you. As far as the developer running things, the law now requires that condo owners take over the HOA when they become a majority. In the past some developers have underfunded the HOA and when the owners take over they often must increase their fees to pay for everything.

Hi - needed to add Realtors on St John

Pia

Well, this is really helpful. $18,000 a year is a lot. I will have to find out what is covered and what is not. Yes, I am working with a realtor. There was beautiful St. John home and the insurance was $8,000 a year. That's what really got me thinking since there's such a big difference between $8,000 and $18,000. They are both three bedroom places. I e-mailed my realtor a few days ago with this question - why such a disparity between figures and what does the $18,000 cover besides insurance? I really want to know. She has not replied yet. I'm returning for a visit to St. John in late February and I want to know what I'm going to seriously look at this time and why. I am already familiar with some places on the market and my search is becoming much more focused. I think my visits to St. John will remain brief for a few years, then the snowbird plan goes into effect, half the year on beautiful St. John and half in beautiful Maine. The best of both worlds, if you ask me. One thing that is good about the condo is that it is already being marketed by Destination St. John. Or maybe I should say that it "sounds good" since the rental calendar doesn't look too impressive yet. I'll sure keep my eye on that. I would get my own website for it and also do VRBO. I just want to make sure that I don't do something really stupid. Palm Terrace really does look like a pretty decent place. I'm going to look at it much more seriously when I return. Actually, I haven't seen it. I saw the sister property next door, Mango Terrace, which was finished in December. The developer still owns five out of six units there and I don't feel at all comfortable with that. The place does not have to make a lot of money for me, but it would be great if I could cut down on some of the expenses, especially since I won't be able to enjoy it to a great extent for a few years. It does seem like a good time to buy, but if I were to lose the $18,000 annually for the next, say, five years then it might be better to wait and put that money toward something else. It's pretty darn confusing. I wonder if I could ask to see those condo documents now. I'll ask. They certainly would be good to review ahead of time. Yes, I'm very glad I joined this site. Thanks so much for the input! Any and all thoughts on the condos, Palm Terrace in particular, or property purchase suggestions pertinent to St. John are welcome.

My family always stay at Palm Terrace when they visit with their adult kids - beautiful units and great location as they can walk home from Woodys at 1am and the parents don't have to drive to get them, but all I can say is wow if you emailed your Realtor a few days ago and have not yet received a reply - we were in England 2 weeks ago for my Mums funeral and the night before my husband was emailing then calling a customer at 3am as that was the most convenient time for the customer

Pia

I used to be a Realtor. Maybe it's time for you to find a new one. It's his/her job to be responsive to your questions; there are plenty of Realtors that won't make you wait days for answers. All COA's are different, I'm sure. Our dues cover insurance, maintenence, security, manager and office manager supplies and salary, common area water and electricity and cable.

Obtain a copy of the by laws for the condo. It is available by asking the owner to have the association provide you a copy or the realtor. Beware of how the actual land is split up. Is it owned by you in part or is it owned by a land lord. The hurricane insurance is a big ticket item.

billd

This is exactly why my wife and I despite living here for almost three years haven't purchased. I still own investment property in the states, used to be a contractor and a REALTOR and bought my first rental property when I was 23. The 1800 a month just doesn't make sense. Let's assume that you can pay cash or pay off the unit prior to your snowbird years, guessing the condo is in the four hundred to five hundred thousand dollar range? This a lot of capitol to tie up. Then you are setting your self up to pay this $1800 a month annually for the condo fee, and that number will go up over the years. On top of that will be WAPA, INTERNET, cable etc you will have another five hundred dollars a month or more in fixed costs. These number are going to be year round. So with the assumption that you are going to pay off and have no mortgage at snowbird day you are setting yourself up for $30000 a year in fixed expenses January first each year, this isn't taking into account every increasing property taxes, worn out furniture and appliances painting every other year or so, emergency repair calls, as these things are all part of the rental market. Along with another couple dozen things that happen when you own rental. If you do this you want to take the most profitable six months of the year for your self from the rental market, this alone will likely put you in the boat of having to go the VRBO route as most property managers will want the unit for high season to justify marketing costs. Based on those numbers you will have to get around six thousand dollars a month for the six months that you are not living in it just to have a shot at breaking out. Now if a thirty year mortgage is factored into this model it makes no sense to own. Take the 20 to 30 thousand dollars a year you are likely to loose over the next five years, put it in a safe investment and use it to pay rent on someplace down here for six months out of year, it will be a safer retirement. With a lot less stress.
Jay

Here it is simply put. YOU CAN NOT MAKE MONEY DOWN HERE. If you rent it out it will help defer the costs, and perhaps get you marginally above the break even point. But the cost of money puts you in a run with inflation of the cost of the property and the cost of the money you put down. Then there is the wild card, hurricanes. Now if you are going to stay for three or four months and just love the place and you don't come down in the prime season then it has chance of being positive, including what you would have spent.

The best solution is to rent it long term, buy it for low $$$ and then rent s place when you come down.

Owning rental property is for the long term. And if Obama agrees with Cuba that trade can open up then there goes a big population of travleres.

But if you love the place like I do you are willing to spend some bucks to be here.

billd

I made a mistake when I said $1,800 a month. The condo fee is $1,600 per month, coming to $18,000 per year. I must say the input coming in on this question is great. I've already requested a copy of the bylaws. I don't have time at the moment, but I am going to sit down and respond specifically to the two posts above. Again, thank you guys, all of you who have taken the time to share thoughts, suggestions, and information. I really do appreciate it.

I did think about signing a year lease and staying in the place just six months out of the year. I've got a lot of thinking to do. I guess the bottom line is that I want my own St. John place. As I've said before I just don't want to do something stupid. If I'm going to buy a place, it sure does seem like the timing is opportune. Are prices going to continue falling as they have been for a few years? Nobody has a crystal ball, I know. I would be able to put substantial cash down, but getting a mortgage would make sense right now since the rest of the money would be earning more than the mortgage rate as things stand now.

I would definitely rent your first year down, island living is almost never what anyone expects. Live here first and see if you really wanna make it your home. If you like it, Stj is always going to be a fairly safe investment opportunity with a few exceptions. I would definitely live here the six months you are talking about and then decide.

MJ:

I sent you a Private Message (PM).

F.I.