I love real estate as an investment. I know there are so many things we can invest our money in to make it work for us and grow over time, but I personally struggle a little with purchasing the intangible, like stocks and bonds and bitcoin. When I purchase real estate, I can see it and touch it, and as long as I maintain it, it isn’t going anywhere and it will grow in value over time.
Real estate investment also offers other potential benefits, such as rental income or maybe a vacation home for your family to enjoy. As a Realtor in a lake community, I’ve LOVED helping several families find their perfect piece of Lake Norman’s waterfront…spending a Saturday trying on some lake views isn’t a bad gig! But if you’re considering investing in a lakefront condo on Lake Norman, there are a few easily overlooked things to consider besides how close you are to the pool or where you’ll park your boat. Here are a few important questions to ask:
Will I be able to take advantage of low interest rates for second homes?
It was announced that as of February 7, 2022, second home interest rates will go up. These mortgages will be treated similarly to pure investment properties. Ask your mortgage professional for details, in order to position yourself for the best possible loan and highest possible home value.
Will I be permitted to rent out my unit?
This gets complicated and varies from complex to complex, depending on the HOA’s rules and regulations. Each condominium complex on Lake Norman is managed by a property management company and has its own Bylaws and set of Covenants, Conditions & Restrictions. If you’d envisioned listing your property on VRBO or AirBnB as a vacation rental, you’ll want to ask if the HOA permits “transient occupancy,” the fancy, sort of scandalous-sounding term for short term rentals. Many condominiums have minimum lease term requirements, which could be anywhere from 7 days to a full year, so this is something you’ll need to know before putting in an offer. You may also be required to own the property for a specified number of months before you are permitted to lease it. Listing agents often make copies of current HOA documents available on the MLS, but if not, ask! They should be able to obtain an up-to-date copy with the latest rules on leasing the unit.
If the unit you are interested in is already a rental, you might be able to obtain additional info on past rental information so that you have an idea of a typical year of income vs expenses. If you aren’t planning to rent out your unit, you might still want to be aware if short term rentals are common and permitted in the complex you have your eye on. You should also be aware of how many units are active rentals and whether there has been discussion of any planned changes to what is allowed, and what amendments have been made in the recent past. Whatever you do, do not make assumptions or proceed without letting your Realtor know your intentions for the property. They can help you track down the information you need in order to make an offer with confidence.
Can I have my dog here?
I know you love your dog, and it might now have occurred to you that he or she might not be welcome in your new condo, but many condominium HOAs have rules about pets, ranging from size limitations by weight to breed exclusions to nuisance rules. If you have a dog, especially a medium to large breed, you’ll want to verify that restrictions in place don’t prohibit you from keeping him or her in your unit. Again, this should be addressed in HOA documents if you are able to obtain a copy. Your agent can also help you find this information.
Can I park my boat there?
If your complex is waterfront, it may have a private dock for owner use. However, there are often rules that vary with respect to how the dock is used and slips are assigned. While some docks offer deeded slips that may or may not convey with the unit, others lease slips to owners. If you want to own a slip, you’ll want to look into whether or not your unit comes with a deeded slip or ask if slips are available for purchase. This is typically done owner to owner, and sellers and buyers often find each other through the HOA. Slips for lease may have wait lists, but if you aren’t able to secure one at the private dock at your complex, you may be able to find a nearby slip for lease at a local marina. Their waitlists often vary according to what type/size of boat you have. Some complexes do offer day docks for in and out use during the day, but overnight mooring is prohibited. Many complexes have a separate second HOA for owners who utilize the dock and own slips, which is an additional cost.
Are there any current or planned special assessments I should know about?
Sellers are responsible for disclosing any current or planned special assessments for HOA maintenance or improvement projects, but it’s always a good idea to have a conversations about anything in the works. When you’re looking at condos, make sure to take a good look at the condition of the building, stairwells and walkways, common areas, roof, and grounds to make note of anything that appears in need of repair. Ask about any recently completed projects and find out about how well current owners feel the property is maintained. These questions will give you an idea of what expenses might pop up in the near future, even if they aren’t an immediate concern.
Investing in a condo here on Lake Norman can be so exciting! I love watching families lean back in that deck chair, picture themselves sipping on cold drink in the sun, and fall in love with their own slice of the lake, and a HUGE piece of closing day perfection is doing the legwork upfront to ensure that the perfect property is, in fact, perfect. There are some of the critical questions to ask in order to avoid any unwelcomed surprises. If you’re considering investing in a waterfront condo in the Lake Norman area, I’d love to help you find your perfect fit and have you enjoying sunsets on the lake ASAP! I also offer property management services if you’re looking to add another stream of income to your repertoire.