Condos may sound like a profitable rental property. At first sight, they are appealing as they always have lower prices than single-family properties. But those lower prices may come with hidden monthly costs, which should be included in your calculations. For these and other factors, the condos you found in Portland may or may not be the best fit for you. Before acquiring a condo to use as an investment property, you must be very mindful of accumulating all of the details and information you need.
What makes condos such an appealing option? Similarly, as with many investment properties, buying a condo to use as a rental has both benefits and drawbacks. On the positive side, many things that make condos an attractive choice:
- Lower Cost: In various real estate markets, condos cost less than comparable single-family If you are a new investor or if the cost is a primary issue, buying a condo is one way to overcome the financial burden to entry.
- Desirable Locations: Condos are mostly situated in the urban centers and vacation destinations, making them attractive to renters who want to be close to these areas. In places where single-family houses are in low supply, obtaining a condo can help you learn about new and different markets.
- Less Maintenance: When you buy a condo, some maintenance tasks often carried out for you. Condos usually have small or no yards and common areas usually maintained by a building manager or condo association. It may result to lower maintenance costs than a standard single-family house.
- Amenities: In addition to 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, obtaining a condo has various potential drawbacks. These negative factors may even compensate for all of the benefits listed above. These drawbacks may include:
- Condo Association Fees: Many condos are a member of a homeowner’s association that charges a monthly fee. From time to time, and depending on how many services provided, these fees can be surprisingly high. If such fees cover a lot of attractive amenities and services, they can be reasonable to pay. But you need to include all associated condo fees, along with 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 challenging 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: Other condo associations limit when and to whom you can rent your Some may even require you to live in or own the condo for a full year before allowing you to rent it out.
- Lower Appreciation: Condos mostly gain in value at a different pace than single-family properties. If your investment goals do not settle on keeping a property for a few years, buying a condo that won’t appreciate very quickly is not the practical choice.
Finally, buying a condo as an investment property only makes sense if the numbers make sense. By understanding as much as you can about the true costs of buying and owning a condo, you can decide what best matches your investing goals. When you find the right condo, don’t forget to contact Real Property Management Assurance to help you with your investing goals. Call us at 971-270-2600 or contact us online now!
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