Condos are not new, but from an investment standpoint, they are very new to many. For years, we have been taught that homes, single-family homes especially, were the best in real estate investing. Now we are being told differently and with good reason. Your costs of owning a home over a span of 20 years will probably include a new roof. That new roof is going to be $25,000 or more. A new roof on a condo will cost you a fraction of that.
The same goes with most other expenses, not to mention the fact that you do not have to worry about upkeep on the property the way you do a house. Even better, they are easier to rent out than an entire house. Even AirBnb with a condo offers a great opportunity for investors and condos are far more affordable in the long and short-term.
Advantages Of Condos
Look at the math and compare a house with a condo over the next 20 years. Forget mortgage, taxes, insurance and HOA for a moment. What is going to actually cost you more money to keep every month? Add all the other stuff into the fold and even with the HOA, you are saving money on the condo that you would not be able to save with a house.
That’s a big factor to consider. A lot of investors do not have the funds to get into the housing market but a condo could provide them with a better option, especially if they need to see a quick return on the investment. If you need the property to start paying for itself, a condo can accommodate you because it can usually be rented out much faster. Whether you find a renter or do AirBnb, you are seeing a faster return to help you cover costs.
Advantages For Investors
Remodeling the kitchen, bathroom and other areas of a condo will usually cost much less than that of a home. The living costs are less, sometimes even with the HOA factored in. If you are not sure what is a better long-term solution, you need to look at what homes are in your area as far as prices go, and then look at when they were built.
If the homes in your area were all built over 40 years ago, that means there is going to be a lot of wear and tear on the building and you will be on the hook for replacing everything. With a condo, that challenge is minimal and so are the costs. Keep in mind, it’s also sometimes easier to sell a condo, even in down markets.
Focus On New Construction
If you are looking to invest in condos, meaning either hold it for years and sell it, or rent it out, new construction is always a better option. Yes, they cost more but you will have a far easier time with renting and resale down the road because you invested in new construction. Older condos become much more difficult to sell and get full value.
Realtors work with homeowners and condo owners alike. The difference is in understanding what the property can allow you to do in the short-term. If you are limited in your options and want to invest in real estate, condos may be the best place to start.
