Buying a Condo to later turn into a rental property
Hi,
I’m currently renting in Los Angeles and I hate having to pay rent because I feel like I’m throwing money out the window. But with the salary that I make and the area I want to live in, I can only afford to buy a 1-2 bedroom condo. I’m looking to stay in the Valley; Burbank, Glendale or Pasadena area. My thought process is to buy a 1-2 bedroom condo in one of these areas and live in it till I’m able to refinance on it and put the refinance amount and anything else I have to add to buy a single family house. I would keep the 1-2 bedroom condo and convert it to a rental property. I will then use this strategy again on the single family house and continue to grow my portfolio. What are your thoughts on this?
Most Popular Reply
@Anthony Holloway
I think you are better off buying a condo and live in it for a few years then sell it. Use the proceeds to put down on a 3-4 family rental property instead. This will be a way better strategy because that’s what I did myself.
Here are the down sides of renting out a condo:
- Condo fees go up every year (eating your profits)
Condo association bosses you around
If your neighbor causes huge damage to the property, you’ll have to write a check too.
If there’s not enough money for reserved and something happens, you’ll have to write a check.
Some condo associations don’t
allow owner to rent to tenants if the majority of the units are owner occupied. There’s like a 20 to 80 percent ratio.
Condos are headaches
Investing in 3-4 family rental properties is the best way to go because you have more control. No condo associations to boss you.