Condo associations and their financing partners are trying innovative tactics to save the value of their properties as the foreclosure crisis widens...
In essesence, some condominium associations plan to use their reserves to buy pre-foreclosed units within their development before the foreclosures negatively impact the value of other units within their project...they then plan to "rent" them and eventually resell those units when the market improves.
The move prevents foreclosed units from being sold far below market value and protects the "comp" values. The rental income can be used to help pay monthly association fees and help defer any special assessments that might follow due to the short fall which most probably will erode the reserves of the development.
This and other tatics ...invoking hardship rules to allow for waiving previously banned rental prohibitions are but a few of the practices being considered to prop up the condo market...
You as a buyer should invesigate the financial condition of ANY development in which you plan to buy...either as a primary residence or an investment. A good lawyer and real estate agent can be helpful...
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