The Condo is considered the best investment when it comes to real estate. They are the best option for rentals and very easy to manage too. However, if you are a new investor, you should be careful. If you plan to invest in Condos, you have to keep a few things in mind. Here we are discussing some basic things about condos, which will help you make a wise decision.
What is a Condo?
A condominium known as Condo is a small residential unit part of a housing complex. The owner of every unit can be a different individual. If you want to use it as a rental unit, you will be dealing with tenants directly. Owners of condos are responsible for the maintenance and repair of the unit. They also have to pay condo association fees. These charges are used to maintain shared community areas like garages, elevators, hallways, and other similar structures and facilities. Condos are usually part of high-rise buildings, but detached condos are also available.
Is Condo a good investment?
Many people are interested in condos just because they are simple. You have to take care of your unit only, and the society will manage all the outside things like driveways, lawns, elevators, etc. Older investors are interested in condos because they are very easy to manage.
Let’s discuss the pros and cons of condos, which you may find helpful.
Advantages of investing in condos
Investing in condos has many advantages for investors. Here we are discussing some vital ones.
Easy management: property management is very easy with condos. There is no need to worry about the exterior of your residential unit. Snow cleaning, lawn mowing, and tree trimming are not a problem for the owner. The owner has to take care of the interior only. Exterior maintenance is the responsibility of the condo association. However, you have to discuss with the condo association about your responsibility as a condo owner; every association has its own rules and regulations. The best thing is to read the contract carefully before buying a condo. People love to live in condos after their retirement, as they can participate in different activities, and professional handy-persons can help them with repairing jobs.
Affordable housing: Single-family homes and townhouses are more expensive than condos; they all have almost the same amenities. For condo purchases, you will need a little down payment. The price of a single-family house in the USA can be as high as $360,000, but the price of a condo is $280,000, and the same difference exists almost around the world. So, this is a great investment opportunity for new investors who want to start working with a limited budget. If you are buying it as a rental unit, don’t forget to add the fee like the association fee, maintenance charges, and taxes.
Property value appreciation: In the past single-family homes were the most attractive residential units and had a high appreciation value. However, over the years, the trend has changed now. The value of condos has increased by more than 38%, while single-family homes' value has increased by 27% only. Why is that so? Condo associations preserve the value of your Condo. You need permission from the association to make any changes to your Condo. For instance, the association doesn’t allow business activities in condos. In short, the association does not allow any activity which leads to value depreciation.
Security: condos are located in gated communities, so they are very secure. There are more guards, and entry points are also locked or supervised. Visitors have to show the invitation card if they have to visit someone in the Condo. Every Condo has an intercom to communicate about the guest's arrival and approval. This type of security reduces the chances of robberies. Residents who are living alone can enjoy complete security.
Amenities: Condo communities enjoy the best amenities. There are gyms and swimming pools to take care of your health. You can enjoy yourself at the clubhouse and have a walk on the lawn. It is very easy to socialize with your neighbors. Using it as a rental unit, you can quickly vet new tenants as everyone wants a good lifestyle. It maintains positive cash flow, and you will have a steady income source.
Disadvantages of investing in Condos
There is no doubt that being a condo owner has many advantages, but there are some disadvantages.
Association fees: condo association takes care of all outdoor maintenance and repair activities. You have to pay the association fee every month. This fee can be a burden on your budget, particularly if you are paying a mortgage. Association fees depend on various factors like the location of the Condo, the size of the community, and the quality of amenities. The fee increases every year, and you have to plan the budget carefully.
Limited freedom: usually, a condo association has the power to limit the number of rental units in a community. If the number is already met, you cannot rent out your Condo. Moreover, the association also has the right to restrict the length of the lease and the number of occupants in every Condo. Check the association rules before buying a condo, and make sure your tenants comply with the association's requirements.
How to find a condo near me?
It is simple to find a condo. Firstly, contact a real estate agent. Agents have connections, and they can help you find the best possible option. They can help new investors, particularly. Secondly, you can use an online investment tool to help you through your real estate investment journey. Other than that, you can check off-market listings as well. They are not available on public platforms, but they have the best condos. You can find them on social media platforms and other unconventional platforms.
These are some basic facts about condos; you can buy a condo as your first investment property, but make sure to read the condo association rules.