About Daytona Beach's The Plaza Resort & Spa

This post was written in November, but for some reason I did not publish it at that time. I thought to delete it, but then looked at the listings, and it is a great comparison to today (copmare it with my blog posted last week).

Very telling change. So, I decided to post it now. Sometimes "old" stuff is as good as new, if not better.

Plaza Resort & Spa at 600 N. Atlantic Ave in Daytona Beach is a premiere condo-hotel in the daytona beach area. Here is the link to over 20 blogs that I wrote about it, which can give you all the information about this property, and, because they were written in the course of 2-3 years, you could see the dynamic of the market.

Interestingly, the inventory in Plaza Resort & Spa went up, and is now 30 units for sale. I think it reflects that this is our seasonal slow time, so fewer sales, and that's how we gained 4 units (last time I checked there were 26 units for sale).

Not only the inventory went up, but the prices went a bit down, and while they are still a far cry from where they were 2 years ago, they are less than just a month ago.

This 323-room resort is in the heart of Daytona Beach. Maintenance fee $428.22. Plus $16.41 insurance for the inside. Taxes vary depending on what owners paid for their unit, but you can approximate them at 2.5 -2.6% of the value (what you paid for). No pets. Owners stay, if on rental program, limited to 60 days a year, and not more than 30 consecutive days.

Condo-hotels, including Plaza Resort & Spa, can be a good alternative to more expensive Oceanfront condos. If you are interested in condo-hotels or condos in Daytona Beach area, call me at 386-405-4408.

Can There Be Too Much Knowledge?

I have received several offers for a condo-hotel unit in Plaza Resort & Spa. This is the largest studio floor plan, priced reasonably at $103,500. Next comparable unit in the resort of similar set up and size is $159,000.

It would be easy to assume that I have the price wrong, based on the consistent uniformity of the offers, but I would stubbornly say “nay”. Why? Because I know… Because I work with investors, and run into it often enough…

With rare exception the offers are $62K and $67K. Interestingly, at the same time I have received offers on a smaller unit there for more money.

Anyway, when I get offers like this, I immediately look at who represents the buyer and I put them on my “bad” shelf. These for me are agents who do not deserve be taken seriously.

So, why is it happening?

It is too much knowledge. The agents check the county Property Appraiser site and see that the Seller has bought it recently at the auction and paid only $42K.

And instead of basing their advise to the Buyer based on today’s market, my fellow smart agents give their suggestion of the price based on what they think is fair to give to my Seller, knowing that he bought it recently for $42K. Some of them think that it is enough to give him $20K, and some think that $25K is OK. Hence the offers for $62K and $67K.

They are not in the “buying” mood when they do it, but in the “throwing a bone” to the Seller mood. Now they are thinking of how much profit is fair for the Seller instead of thinking what would be a fair price based on the market values.

These agents somehow are in the wrong business. They need to join our present Administration, which knows how much people should be making and what is fair.

Why not go to basics, and look at the market, evaluate it, and then advise your customers what the market value is, and avoid looking stupid, when there is no counter on a ridiculous offer. I would die to see how they would explain that they advised on a "smart" price, and the results are... no results...

Is it that too much knowledge is too much?

Can you outsmart yourself?

You bet…

Should you?

* Photo by Elsie esq. via Flickr.com

Association Dues in Plaza Resort & Spa.

Jon,

I have been considering looking to buy in the Plaza Resort and Spa in Daytona Beach....but the $428 monthly maintenance fee...what is included in this? Seems high, but I know its a very nice place to live / vacation?

This is from the e-mail I have received from AR reader. I have written about it before, but could not find it in those hundreds and hundreds of blogs.

Plaza Resort & Spa is a Condo-Hotel. It is one of the oldest hotels initially built in 1911, and then completely rebuilt in 1969. It was converted to condominium type of ownership relatively recently, in 2005.

In general Association Fees (Maintenance Fees) are higher per sq. ft. than in residential (apartment) condominiums, and the fees are significantly higher. A 372 sq. ft. studio in Plaza Resort & Spa would cost you $428.22, and if you buy a 2 bdr/ 2bath condo with full kitchen (which is not in a 372-sf unit), your maintenance fee will be about the same $400 a month.

Of course, the difference is that in residential condos only water is included, and the rest of the fee covers everything OUTSIDE the unit. In the condo-hotel it is much easier to list what it DOES NOT cover, which would be property taxes (paid annually), and liability insurance, so that you are protected when the guest gets hurt ($16.41 a month).

Everything else is included: electricity, cable, local telephone, plus every expense for the common areas (undivided interest in common areas) to cover maintenance of the building and the grounds.

The Plaza Resort & Spa has chosen the system where each condo is assessed the same amount, no mater of the size, so each unit, whether it is 372 sf, 462 sf or 513 sf studio, or even a one-bedroom unit, the Association fee today is $428.22.

The way the association fee is calculated is by preparing the budget. And yes, if the cost of KW of electricity goes up, it would affect the budget. Increased cost of water would affect the budget, growing labor costs would affect the budget, cost of materials sure affects the budget. So, if the projected budget is set higher than the last budget and the difference is not offset by the increase in revenue, the Association fees can go up.

Keep in mind that people who vote for the budget are owners like you, and they are not interested in just voluntarily hiking the fee. They are paying it as everyone else.

So, is $428.22 a month high? What if the fee is lower, but the management has to cut corners to keep it lower? Would it cost less? Well, all these cut corners, and all the work that was not done, and preventive maintenance that was not done do not go anywhere. They would come in the form of Special Assessment and will cost you more than a professional management.

Actually, if you walk into lobby of Plaza Resort & Spa, and If after that you are concerned about the association fee, maybe condo-hotel and condo is not for you. I think Buyers should be careful when the maintenance fee is lower than on average, and there is no reasonable explanation.

There are no miracles. You want to buy a unit in a premier condo-hotel, then you are faced with higher Association fees. Woldn't you pay more for a Mercedes than for a Chevy?

The funny part is that the amount of the Association fee is never a concern for the owner. The difference between the rental income, and particularly the difference between the owner portion and all expenses is what owners should think of.

You can have $300 a month Association fee and have no revenue, or, like in large units in Ocean Walk, have $1,056 a month Association fee and enough revenue to offset your expenses.

I received a call from a Canadian buyer. He called me a week ago and questioned me about one of my listings in Plaza Resort & Spa, a premier Condo-Hotel in Daytona Beach. I sent him all the information, we exchanged a few e-mails, and then it all came to a halt.

I called him, and he explained that he made an offer on another unit in Plaza Resort & Spa. The one, which is direct oceanfront, and mine isn't. I figured that there is another agent involved, and I know that agent, so I said that it was fine and hung up.

Week later I see that the unit he told me he made an offer on, is still active, however, the price went up from $55K to $76K. Ouch, but for out of the area investors, it is not unusual to gauge the activity and then refuse to sell and raise the price. There was no problem doing it, as the offer was far from full price.

Today I received an e-mail and a call from this buyer. He tried to make an offer for another direct oceanfront unit in Plaza Resort & Spa, but could not get any response, and was asking me to represent him in this transaction.

Well, this unit is on MLS but is not really for sale, the seller is not responding, so this is a dead end, and it will eventually end up in foreclosure.

My Canadian buyer asked me about another oceanfront unit in Plaza Resort & Spa, but just yesterday we have received a nearly full price offer for the next best deal in Plaza.

So, he asked me what the best deal in Plaza Resort & Spa was, if he would buy something today. And it is tougher question than it seems.

If for under $65K, than units 1217 and 1218, which are both listed for $64K seem to be a good deal. I know who the seller's agent is, and I know what the Seller paid for it, and I know that flipping at $64K does not really give her a lot of money, so I would not expect her to discount even for a penny.

There is an investor, that just increased the price by $21K on another unit, so the investor might be tempted to do the same here.

So, if my goal were to buy a unit today for under $65K, I would go with full price, quick closing, and hope that she would not change the asking price.

As for whether unit 1217 (it is one unit closer to the ocean than 1218) for $64K is the best deal, if $65K cap was not there, I am not that sure and here is why.

Let me compare unit 1217 it to unit 409. Unit 409 is South East corner (direct oceanfront), largest studio floorplan in Plaza Resort & Spa (513 sq. ft.), 2 balconies, glass cook-top (other studios don't have it)... Asking price $103,900 (the Seller wants to raise it, but for now it is what it is).

Unit 409 was initially bought in February 2006 for $385,665. It is 26.9 cents on a dollar.

Unit 1217 was sold in March 2006 for $232,973. It is 27.5 cents on a dollar.

When the prices go back to 2006 level (and it is not a matter of if, it is only a matter of when, and 409 will be sold for $153K more than 1217, tell me, which is a better buy today?

Meanwhile, unit 409 will have better rentals because of the cook-top as families prefer being able to fix breakfast in the unit rather than eat out.

Let me know if you have questions. My mobile is 386-405-4408.

Plaza Resort & Spa, the premier Daytona Beach condo-hotel, is awake from the sleepy winter. A week ago there were 25 units for sale, and today only 22. The inventory is decreasing, but the prices have gone down as they always do in the slowest time of the year. They will slowly rise, expecially in summer.

Summer is when we have seasonal real estate boom in Daytona Beach Area.

So, there are 22 units for sale in MLS in Plaza Resort & Spa in Daytona Beach. Well, this is what MLS says. In reality there is 21 unit.

Unit 506, a direct oceanfront studio for $62K, is listed as Active, but it is anything BUT Active. This is a short sale, where the Seller is not cooperating, and where the Listing agents had 4 offers, but wasn't able to get a response from the Seller.

This is a lost case, as when you have a non-cooperating Seller, there is nothing you can do. Of course, the agent could withdraw the Listing.

Interesting, are there other fake active listings in Plaza Resort & Spa?

Looking for a condo or a condo-hotel in Daytona Beach Area. Call me 386-405-4408.