Getting Your Edge: How to Rightsize your Home and Life.

Investing in Limited-Stay Paradises: Navigating Vacation Condos with Usage Restrictions

August 19, 2023 Judy Gratton and Dennis Day Season 1 Episode 21
Getting Your Edge: How to Rightsize your Home and Life.
Investing in Limited-Stay Paradises: Navigating Vacation Condos with Usage Restrictions
Show Notes Transcript

In this episode of "Getting Your Edge," hosts Dennis Day and Judy Gratton, explore the world of limited-stay condos, examining their advantages and drawbacks in the context of right-sizing one's life. These unique vacation properties offer affordability,  and low maintenance, making them an appealing option for those seeking a getaway without the commitment of full-time living. However, their restricted usage and association fees can pose challenges. The episode underscores how limited-stay condos can align with the right-sizing concept, providing a balance between a primary residence and a traditional vacation property, making them ideal for seasonal escapes and diverse experiences. Listeners gain a comprehensive understanding of the considerations involved in owning these condos and how they can shape one's lifestyle choices.

Speaker 1 (00:00):

 Hi,  good neighbors.  Welcome back listeners and viewers to the exciting episode of Getting Your Child Right Size Your Home and Life podcast.  I'm your host,  Dennis Day,  and I'm with the co-host,  Judy Gratton.  How are you today,  Judy?  I'm great, Dennis.


Speaker 1 (00:31):

 Thank you for asking.  It's another lovely day in the Pacific Northwest.  If you don't live here, you probably should.  We're going to have it high in close to 90, but it gets cool at night.  I mean,  it was 59,  and you can sleep if you don't have air conditioning,  which I don't, and many of us in the Pacific Northwest don't.  So let's talk.  Our episode is called Owning a Slice of Getaway Bliss,


Speaker 1 (01:03):

Exploring the Unique Residency Rules at Vacation Properties.  Vacation condos with usage restrictions.  We'll explore the pros and cons of owning a limited  property and how they fit with this concept of right sizing your home and life.  So let's kick things off.  Why don't you describe what a limited use vacation property is?


Speaker 1 (01:32):

A lot of people are familiar with timeshares.  They're similar to timeshares,  and they're frequently referred to as condo tells like think hotel condo blend.  And so you when you buy the unit, you actually get a deed as if you were buying the condo, which you would not get in a timeshare.  However,  in buying it, you are agreeing to the usage policy that allows you to stay in your unit for a certain period of time.


Speaker 1 (02:03):

 And in some instances, it could be 35,  45 days a year. And in other instances,  we actually have some listings of those in Long Beach.  And they're pretty lenient at 21 days a month.  That's sort of how they they work.  And then the rest of the time they are in a rental pool.  And normally the money from that rental pool is used to maintain to a like an investment property.


Speaker 1 (02:40):

 Let's put it that way.  So most of the time you cannot Airbnb those units because they're in a rental pool that's supporting the maintenance and the employees of the facility.  Yeah.  And you can't live there full time.  No,  you can't. Most of them aren't zoned for that.  So no,


Speaker 1 (03:01):

you can't live there full time.  So this would be a situation where  and I actually sold one of the condos down in Long Beach to a couple who stay 21 days a month.  And then they go camping for nine days,  or they go visit friends for nine days, or they do something else for nine days, and then they come back for 21 days.  And so in that instance,  in that particular condo, that's doable.  Now, if you buy one that only has 45 days,


Speaker 1 (03:33):

this is really your place to get away your vacation.  And the reason it makes sense is that they're very reasonably priced.  So they're under $100,000 for oceanfront ocean view condominiums.  They're normally one bedroom,  maybe two bedroom,  really not any bigger than that normally.  Do you have any that you can pull up?  Chautauqua is in Long Beach,


Speaker 1 (04:03):

and that is the condominium development.  It's actually called Chautauqua Resort.  And there is a hotel there.  There's 60 hotel rooms and 60 condominiums.  And that is where we have our listings.  That is a sunset and a view of the ocean from that facility.  And the only thing between you and the ocean are dunes.  So it is an incredible  view. Just stunning.


Speaker 1 (04:31):

And to be able to own something like that for under $100,000,  that is unit 218. It's on the second floor.  And that particular unit has been completely remodeled.  And the asking price on that one is $64,950.  They just did a $5,000 price drop.  So it's amazing. They have indoor pools,  hot tub,  sauna.  There's a lobby because you will let the lobby know when you want to stay in your unit and they reserve it for you.


Speaker 1 (05:03):

 But when you don't have it reserved,  they are renting it out to other people.  So that is how that type facility works.  This one has a very liberal policy on how often you can stay the 21 days a month.  Normally they require that you have to stay in your room. And that is the one that we have at Chautauqua,  our one bedroom,  two full bathroom units.  And so this particular one has that Murphy bed that we just saw in the living room.


Speaker 1 (05:32):

 That's the bedroom.  It has its own full bathroom and then there's a full bathroom in the hallway. So two bathrooms in a, you know, a webbed room.  The place is pretty nice.  Yes, it is.  Well,  especially if you're sleeping four,  it gives you the ability and especially that back bedroom,  it's kind of like a primary suite.  You can close the door and be,  you know,  have your own private facility back there and allow everybody else to be up in the front of the house or the condo.


Speaker 1 (06:06):

 What about those really popular days,  say a Memorial Day,  a Labor Day, Fourth of July weekend?  How does the place manage that?  Well,  it depends on the bylaws and usage policies for the condominiums themselves and what they allocate.  I know at Chautauqua on the,  there are five big weekends a month and it is Memorial Day,


Speaker 1 (06:32):

Fourth of July,  Labor Day weekend.  The International Kite Festival is a big deal in Long Beach and that weekend.  And then there's also a big event called Rod Run where old vintage cars,  hundreds of them come down there.  The usage policy in that particular facility allows the owners to reserve one of those weekends.  And the rest of the weekends are taken for rentals because they can fill the place up with guests and that's where the money comes from to pay everybody and do a lot of the work.


Speaker 1 (07:10):

 There are homeowner dues in all of them and it just kind of depends on where they are.  But really any more in any condominiums,  homeowner dues are somewhere between five to $700 a month.  And that's true here too.  Out of that,  all of this particular one, all of your utilities including your internet and cable are paid and housekeeping that comes.


Speaker 1 (07:35):

 So when you come to your unit,  there are fresh sheets and towels and coffee and everything as if you were checking in and when you leave,  they clean it for you. So all of that is included in the dues of around $5.85 a month.  And all these face the ocean.  Every single one of them has a view of the ocean or the dunes. The first floor units have a view of the dunes.


Speaker 1 (08:01):

 They're not high enough to see the ocean above the dunes,  but that's still pretty spectacular.  There are deer that walk through there.  It's an incredible,  I know all this because I own one of those.  Okay.  Well, let's look at one from a,  this is in Westport.  I'm going to switch.  This is Westport. This is a place called the Chateau Westport.  And for those who don't know Westport is a little north of Long Beach.  It's kind of like the middle of the Western Washington post and it is a resort town.


Speaker 1 (08:38):

 It is.  And it was developed as a resort town with an airport and mini golf and golf courses and things like that.  And then,  so this is another condo hotel or limited use.  And I can't read the information on this.  So I can't tell what the price is or how many bedrooms this one has or what the usage policy is.


Speaker 1 (09:01):

Can you see that?  Okay.  It looks like it might be a little farther away from the ocean,  but indoor pool.  That's kind of a must in the Northwest to have indoor.  Otherwise you're going to use it for two months.  Yeah, that's true.  Fitness room.  This you get 45 days a year and it was night.  It's listed for $19,900.  It looks to me like that is a,  almost a hotel room.


Speaker 1 (09:31):

 I didn't see a kitchen in there.  So it's like this particular one at 19,000,  you have ownership in a building that you can use 45 days at the beach,  but it's,  it's more like a hotel room.  And I do know that Chateau Westport does have others units that are larger sizes.  I want to say I saw a one bedroom at like 45,000. Yeah.  To compare the price, let's see what that is.  And how big is that particular unit?  920 square feet,


Speaker 1 (10:01):

two bedroom,  one bath.  That's pretty good size.  You could live here full time,  two bedroom,  a top floor.  It only has 15 units,  wood stove and so on.  What's the price on that?  I can't see it.  I'm sorry.  290.  Well, it was listed at 315 sold for 290.  So as you can see to jump from 19,000 to have a place at the beach that you can spend 45 days a year to somewhere you can live.


Speaker 1 (10:32):

 It's somewhere over 200,000 and probably,  I mean, I've seen them up to a million actually. I think you just ran a cross-front,  but that looks like a real similar setup to what we have in Long Beach.  Yeah.  It's a nice unit,  full kitchen,  washer,  dryer in the unit.  That's nice.  It's empty.  So it's hard to tell.  It was a two bedroom,  but it was only a one bath.  Yeah.


Speaker 1 (11:01):

But that's a nice floor plan.  It's got an ocean view,  but that just gives you an idea of the difference between I want to live there full time and I'm going to spend time there with my friends and family.  And that is the difference between the condo tell and a full-time living.  And it is not an investment property.  Everybody is looking for places they can turn into Airbnb's right now.


Speaker 1 (11:31):

 And it won't support the sustainability of the building if you do that in a place like that.  The condo tells generally won't let you do,  you can't live there and you can't do the Airbnb type short-term rentals.  And then some of the condos that you buy,  you're going to have to look at the rules because some will allow short-term rentals and some will not.  Correct.  And it's been my experience from looking,


Speaker 1 (12:01):

I had this brilliant idea that I was going to buy an Airbnb in Virginia to be close to my grandchildren.  And what I discovered was that most cities in Virginia, and this is happening more and more across the country,  are restricting  Airbnb's. There are some people who have them and they're grandfathered in,  and that was the case in Virginia.  In many of the cities that I looked at, they would not allow the Airbnb's.  So if that's something that you're looking to do, you better make sure that the city regulations allow you to do that.


Speaker 1 (12:36):

 But in terms of using this as part of your downsizing experience,  it does give you the opportunity,  especially the one in Long Beach,  to spend quite a bit of time at the beach and then do something else.  I mean, you could still have a second home somewhere else.  I'm not sure if, you know, I know the condo tells we have them in Washington.


Speaker 1 (13:01):

I don't know if they have them in other places that I'm not sure of.  The condo tell type short-term usage is going to be considerably less expensive. In terms of purchasing,  and I will tell you this too,  that because it is under $100,000 a month,  it is most likely not going to be financeable.  Now, what you could do is if you did own another home and you wanted to buy it,  you could get what's called a home equity line of credit,  most likely,


Speaker 1 (13:32):

that most of those start at $100,000.  And you could buy it off your home equity line of credit if you didn't have the cash to do it.  But you're not going to be able to go to a bank and get a loan because most investors and most lenders will not do a loan under $100,000.  It's not worth it to them.  Another option is the advantage,  the low maintenance.  I mean,  the HOA fees are taking care of all the maintenance and upkeep and so forth.


Speaker 1 (14:06):

 And in the case of the Long Beach,  you've got housekeeping,  so you show up,  you enjoy,  you leave.  You leave.  Nice.  Whereas if you purchase the condo outright,  that's,  you know,  that maintenance of at least of your unit.  At least of the interior.  Most condos,  you know,  the exterior of the building is the responsibility of the homeowners association completely.


Speaker 1 (14:32):

 And so they have to hire the people to  and clean up and do that sort of thing.  And if there was anybody needed to be checking people in and out,  that then becomes the responsibility of the homeowners association.  And so that just keeps adding to the costs.  Another advantage of these type of units is that they're in lovely places.  It may be the mountains,  the ocean,  desirable places.  What about the cons?


Speaker 1 (15:01):

What's the downside of a limited use condo? Well, you don't get to stay there full time.  And because if you're not diligent about making sure that you have the reservations for the dates that you want,  you could have a situation where the entire place is rented out and they're not going to cancel someone's reservation for you to do.


Speaker 1 (15:31):

 And so what's recommended is that at the first of the year,  or if they allow you to do it, you know,  sometimes they won't allow you to do it the year before,  but at the first of the year,  I know at Chautauqua is when they'll start taking reservations for that year.  You want to look at the calendar and see when do I want to go?  Now, people who stay there 21 days a month,  they're  really diligent to make sure that they allow the management company to know when they're going to be there because that one couple,


Speaker 1 (16:05):

that is their home.  And then they go camping because that's what they want to do with their retirement.  So they're really diligent about that sort of a thing.  That's the big con is that you can't live there and you can't Airbnb it.  So I would say,  really,  there's no washer and dryer in the unit of this type of condo tell of the one in Westport that was a one bedroom that there's no washer and dryer in the unit.


Speaker 1 (16:34):

 I don't know about the one in Westport.  I know that Chautauqua does have a laundry facility with the washer and dryer.  I think it's on the first floor and anyone can use it,  but it's only one washer and dryer.  Well,  another downside is the HOA fees,  but you're going to have that with whether you buy a  term unit that you own outright that you can live in,  you're going to have HOA fees.


Speaker 1 (17:01):

Absolutely.  As well.  So whether you live in a condo in Seattle or Portland or ocean shores,  doesn't matter.  You're going to have HOA fees.  Because the owners are staying in their units and taking it out of the rental pool for a period of time,  that period of time,  no money is really being made to support the maintenance  of that building.  And so the homeowner association dues,  in addition to your utilities and housekeeping,


Speaker 1 (17:32):

all homeowner associations build reserves that they put money into for emergency situations.  And so part of it goes towards that.  There's property taxes.  If there are major repairs of the condo building itself,  that is normally the responsibility of the homeowners association.  That's also part of those dues.  And because the building is not making money when you're in it.


Speaker 1 (18:02):

 That's why we have HOA dues.  A person who's interested in the short-term usage should really be diligent about the rules and the fees and all the costs included.  Correct.  In the state of Washington,  in any condominium,  the buyer has the right to,  they receive from the HOA,  if it's a used condominium, it's referred to as a resale certificate.


Speaker 1 (18:31):

 And it talks about the health of the HOA itself and of the building.  And it tells you how much money is in the reserves.  And it tells you, you know, if there's outstanding debt,  lawsuits,  things like that. And they also have a reserve study.  And the reserve study,  the resale certificate,  the budget for the last two years,  and the HOA meeting minutes for the last two years,  along with the bylaws and the declaration and usage policy,


Speaker 1 (19:04):

all of that goes to the buyer.  And the buyer has a period of time that's agreed upon in the contract to review that. And if they don't like what they see,  they can terminate the contract and get their earnest money back based on reviewing those documents.  So that is a protection for the buyer on any condominium in the state of Washington.  I really think these short-term condo tells, add a great deal of value to somebody who was thinking about downsizing in that,


Speaker 1 (19:35):

one,  they're less expensive,  two,  you can kind of go and learn about this community,  whether it's really the right fit for you.  Yes, you can.  You can go and stay there as a, you know,  as a guest and see if you like it. And if you do,  then if they have units available, and that would be wherever they have this type of facility,  then you could,  again, they're inexpensive.


Speaker 1 (20:01):

 We had Picasso on here where they're more of your luxury homes in unique locations,  you know, like the beach,  the desert,  whatever,  with great views.  And remember, the idea behind that one was that you owned a portion of the home.  And so again, you only got to stay in the home for a certain period of time based on how many owners there were at that home,  but those homes were a lot more expensive.  So you,  there are options out there,


Speaker 1 (20:32):

a lot of options for people to consider in all price points,  which I don't think people realize.  So if somebody wants to have a vacation place that they like,  this is really ideal, but they don't want to, you know,  move out of the house and completely uproot their life and  live at a vacation site.  This is a nice balance there between having a really cool place in a beautiful spot,  but keeping your roots in your home or your community that you already have.


Speaker 1 (21:06):

 Yeah, you might want to move out of your home if it's too big and move into,  but you love your community and you don't want to leave it, or you have friends and family that you want to be close to that sort of thing.  So you find something smaller in that area.  And then this allows you to have the luxury of going to whatever your favorite resort type situation is and spending time there as well.


Speaker 1 (21:31):

 Anything else you want to add?  I think that's about it.  Yeah.  Just something else to consider to right size your life.  So if somebody was interested in the condos at Chautauqua, Long Beach, Washington,  what should they do?  Well, they can definitely contact us.  I'll allow you to speak to how to contact us on our website.  Okay.  All right.  Yeah.  Or their realtor.  They can find them also for them.  Yeah. They just ask a realtor to start looking up Long Beach properties.


Speaker 1 (22:05):

 When you contact a realtor,  if you say condo tell,  many of them might not know you're talking about,  especially if they don't work full time down in ocean property or that type of property.  And so tell them that you're looking for something at least here under 100,000. Now,  if they have them in Hawaii,  I have no idea how much they are.  So it just kind of depends on where they're located.  But here,


Speaker 1 (22:31):

if you're looking under 100,000 for a condo with an ocean view,  you'll find them and you can ask your realtor to look that up.  But if you want to talk to us,  please feel free to contact us at our website, or you can reach out to us on the phone.  My phone number is 206-276-3289.  You definitely can reach out to Dennis as well.  Yeah.  You know, what I'm


Speaker 1 (23:17):

going to do is I'm going to send you a 56 second video that gives you a real brief look at what a great place Long Beach is and a fun community with so much to do.


Speaker 1 (23:33):

 I'll send that directly to your email box.  I think that's it,  Judy.  Thank you again.  Yes.  I hope folks found this information valuable that going to a condo,  tell type short limited use facility is a good alternative to spending the big bucks for a condo full time.  It has its pros and cons.  I thank you for watching or listening to our podcast.  We really appreciate it. This is episode 21.


Speaker 1 (24:02):

 Yes.  If our episodes were people,  they would be allowed to go out and serve alcohol.  Right.  Oh,  that's dangerous.  We're proud of that.  This has been getting your edge,  how to right size your home and life podcasts with Dennis Day and Judy Gratton.  And you can find us at edge group, real estate  And you can email us at answers at edge group,  real estate


Speaker 1 (24:32):

 Thanks for watching and listening.  I hope this has been valuable.  Have a great summer.  Thanks so much.  Bye.