By yanainassar

January 7, 2020

Considering Buying a condo in Brickell?

You finally decided buying a condo in Brickell. Congrats!! Now it is time to research the buildings, talk to residents, review the condominium documents, and read reviews

In this article:

• Conditions of the condo unit and the building
• Common areas
• Is the unit for sale?
• Number of Owner Occupied vs Tenant Occupied Units
• Condo Fees
• Reserves
• Lawsuits
• Insurance
• Debt
• Arrears
• Assessments
• Parking
• Guest Parking
• Storage
• Management
• Complaints
• Rent
• Restrictions
• Pets
• Future resale value

When you are buying a condo you must ask these questions since they determine your ability to get a loan and future resale value

1.Conditions

What’s the condition of the unit, the building, the complex you’re considering? To obtain a loan to buy a condo unit or any other property, the premises have to be livable. Livable doesn’t mean “remodeled” but it must have all appliances in working condition and the bathrooms should be working.

2.Common Areas?

Are common areas well maintained? You should dig deeper than what is visible. Ask the association when was the last time the amenities were updated or if there are plans to do so. You should also ask if there are reserves for such improvements or you could be facing an assessment.

3.For Sale?

How many condos are for sale? A large % could be sign of problems but not always. It depends how big is the building and how many units are sold compared to the number of available units. You should ask your Realtor to do an analysis for you.Here is an example: 500 Brickell is a 633 units complex and as of today there are a 65 units for sale in total which represents only a 10% of the building.

4. Number of Owner Occupied vs Tenant Occupied Units

What % of the units are owner-occupied? Lenders may balk if the majority are rented.

5. Condo Fees?

How much are the condo/association fees and what do they cover is important. In Brickell, most buildings association fee cover water, garbage removal, maintenance of common areas, like the pool, gym and lobby. Security, concierge and valet parking is also covered. In other buildings like Brickell on The River North Tower, internet and basic cable is included too. In Four Ambassadors the AC is included in addition to the services mentioned above. Please note that the services included in the monthly fee may change. You must call the associations to verify what is included at the time you are purchasing.

6.Reserves?

Does the association have adequate reserves for emergencies and renovations? If not, you could face a special assessment. This is major!

Must people look for low association fees but remember it could mean that the building is not collecting reserves for emergencies and if an elevator brakes and there are no reserves, the cost of fixing it has to be divided between the owners. It means an extra monthly payment that you were not prepare to.

7.Lawsuits?

Are there pending lawsuits against the association or judgments you might have to help pay? If there is, it could be hard to get a loan. Years ago, Brickell House had a huge law suit agains the robotic parking operator and unfortunately, during those years, no bank would finance a unit in the building. Units stayed longer in the market because the pool of buyers was reduced to cash buyers only.

8.Insurance?

What does the association’s insurance cover? You may need supplemental insurance to protect the unit’s content

9.Debt

How much outstanding debt does the association have? Why is this important? Let’s say that the association took a loan on the amount of 5 million dollars to replace the roof of the building and update the amenities and for some reason a high percentage of owners stop paying the association fee as it happened during the financial crisis of 2008, who is going to pay for the outstanding debt? In such cases, the association has to file bankruptcy and therefore, financing will not be possible.

10.Arrears?

What % of the units are in arrears on their dues?

11.Assessments?

Does the seller owe back fees or assessments that may become your responsibility when you buy?

12.Parking?

Does the unit come with reserved parking? how many? covered?. Are there any issues with the parking garage? Finding parking in Brickell is difficult and although the city requires at least one parking space per unit, make sure to inquire about it.

13.Guest Parking?

Is there adequate additional parking for guests?

14.Storage?

Will you have extra storage space for bikes, paddle boards and the like?

15.Management?

Is the association managed by a qualified professional company? Is there and on-site office? Read online reviews about the management company.

16.Complaints?

Does the management handle owner’s requests and complaints quickly?

17.Rent?

Do association rules limit your ability to rent the unit? How many times a year will you be able to rent the unit? what happens if a tenant breaks a contract before the end of the lease period? will the association allow you to rent it again?If you are purchasing as an investment to rent the unit, you should pay attention to the number of units available for rent.

You must ask your Realtor for a rental analysis. Here is an example to explain why: Icon Brickell has 127 units available for rent as of today. It means that every potential tenant interested in the complex has 127 options and therefore your unit could sit on the market for a while before you can rent it out. You will probably end up renting it for much less than what you expected. However, 500 Brickell has 27 units for rent. Potential renters interested in the building have less options and your chances of renting faster and at higher rates could be increased. And Bristol Tower has 9 units available for rent. I’ll let you do the math.

18.Restrictions?

Will the association prevent you from changing visible elements such as the tile on your balcony?

19.Pets?

Are there pets restrictions? What are those? are tenants allowed to have pets? Many buildings in Brickell allow pets only to property owners but not to tenants. If you are purchasing as an investment this rule could limit the number of potential renters. Read here about the Animal Service new law.

20.Future resale value?

Request a report from your Realtor of the sales history in the building at least for the last 5 years. It will help you analyze factors like potential equity, days on the market, list price vs sold price. You can check information about the condo for sale that you are interested in miamidade.com.

Most buyers ask the wrong questions, the most common one is why are they selling? Think about it, they will probably lie about it, it could be a divorce, a death, or that they are in a bad financial situation, will they tell you that? Probably not. The normal answer is that the sellers are moving to another city or similar reasons.