LBI Real Estate Condo Owner to Investor Ratio

Understanding the Ratio to Condo Owners versus Condo Renters

LBI Real Estate Condo Owner to Investor Ratio
LBI Real Estate Condo Owner to Investor Ratio

Long Beach Island Real Estate Condominiums

Long Beach Island offers several different property styles for buyers and investors in the LBI real estate market. While single-family homes tend to be the most active area of home sales on Long Beach Island, there are some excellent opportunities to purchase condominiums. A condo in the LBI real estate market can take several forms ranging from small converted hotels to large side-by-side duplexes. When buying a condo in the LBI real estate market, it is important to understand the LBI real estate condo owner to investor ratio. This important number will help to determine what financing, if any, is available to complete the transaction.

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LBI Real Estate Condo Owner to Investor Ratio

The LBI real estate condo owner to investor ratio is a metric used by many banks to establish a condo will qualify for traditional financing. Before we explore this topic in depth, I must point out that every situation is different. Qualification requirements for a homebuyer will vary depending on their individual situation and the bank with which they intend to employ. Therefore, a perspective homebuyer should consult a mortgage representative to evaluate their individual circumstances. That said, there are some generalizations that any would be condo buyer should be aware of:

  • A condo owner to investor ratio determines how many units in a complex are used by the homeowner versus how many units are rented
  • Most banks will not accept more than 50% of the units being rented
  • Condominium complexes with more than 50% of the units being rental properties may require investment financing

Many condominium complexes on Long Beach Island are small with between five and 15. This can be somewhat problematic for a homebuyer as it takes only a few hours to rent their property before financing may become an issue. For example, if a condominium complex has the units and four of the units are on the summer rental market, the complex is at risk for being qualified as an investment property. This can create a scenario where traditional financing will not be applicable and an investment or commercial loan may be needed. These loans will typically require a higher down payment coupled with a higher interest rate and possibly points.

Long Beach Island Real Estate Financing

There are a number of banks that offer financing for second homes or investment properties in the LBI real estate market. Just because a condominium complex has more than 50% of the units being rented, it does not necessarily mean that the condo cannot be purchased. There are a myriad of investment vehicles and portfolio lenders to look for these kinds of loans and many of them offer excellent terms and rates. Like any real estate transaction on Long Beach Island, there are subtleties that must be explored and fully understood before entering into the purchase. For more information about LBI Real Estate Condo Owner to Investor Ratio for buying a condominium in the LBI real estate market, contact meĀ and I will respond right away.

By : Nathan Colmer | The Van Dyk Group

Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com

www.BuyLBI.com

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