Thoughts/Experience in Condo Investment?

Question

Does anyone have any thoughts/experience on condo investment properties? Seems like it is a mix as I go through some of the old forum posts, but wanted to bring back up the conversation. Yes the HOA is a fixed cost and yes there are some associations that don't allow leases year round. Assuming the building allows long term tenants and HOA is considered in the cost per month some numbers seem to come out in the 5-6% CoC return. For a low barrier of entry for someone new to REI was looking to see if there are thoughts or experience in condo investments? Thanks!

Jonathan Greene · Answer

I think they are great for starters, especially as a live-in for a year, and also as part of a balanced portfolio. I agree with @Justin Phillips that the legwork is all in the HOA in what you can do with the place, be it rental status, Airbnb, rent to own percentage, percent down needed, whether or not it's FHA-approved. For new buyers, I like the live there one year, then learn to be a landlord the next year and then in year three, look where you are and see what you should do. It's safer of course since roof and windows and maintenance on the exterior are not on you, as well as other things inside a complex.

Garrett Lawson · Answer

@Mark Sinclair good post. I was just looking at Condos in Queens today with this exact question in mind.

Mark Sinclair · Answer

@Justin Phillips Thanks for the feedback and the items to look out for! Seems to be the most important part is making sure you are aware of the rules and what HOA includes and doesn't. Appreciate the tips!

Justin Phillips · Answer

@Mark Sinclair I'm a fan! They're definitely not the very most ideal property type, but who is getting their ideal property in this market? I like them because the maintenance is much lower, and there's always a rental market for them. Find a good tenant, and at times you'll probably forget you're even a landlord. If the numbers work after HOA and higher taxes, go for it! Just be sure you know what's included in the HOA. Sometimes it can be an unwelcome surprise finding out sewage/water actually aren't included in the HOA cost. A nice, safe complex is another thing to vet out. With 100's of "neighbors" in a complex, a bad egg or two can really go a long way towards making them not a great place to live. That's another advantage to a well run HOA/PM, they should help take  care of issues in that vein.  Let me know if I can answer any further questions. Happy hunting!

Mark Sinclair · Answer

Thanks for the feedback everyone! I've been looking into the process a little bit more and find exactly what was talked about (HOA contingencies and association rules) to be the most important things to consider. There seems to be an upside with the maintenance being covered (especially being a long distance situation). Will continue to search and research. Thanks for the feedback!

Thoughts/Experience in Condo Investment?

Most Popular Reply