Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Condos can make very good investment properties, I have some units with <$200 condo fees, in the unit capex costs are very low, they rent fast and the rent is high in comparison to cost when compared to a SFH or townhouse. I can gut a unit down to the studs and replace everything for about the same cost of a new roof on a SFH. I like townhouse style condos, they tend to have low condo fees where as mid rises and high rises usually have really high condo fees. The less utilities included in the condo fee the better, renters just assume utilities are free so they will leave windows open, turn the heat up higher than they normally would and just generally waste more water and energy. Which of course everyone ends up paying for through a higher condo fee.
HOA fees also depend on what is included and if the owner or renter would be interested in using those items that are included. Many condos include water, hot water, cable TV, some include fast access internet, some have social rooms, some have computer rooms, some have copiers, most have pools, most have gyms, some have covered parking, some have storage rooms, some have bicycle rooms, some have concierge, some have security, some have a/c units or chillers on the roof, thus much of the electric costs for living in a unit are in the HOA, all include electric for outside lighting, taking care of the grass the plants and gardens if any, taking care of the roads, sidewalks, painting the outside, re-roofing, etc, thus a person would have to account for all those costs on a home and decide if living almost trouble and work free would be worth the difference over and above those costs.
When buying a condo for investment or otherwise, make sure their reserve is fully funded or if not then assessments could heavily cut into profits.
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,306 posts, read 8,469,695 times
Reputation: 16586
Lot's of people here report the profits on Condos to be very good. However no one has said what a SFH in their area has appreciated to in comparison. You could have a condo you bought for $600K and sold for $750K years later for a 25% gain. That's probably certainly a good return. But in the same time space maybe a a SFH could have gone up 30 or 40%. It really just depends on the area and the cycle real estate is in.
I have been a real estate investor for many years and always try to keep track on trends.
It always comes down to the saying " All real estate is local".
It always comes down to the saying " All real estate is local".
Correct. All depends on the regional market as well as the individual property. There will always be individual properties that are exceptions to a regional market, just as regional markets may be exceptions to broader regional or national trends.
Realistically, I think only very few people are successful in real estate investments. It really is a part time or full time job that takes away from time that can be spent in professional and personal development. Who wants to deal with management companies, tenants, contractors, designers, non-resident taxes (if you ever think about buying vacation homes or condos in Hawai'i), etc. for properties that aren't even your own primary residence. Yuck.
I've heard this general accusation more than a handful of times...insinuating that compared to a single family home, a condo is simply not a good investment.
Considering that homes aren't necessarily good investments either, I am wondering what is this statement usually based upon?
Basically, when this is said why is the assumption an actual house is a better purchase compared to a condo?
it's based on the fact that building maintenance is dependent, basically, on a bunch of strangers. You can't assume they'll be responsible and attend to maintenance and repair in a timely manner. They sometimes neglect expensive items like paying for a new roof. The monthly dues in some instances hasn't been calculated with periodic big-ticket items like that in mind. So you don't always know what you're buying into, or if, once you buy in, maintenance will take place as needed.
A good realtor will make sure he/she goes over the condo reserve and financials, HOA meeting minutes, etc. with his/her client before finalizing the purchase. An experienced realtor will also already know which condos to stay away from in the area. Also, properties managed by professional property management with experience in condos tend to do better in terms of reserves and maintenance because they can help the HOA identify key issues that need to be addressed, hire reserve analysts, and enforce rules/maintain common property in a condo. I would stay clear of self-managed condos. Also, once you are an owner, always elect people to the board who are interested in making sure the HOA has adequate reserve rather than people who say they want to minimize fees.
Last edited by hellopity; 01-29-2017 at 12:58 PM..
Lot's of people here report the profits on Condos to be very good. However no one has said what a SFH in their area has appreciated to in comparison. You could have a condo you bought for $600K and sold for $750K years later for a 25% gain. That's probably certainly a good return. But in the same time space maybe a a SFH could have gone up 30 or 40%. It really just depends on the area and the cycle real estate is in.
I have been a real estate investor for many years and always try to keep track on trends.
It always comes down to the saying " All real estate is local".
I don't dare report here. I might get banned if I do.
My first question is why people keep saying "condos vs. homes." Is a condo not a home? So what if its on an upper floor? Mine sure is.
As for the investment value, I don't know relative trends. But dues seem fine to me. The dues in a well-run building take care of most repairs and maintenance, a staff, some utilities, building insurance, and amenities like an onsite gym. I can receive a package or have an interior repair done when I'm out. There's almost zero risk of a break-in. Barky dogs and loud stereos get cracked down on, so it's quieter than most houses, aided by the concrete construction. Stairs mean no wait for the elevator. And the convenience of being just outside of Downtown is incredible.
In the context of this discussion, I think people are using homes as a shorthand for SFH as opposed to townhouses or condos. Agree with your other points about a well-run building.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
