Condos as investment properties

[Martin Sterling]

Greetings all. I'm extremely new to real estate investing and wanted to start out as small and safe as possible. I wanted know the communities thoughts on buying condos and renting them out as a strategy? Also, I wanted to know about buying condos in foreclosure.

Are these sound strategies?

What are some pitfalls to be aware of?

What are the best resource to research this strategy?

Thanks

[Jim McLane]

As a realtor and a landlord I own 6 rental properties and they include single family homes and condo/townhomes. The biggest challenge with single family homes is the maintenance even with landscaping services. Even with the condo fees factored into your budget it is much easier to be a condo landlord than a single family home landlord. 

Condos also make better investments for ROI per month due to the lower costs yet appreciation doesn't seem to be as great as a single family home. The biggest mistake I made was buying based on price alone. One condo purchase had an incredible ROI but trying to sell it down the road was difficult. The area had become increasing less desirable and it saw little appreciation compared to other condos I had purchased.

In Florida the biggest challenge is financing on condos. You need 25 to 30% down as an investor so that eliminates many start up investors. The other thing I see happening to condos that are being bought by mostly investors is condos are not allowing a purchase and making a waiting period of a year or two to rent the condo out. They are trying to get rid of investors but in doing so with difficult condo financing buyers are finding it difficult to come up with the large down payment even as an owner occupant. 

I hope that answered a few questions for you