Condo Rentals vs Single Family Houses

[Alexander L Gulledge]

Hi All,

I'm looking for a second rental property (my first is a single-family home and I was hoping to find another as a buy and hold investment) and with the current market, I'm having trouble finding deals that make since. Using the calculators and doing my own research, the SFH I find that would cash flow well (>$300/mo net) are all in less desirable areas. This is leading me to consider investing in Townhomes / Condos. The rent to price ratio is better for these and I'm seeing some that could make since. I'm just unsure of this asset class and have heard horror stories about dealing with HOA/Condo rules etc.. Wondering if Townhomes / Condos could be a good buy and hold investment? Im in the Columbia SC market. Any thoughts or advice would be greatly appreciated. Do any of you have townhome / condo investments? How has that worked out for you? Thanks!

[Brett Deas]

I would definitely read the minutes first with the HOA docs before closing the property. From my personal experience, I did not like my first investment for a while because the Condo association was terrible. We were using it as a mid-term rental so the costumer service expectation is generally higher than a long-term rental and with all of the problems the tenants wanted discounts from us even though we could not control the problem.

That being said condos can be great for cashflow just vet out the association first and make sure it is actually doing what it says it is doing.