Any time you plan on purchasing a luxury apartment, there are a variety of factors to consider. Of course, you must consider the condition of the property and the local comparables (comps). However, for this type of investment, you need to also consider such things as annual market trends because the market size for such a purchase is so much smaller than that of a normal piece of real estate. In terms of Tampa, buying a luxury apartment carries with it even more things to consider.
Condition
Of course, you need to consider the condition. This holds true for any property. However, you will need to consider if the decor and luxury finishes are dated or current.
Market Trends
Depending on whether you plan to live in the luxury apartment, it is important to consider the annual market for both renting and sales. This consists of knowing the actual number of buyers versus the actual number of available properties in your price range. Additionally, you want to make sure to consider the strength of the local economy and its cycles. For instance, in 2017, Tampa enjoyed strong sales in real estate. For 2018, the forecast predicted Tampa to be in a long, steady cycle as opposed to a boom or bust cycle.
Proximity to Ocean
The proximity to the ocean will impact the value of the home, usually positively. However, if the proximity is too close, it might be susceptible to storm surge. To do this, simply Google “Luxury apartments tampafl” to determine if the property you are considering is within five to twenty miles of the shore. Storm surges have been known to travel landward for up to thirty miles.
Managed
For any luxury apartment, you should consider if the property is managed. Many properties will carry home-owner-association (HOA) fees. You should find out if your property’s fees come with managed service-based services, such as concierge or front-desk services. Many properties come with fees, yet the services are maintenance-based rather than service-based. Maintenance-based fees cover such things as landscaping, trash removal, and parking lot re-surfacing. Service-based services are a lifestyle factor and can help with reselling the property in the future.
Renter-to-Owner Ratio
For quality of life, a higher renter-to-owner ratio could impact your happiness. Additionally, higher renter-to-owner ratios can impact the sales process, potentially increasing the time on market.
APR
As in any area, if you are taking out a loan, you must consider the annual percentage rate.
Insurance
Insurance rates can be higher for luxury apartments. Additionally, for apartments near the ocean in known hurricane zones, you would need to obtain flooding insurance and hurricane insurance. The annual premium for hurricane insurance in the Tampa area, for instance, ranges from $3,000 to $8,000. The deductible can be two points of the home’s appraised value.
Taxes
Being that luxury apartments are typically appraised at much higher values than a typical home, the annual taxes could be surprising. Additionally, Tampa has not raised property-insurance rates in years. However, there is an ongoing discussion regarding whether those rates should be raised from the current average of .005 percent
Neighbors
Considering the neighbors prior to purchasing is a task easily marked off your due-diligence checklist. All you have to do is go from door to door, knocking and introducing yourself. Doing so will give you an idea of whether you will enjoy living there. Additionally, it is important to research the neighborhood hot spots. Unwittingly moving into a hopping bar scene might soon seem like a huge mistake.