Condos may look as if it is an ideal rental property. At first look, they are good because they normally have lower prices than single-family properties. Nevertheless, those lower prices may come with hidden monthly costs that have to be included in your calculations. For these and other reasons, the condos you found in Parkland may or may not be the best fit for you. Before buying a condo to use as an investment property, you should be very vigilant to get all of the facts and information you need.
What makes condos such a nice choice? As with all investment properties, buying a condo to use as a rental has both benefits and drawbacks. On the good side, there are a few things that make condos an appealing option:
- Lower Cost: In many real estate markets, condos cost less than comparable single-family properties. If you are a new investor or if the cost is a primary issue, this makes buying a condo one way to overcome the cost barrier to entry.
- Desirable Locations: Condos are often located near urban centers and vacation destinations, making them attractive to renters looking to be close to such areas. In places where single-family houses are in short supply, buying a condo can help you gain entry into new and different markets.
- Less Maintenance: When you buy a condo, certain maintenance tasks are often done for you. Condos often have small or no yards, and common areas are usually maintained by a building manager or condo association. This may translate to lower maintenance costs than a typical single-family house.
- Amenities: Along with maintenance, some condo buildings will provide 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.
Of course, buying a condo has several potential drawbacks. These negative aspects may even outweigh all of the benefits listed above. These drawbacks may include:
- Condo Association Fees: For the most part, condos have a homeowner’s association that imposes a monthly fee. From time to time, and depending on how many services are provided, these fees can be surprisingly high. If such fees cover a lot of attractive amenities and services, they may be worth paying. But you need to include all related condo fees, plus 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 harder 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 want assurances like proof that the condo building is at least 50% owner-occupied or that there are no current lawsuits against the condo association.
- Renting Restrictions: Some condo associations put restrictions on when and to whom you can rent your condo. Some may even ask you to live in or own the condo for a full year before letting you rent it out.
- Lower Appreciation: Condos usually gain in value at a different pace than single-family properties. If your investment goals do not depend on holding a property for many years, buying a condo that won’t appreciate very quickly is not a good choice.
In due course, buying a condo as an investment property only makes sense if the numbers make sense. By taking in as much information as you can about the true costs of buying and owning a condo, you can make a sound decision that best suits your investing goals. As soon as you find the right condo, don’t forget to contact Real Property Management Sunshine to help you with your investing goals. Give us a call at 305-930-7867 or contact us online today!
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