Best property for rental

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I'm in East Granby, CT and looking to buy my second rental property.  I currently have a condo that I am renting out but it wasn't originally purchased with investing in mind.  I've heard and read quite a bit about people's bad experiences with condos and high special assessments, but haven't had any bad experiences with that at the current complex.  On top of that I did insure myself against special assessments.  Anyway, I was originally thinking about getting another condo, but now am scared after all the horror stories.  Should I get a single family house instead? Condos are so much cheaper and really easy to rent out.  I am considering a duplex as well but those seem to be harder to find in this area.  Any thoughts and suggestions would be appreciated.

[Michael Boyer]

Great question, Ida... One thing about condos I have found (just being on 3 different boards in the past) is that they are all so unique. 

And, as you know, this requires extra due diligence and caution.For example, you may see two associations in the same area or neighborhood, and both complexes look comparable. 

But as you dig deeper....One may have sterling financials, strong management, active maintenance, and great reserves, along with mellow politics and an accepting view of investors (no restrictions on non-owner occupieds, with a fair ratio of owners to renters to preserve all financing options).. Whereas the other similarly located association may look , from outward appearances, very comparable but on closer inspection you find it may have little/no reserves, a management crisis, hot politics (think owner disputes even lawsuits), and be anti-renter (due to unfriendly policies or even outright prohibitions).... 

So, rather than throw the baby out with the bathwater (saying all condos are bad, for example), you may be on to something. If you have found one good association, you could even get some economy of scale and look for another unit in the same complex (I did this at two associations, just bought a second one there if it was going well; even easier to manage, as two were even next door!).... So you get a "duplex" like situation with two nearby units.

Good condos can also be easy to manage and market (if you look to sell later)... And, as you mention, your market also dictates what is available, at what price etc. So if you face a lack of 2-4 units, the multiple condo strategy could work. Yes, dues and assessment can eat up your cash flow, but you also (again, in a good association) are getting something in exchange for the dues dollars such as management, insurance, Cap ex, all exterior maintenance and repair, landscape/snow, common area care, etc... Which perhaps highlights the key point. If you are unable or not interested in doing more of the hands on exterior maintenance (or even interested in hiring it out and that oversight), the condo can be a good vehicle for investors. So lifestyle and your own skills and time may be a major factor in whether to go with low maintenance (no exterior work, for example) condos over a duplex (where you or someone you hire will need to do the yard, snow, gutters, painting, etc, etc.). Best of luck..