If you are like most people, you want your financial future to be better than your current, or at least not worse. Thus, you put money aside and think of strategies to make it grow. The choices seem endless, but you have selected property as your investment arena, and you are considering condos.
Condos have a lot of benefits over single-family homes or 2-4 unit buildings. And several disadvantages. In my discussions with people who have spent in condos, few know all of these. So here they are.
The advantages of buying a condo as an investment property
Maintenance has to be performed on all properties. Condos, especially condos which are professionally managed, offer some relief to condominium investors.
You do not need to worry about the roof, stairs, landscaping and such. The institution takes care of them. To get a price, it is true, but you do not have to perform them.
A number of the problems within the unit may also be cared for by the intricate maintenance crew. That varies from condominium association to condominium association. And they charge you for this, but you do not need to drop everything else and run to your condominium because the sink is leaking.
Some condos are extremely expensive. However, homes of similar size in the exact same neighborhood cost more. So, you can purchase an investment property in a much better neighborhood. Additionally, in most regions, there is no such thing as a 1-bedroom home, but you will find 1-bedroom, or even no bedroom, condo units. And, usually, you will find people willing to rent them.
Amenities differ from condo association to condominium association. Nevertheless, it’s likely to invest in a condominium situated in a complex which has a swimming pool, 24-hour security, and these things.
The disadvantages of buying a condo as an investment
You need to follow rules that aren’t yours. Each institution has its own rules. Along with the rules can vary. Among the rules that could change is if tenants are allowed or not. If you have a condo and the institution votes no longer tenants, as soon as your lease is up, you move in or market. Your association might opt to choose the’no longer tenants’ rule in a time when selling isn’t a fantastic option.
Or, worse, they choose to allow too many leases. Too many renters can make obtaining a mortgage difficult (FHA and others don’t like condominium associations where more than 10 percent of the units are leased.) Making reselling your investment difficult, and of
Shared Decision Making
Yes, you could be certain you’ve got something to say about choices and get yourself elected on the board of directors; nonetheless, you’re not the sole decision maker.
You need to pay the same amount whether your unit is rented or empty. To put it differently, you get to pay the same amount whether you use or not the services (as an example, the water bill part of your assessment).
Once you purchased your condominium unit, there were not any special assessments and none were considered. Six months later, the institution decides it is time for a new face and there is not enough money in the reserves. They opt to proceed with the facelift and cover it with particular tests. Your share will be double your gains for the next 20 months. Can happen.
Yes, things can go wrong with a single family investment or an apartment building investment. But there you have more control. Since there you can have a home inspector inspect the entire structure. Since there’s no board of director’s member whose boyfriend owns a construction company that could use a few million bucks.
So, overall, purchasing a condo as an investment isn’t the thing to do. That is, if you’re able to afford a single family home. A single-family house isn’t the best thing to do if you are able to afford a 2-unit building. A 2-unit building isn’t the best thing to do if you are able to afford a 3-unit construction and so forth. Because of two reasons: when a condominium is empty (or a single family home ) the entire revenue source is gone but the expenses continue to be there.
In any case, if you are purchasing a condo as an investment property, you need to know what you are getting into.