Real estate investment has been and continues to be one of the most popular and accessible forms of investment. You can invest in a myriad of real estate options, from apartments to strip malls and beyond. Condominiums are a type of property that people often confuse with apartments. However, the difference lies in ownership. Landlords privately rent out condos, while with apartments, one proprietor owns all units.
The question is, why does this type of property often go overlooked by investors? To find out the answer to that question, let’s take a look at whether investing in condos is a good or bad idea.
The Advantages of Investing in Condos
For many investors, one of the main advantages of investing in condos is the lack of maintenance involved. With condominiums, you don’t have to worry about hiring a team of contractors for lawn maintenance, roof repairs, and other forms of exterior maintenance. It’s the responsibility of the homeowner’s association (HOA) to take care of these things and maintain the aesthetics and curb appeal of the property.
You also get the added bonus of not having to invest in amenities such as gym areas, a pool, onsite laundry, or other common areas. Investors get all the benefits of amenities in terms of attracting tenants without having to spend extra money. As a bonus, condos cost much less than your average single-family home, making it easier for first-time investors to get their foot in the door. Condos also tend to be in and around densely populated cities where the demand for space is high, so you can raise your asking price.
The Disadvantages of Investing in Condos
Although not having to worry about maintaining the exterior of the property is a bonus, for many investors, having to pay the extra HOA fees is a huge downside. While, of course, you can include this fee in the rent price, these extra fees can turn buyers away. This, paired with the fact that many condo associations won’t let you rent out a unit, makes many investors feel like they’re wasting their time trying to invest in condos.
Another disadvantage of investing in condominiums is that if you no longer want to be a landlord, selling a condominium can be difficult. This is because you’re directly competing with the surrounding units. For example, if you’re trying to sell your three-bedroom, two-bathroom condo for 350,000 dollars, but other similar units are selling for 250,000 dollars. You’re going to have a hard time selling against those competitive prices.
Is Investing in Condos Right for You?
Now that we’ve reviewed the pros and cons of investing in condominiums, the real question is whether investing in condos is a good or bad idea. Unfortunately, there is no simple yes or no answer. It all depends on the current market conditions, whether you can find a good deal, and how much you’re willing to invest. If you can find a condo unit with an association that lets you rent out, it may be worth investing. If not, it may be worth investing in a single-family unit instead so that you can get the most bang for your buck.
Whatever you decide to invest in, let Excalibur Homes help you manage your rental property. As one of the top home rental companies in the southern US with over 30 years of experience, we have what it takes to make owning rental properties easy.