First time buying a rental property for investment dilemma

[Jenny Kao]

Hi all, I'm a newbie to real estate! Currently, I'm looking to buy my first rental property. I'm looking at single family home (3B2B) or condo in either AZ or CO. However, most single family home price seems to be out of my range (low 300) and condos all have high HOA fee, which I'm not sure down the road if it's worth it. Should I be looking at other states instead? Seems like there are a lot of experts in this community, therefore just wanted to get some thoughts. Thanks!

[Randall Alan]

Quote from @Jenny Kao:

Hi all, I'm a newbie to real estate! Currently, I'm looking to buy my first rental property. I'm looking at single family home (3B2B) or condo in either AZ or CO. However, most single family home price seems to be out of my range (low 300) and condos all have high HOA fee, which I'm not sure down the road if it's worth it. Should I be looking at other states instead? Seems like there are a lot of experts in this community, therefore just wanted to get some thoughts. Thanks!

@Jenny Kao

Beyond the HOA fees, there is the HOA itself and their rules… many of which could stand in your way as a landlord. Many associations have limits and restrictions on renters in their community. From what percentage of Renters allowed to how long you have to wait to be able to rent (sometimes multiple years). Then there are the upkeep requirements that renters may not want to follow, followed by the potential of assessment for things way outside your apartment. I read a story recently where a high rise condo found out all their railings needed to be replaced. It was a $15,000+ special assessment per unit. That will put a dent in your P & L statement for a few years!

For reasons like those I avoid HOA communities in my portfolio. iIt is much nicer to have complete control of your properties!

All the best!

Randy