Beware: 'Great' Condo Deals Bring Other Fees

NEW YORK (MainStreet) — Summertime, when many of us have the same thought: "Oh, if only we owned this wonderful vacation place."

With real estate prices still bouncing on the bottom and mortgages unbelievably cheap, it seems like a perfect time to consider a second home for vacations or eventual retirement. But be careful: The rock-bottom sales price may mask some other heavy expenses, such as shocking association fees and potentially pricy risks.

In Vero Beach, Fla., for instance, condos in some resort communities are going for a song. Numerous two-bedroom units in one tennis and beach community are listed for less than $200,000, and many for under $150,000.

If you had plenty of equity in your full-time home, you might borrow $200,000 at today's average rate of 3.85% for a monthly payment of only $937. An opportunity such as this may never come again.

But if you shop on sites such as Realtor.com, Zillow.com and Trulia.com, you won't see details on the fees. That "bargain" buy in Vero Beach requires an annual tennis club fee exceeding $2,000. Then there's the regular association fee upward of $2,000 a quarter. In other words, you'd pay about as much in annual fees as on the mortgage. Many golf communities are even more expensive, often charging an initiation fee for joining the club on top of annual dues.

True, the fees do buy something of value. If you stayed up north and played tennis indoors several times a week, you could spend a lot of money during a six-month indoor season, so $2,000 a year for top-quality tennis may not seem so bad.