Condos might sound like the best rental property. At first look, they are attractive because they always have lower prices than single-family properties. But those lower prices may come with hidden monthly costs that need to be included in your calculations. Therefore, the condos you found in Irving may or may not be the best fit for you. Before purchasing a condo to use as an investment property, you should take great care to obtain all of the knowledge and information you need.
What makes condos such an appealing option? As with all investment properties, buying a condo to use as a rental has both benefits and drawbacks. On the positive side, there are a few things that make condos an appealing option:
- Lower Cost: In many real estate markets, condos charge less than comparable single-family homes. If you are a new investor or if the cost is a primary concern, this makes purchasing a condo one solution to overcome the financial barriers to entry.
- Desirable Locations: Condos usually near to urban centers and vacation destinations, making them attract the renters who want to be near to these areas. In areas where single-family houses are in limited supply, getting a condo can help you learn about new and different markets.
- Less Maintenance: When you buy a condo, certain maintenance tasks regularly accomplished for you. Condos often have limited or no yards and common areas usually maintained by a building manager or condo association. It may give you lower maintenance expenses compared to a typical single-family house.
- Amenities: In addition to maintenance, many condo buildings will have a selection of added amenities. Depending on the condo and management, provided services could range from cable and internet, garbage and sewer costs, pest control, and more.
Indeed, buying a condo has many potential drawbacks. These negative aspects may even overshadow all of the benefits listed above. These drawbacks may include:
- Condo Association Fees: Some condos are a member of a homeowner’s association that requires a monthly fee. At times, and based on how many services are covered, these fees can be surprisingly high. If such fees cover a lot of attractive amenities and services, they may be worth paying. But you must include all associated condo fees, including 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 stressful to secure financing for a condo than for a single-family property as conventional lenders often have strict rules for such loans. Some lenders need 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 condo. Others may even encourage you to live in or own the condo for a full year before you can rent it out.
- Lower Appreciation: Condos usually gain in value at a different pace than single-family properties. If your investment goals do not rely on holding property for a long time, buying a condo that won’t appreciate very quickly is not the right move.
Ultimately, buying a condo as an investment property only make sense if the numbers make sense. By knowing all about the true costs of buying and owning a condo, you can make the right choice for your investing goals. When you’ve found the right condo, feel free to contact Real Property Management 360 to help you achieve your investing goals. Call us at 817-502-3588 or contact us online today!
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