Condos can be seen as an excellent rental property. At first glance, they are engaging because they often have lower prices than single-family properties. But those lower prices may occur with hidden monthly costs that must be included in your calculations. Therefore, the condos you found in Wentzville may or may not be the best fit for you. Before purchasing a condo to use as an investment property, you should take great care to obtain all of the facts and information you need.
What makes condos such an appealing option? Like many other investment properties, buying a condo to use as a rental has both benefits and drawbacks. On the bright side, there are a few things that make condos an appealing option:
- Lower Cost: In many real estate markets, condos charge less than comparable single-family homes. If you are a new investor or if the cost is a primary concern, this makes buying a condo one solution to overcome the financial hindrances to entry.
- Desirable Locations: Condos usually placed closed urban centers and vacation destinations, to get the attention of renters who are wanting to be near to such areas. In places where single-family houses are in limited supply, getting a condo can help you learn about new and different markets.
- Less Maintenance: When you obtain a condo, particular maintenance tasks regularly finished for you. Condos sometimes have limited, or no yards and common areas usually maintained by a building manager or condo association. It may indicate lower maintenance expenses compare to a typical single-family house.
- Amenities: In addition to maintenance, many condo buildings will have a selection of added amenities. Depending on the condo and management, given services could range from cable and internet, garbage and sewer costs, pest control, and more.
Indeed, acquiring a condo has many potential drawbacks. These negative aspects may even dominate all of the benefits listed above. These drawbacks may include:
- Condo Association Fees: Some condos are part of a homeowner’s association that demands a monthly fee. At times, and based on how many facilities are covered, these fees can be surprisingly high. If such fees cover a lot of attractive amenities and services, they may be worth paying. But you must include all applicable condo fees, including 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 tough to secure financing for a condo than for a single-family property as conventional lenders often have strict rules for such loans. Some lenders need assurances like proof that the condo building is as a minimum 50% owner-occupied or that there are no recent lawsuits against the condo association.
- Renting Restrictions: Some condo associations prohibit when and to whom you can rent your condo. Others may even encourage you to live in or own the condo for a full year before you can rent it out.
- Lower Appreciation: Condos generally gain in value at a different pace than single-family properties. If your investment goals do not focus on carrying property for a long time, buying a condo that won’t appreciate very quickly is not the right move.
Therefore, buying a condo as an investment property only have meaning if the numbers make sense. By understanding all about the true costs of buying and owning a condo, you can make the right choice for your investing goals. When you’ve found the right condo, feel free to contact Real Property Management Three Bridges to help you reach your investing goals. Give us a call at 636-542-8852 or contact us online today!
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