Riding The Boom In Vacation Condominiums

There are more choices on the real estate scene than there are stock options in an executive suite. One, of course, is the vacation condominium. Today you can find apartments and "town houses" and fancy vacation villas on the condominium plan in scores of choice carriage-trade locales from

California's Lake Tahoe to the Fajardo-Las Croabas section of Puerto Rico. They're a booming part of the real estate business - and they hold in store both pitfalls and blessings.

Fall or winter could be a good time to get into the swim: You visit the area you like, check the plans on the drawing boards, and sign a deal that will have you comfortably installed by the following winter season. Why winter? Buying a winter vacation condominium offers a chance to plan smartly for retirement some day. But you can play it the other way too: Buy an apartment and sell it in a few years at handsome capital gains. Pick right and you can get some big plusses:

An automatic wintertime vacation site amid compatible neighbors, with no tedious trip planning or reservations needed.

Built-in recreation facilities, domestic services, and property maintenance.

A chance to profit from management-supervised rental of your property when you're not there.

A workable, warm-climate retirement plan - you buy at, say, age 50 or so, and with little effort have the condominium paid for before age 65.

You'll find a vast variety of locations and prices. In Acapulco, for example, beachfront condominiums by Playasol range from £20,000 (one bedroom) to £140,000 (four-bedroom penthouse). In the San Juan area of Puerto Rico, high-rises range from £25,000 to £90,000 (you can buy an option for £1,000 or £1,500). Away from the ocean you can find such condominium centers as the Tennis Club and Rim Crest developments at Palm Springs (£50,000 to £100,000 range), the Woodmont ski lodges at Snowmass-at-Aspen (£60,000 range), or Lake Village on Lake Tahoe - only a half mile from the casinos (£40,000 up).

Having the management rent your property part-time each year can bring down the cost of purchase. But check the details - one point is that rental commissions will vary from 10% (most usual) to as high as 50% of your income.

Take pencil and paper to any proposed rental deal. Here's a fairly typical 2004-75 example, based on sales at the Alphorn ski condominium at Vail, Colo. Say that you buy an Alpine ski lodge costing £38,000. This takes a down payment of 30%, with financing of 70% at 9 3/4% over 20 years, for £272 a month. With the £50 management fee added, the monthly payment comes to £322 - or £3,864 a year. You can rent to vacationers in winter for 60 days at £75 a day, and in summer for about 20 days at £50 a day. Total rental income: £5,500. Rental commission, maid service charges, and linen charges are taken out - bringing your income from rentals down to £3,600. Your net cost comes out to £264 a year. Ideal? Yes, and it can be done - given smart selection of your property. Also, you should get a tax break. In most cases, you can deduct for insurance, repairs and maintenance, and maybe depreciation as an owner of rental property (see our section on Income Taxes).

Your chance for a hefty resale profit is good, judging by sales over the past three years. In Acapulco apartments that cost £32,000 in 2008 have been selling for £50,000 to £60,000. Similar results hold for south Florida, where some high-bracket condominiums have jumped in value 15% a year since 2000.

But the pattern is uneven. Puerto Rico, for example, where condominiums are numerous, shows annual boosts in value of just 5% in most cases. The same holds for condominiums in parts of Mexico, Arizona, and elsewhere.

Check the fine print. The biggest problem for a buyer is quality of management, and the record of the condominium outfit should be checked out, as in any business deal. Rental results, especially, hinge on management. You should know precisely what is and isn't covered by the monthly maintenance charge. See how it covers such items as group insurance on common areas, painting and repairing of the building exterior, landscape maintenance. Ask about special assessments for such items as pool construction and upkeep and new tennis courts - you can be stuck for features voted in by others.

To learn more about Tax Refunds- Click Here

Second Homes That Come From A Factory

Another idea on the summer-home front is the smartly designed prefab. It may serve your purposes for the money you want to spend depending on your vacation-house location. You move the prefab to your site on a flat truck, put it up fast, and save time, money (some, anyway), and maybe a lot of headaches trying to locate a resort-area builder for a quality original job. And note: By and large, the prefab will cost you less than a standing house - where an owner has sales profit in mind.

More and more prefabricators - from Acorn (Concord, Mass.) to Serendipity - are turning out the £15,000 to £25,000 beach cottage, mountain hut, or hunting lodge. Techbuilt Homes (Englsih... see: Second Homes That Come From A Factory