What makes condos such an attractive option? Similarly, as with many investment properties, buying a condo to use as a rental has both benefits and drawbacks. On the plus side, there are a few things that make condos an appealing option:
- Lower Cost: In many real estate markets, condos rate less than comparable single-family If you are a new investor or if the cost is an essential issue, this makes buying a condo one way to overcome the financial barriers to entry.
- Desirable Locations: Condos are mostly in the vicinity of urban centers and vacation destinations, making them appealing to renters that need to be near to these areas. In areas where single-family houses are in low supply, purchasing a condo can help you access into new and different markets.
- Less Maintenance: When you get a condo, some maintenance tasks often accomplished for you. Condos usually have little or no yards and common areas usually maintained by a building manager or condo association. It may lead to lower maintenance costs than a standard single-family house.
- Amenities: In addition to maintenance, some condo buildings will give a selection of added amenities. Depending on the condo and management, included services could range from cable and internet, garbage and sewer costs, pest control, and more.
Certainly, acquiring a condo has several potential drawbacks. These negative factors may even outweigh all of the benefits listed above. These drawbacks may include:
- Condo Association Fees: Many condos are a member of a homeowner’s association that charges a monthly fee. From time to time, and depending on how many services are delivered, these fees can be surprisingly high. If such fees cover a lot of attractive amenities and services, they can be reasonable to pay. But you have to include all necessary condo fees, together with any potential special assessment fees, into your calculations. If you don’t, you could wind up making a costly investment mistake.
- Financing Options: It can be crucial to secure financing for a condo than for a single-family property because conventional lenders often have strict rules for such loans. Some lenders may ask assurances like proof that the condo building is at least 50% owner-occupied or that there are no existing lawsuits against the condo association.
- Renting Restrictions: Some condo associations limit when and to whom you can rent your Some may even ask you to live in or own the condo for a full year before allowing you to rent it out.
- Lower Appreciation: Condos mostly gain in value at a different pace than single-family properties. If your investment goals do not concentrate on keeping a property for a couple of years, buying a condo that won’t appreciate very quickly is not the best choice.
Finally, buying a condo as an investment property only makes sense if the numbers make sense. By knowing as much as you can about the true costs of buying and owning a condo, you can make the decision that best fits your investing goals. When you find the right condo, don’t forget to contact Real Property Management Vanguard to help you with your investing goals. Call us at 407-681-7802 or contact us online now!