The answers you have been receiving are so on target. If I may I would like to ask a few questions. ( 1.) You say you are expecting to rent out the property - Is this because you would need the rental income to cover the mortgage?( 2.) How often do you see yourself staying in the condo? (3). Do you know the Myrtle Beach area?
Shelyn Mosseri Lee
Myrtle Beach, SC
The bad news is it is much harder to get financing for a second home or vacation rental.
Financing for condos and houses, which are not on the beach, are easier to finance than condos on the beach. Banks may require less money down with a condo that is not on the beach only because they are not categorized as a condo tel. Condos that are not on the beach usually cannot be rented on a nightly basis because of zoning. Condos that are not on the beach usually won't give as much rental income oceanfront condos, because they rent monthly and on a long term lease.
On the other hand, most condos that are on the beach are categorized as a condo-tel. Any beach condo considered a condo tel, is considered a higher risk to the bank so they require more money down. The category of Condo Tel, means a unit could be rented by the night, week, or month.
Financing an oceanfront condo that is over 750 sq ft, most banks will require 25% down. If the unit is less than 750 sq ft, the amount required down will be higher. Most of the oceanfront efficiencies and one bedroom condos on the beach are less than 750 sq ft.
The financing on oceanfront and ocean view condos has changed a lot since the height of the market. Back then you could put down as little as 10% down. These are the very same banks that are currently holding these foreclosures. Most banks with foreclosures have taken a hit and been burned by the previous owners. Banks just want to unload the inventory they hold. They have no interest in financing on the oceanfront.
A hand full of local banks realizes opportunity and has capitalized on financing of oceanfront condos. Many buyers are paying cash, or using a home equity loan to take advantage of these incredible deals. We have a window of opportunity right now. I donâ€™t know how long it will last but we are seeing 50%, 60% and even 75% off the prices at the height of the market. It is a great time to buy.
Jerry Pinkas Real Estate Team
There are many oceanfront foreclosures available that offer special financing incentives that include a low down payment.
Feel free to contact me and I can answer all of your questions
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