Why? you may ask?

Well in Southwest Florida, where I live, there are a lot of condo's and a couple areas of concern. As a lender the first question that I ask a buyer or a Realtor, in regards to the condo, is what is the investor ratio. Lenders feel, and the numbers back us up, that condominium communities with high investor ratios, generally, are not as well maintained as those heavy in owner and second home occupants. Loans are either difficult or impossible to acquire in communities with high investor ratios. This brings up the following point.

When purchasing a Condo, not only must the buyer be approved for a loan, the condo must also pass muster. That means that the condo must also be approved.

In days gone by a good downpayment would get you a limited review of the community, and while that is still true to a certain extent, it is not to the extent that it was previously. Like everything else the guidelines are now more restrictive.

Actually, my greatest concern is about $$$$$, that being cash reserves and/or the lack thereof, AND unpaid association fees.

In many cases the unpaid fees are responsible for the lack of reserves, but there are other issues.

Investors: in tough times the investors who own units either don't pay the association dues, or don't pay them on a timely basis. This is often due to the fact that the units are not rented, and are not generating any income.

Foreclosures: foreclosed properties or those working on it, have owners who are probably not paying their dues.

This puts an unfair burden on the "Good Guys" who live there, and do pay on a  regular basis.

Often when there are a lack of resrves, or no reserves, and items need to be taken care of a speciall assessment needs to be instituted. That would be a one time charge, usually to address work or upkeep which needs to be addressed, and funds are not available. And in case you've already figured it out, yes once again, it's the "Good Guys" who bare an unfair burden.

So the moral of the story is if you are considering buying a condo, don't cut any corners, do your homework, and in simple terms;

BUYER BEWARE!