Condo Vs Home Investing
Topic: condo, investing, home, real estate, article by Tony Stern
As you look for ways to invest in real estate you come across a few options that have you intrigued. Homes are available for sale and they are a smart investment. However, they also cost a lot and if you are looking for something that’s low-maintenance, condos may offer a better option. One thing you have to make sure you look for is condo associates that allow you to rent out the units.
With plenty of options available, you have a decision to make. Your budget may influence that decision even more. However, putting budget aside, here is a breakdown of the advantage each option offers:
Condos are more affordable to purchase, easier to maintain and rent out. Rather than hoping to find someone who can afford $2,000 a month for rent, you can rent a condo out for half the price. You also have the benefit of showcasing the advantages of the property; gym, pool, landscape, etc. Another great advantage is that you only have to worry many times about maintaining the inside, not the roof, the outside walls, & landscaping.
Homes do have their advantages including being able to find ones with no monthly association fees. You also do not have to worry about the association influencing your situation. There is usually less issue with neighbors as you are more secluded and don’t share walls with them, and you can make a larger profit off the rent once the property is paid off since there’s no monthly association dues.
Again, both options give you a lot of advantages. If this is your first time buying and renting out a property, condo’s come with less risk because they are not expensive and usually are easier to sell or rent out. If you are interested in holding the property for 15-20 years, then you may be better off looking into buying a house. It offers more long-term benefits financially as well as gives you the opportunity to make upgrades to increase the value before a sale.
Remember, the market will also influence your decision so it’s important to take a look at the value of property. Some condos seem like no brainer decisions as their prices are super low but the rent is sky high. Closer examination might reveal the condo has an upcoming large assessment for a new pool or other major expense that every condo owner will need to pay, some assessments are in the 10’s of 1,000’s of dollars! Another reason condos might have suppressed prices is they are highly restrictive like a 55+ only where you have to be 55 or over to live there. After the great recession many condo associations in Florida especially enacted new rules barring any new condo owners from renting for 1 or 2 years after purchase. Always do the research and get good at finding the details, it usually is the difference between millionaire investors and failed ones!