Condos Buy and Hold : Why the resentment?

[Andrey Y.]

So I have been listening to several podcasts, which are all awesome and super-informative. Can't think of a higher yield source. (See www.biggerpockets.com/show75 specifically) and there seems to be a mistrust or no interest in the buy and hold strategy with condominiums. The issue also occasionally comes up on the forums.

The biggest argument against it is the evil associations, with people that are power hungry, and may raise the maintenance fees without you having any control over it. And I get that. I will address all this in the coming text. 

If you are investing in single family homes, people glady accept that they will have to pay roughly 50% of the rent on expenses sans debt service. For multifamilies, the number is closer to 60-62%. I wanted to get your guys input on all this. For multis @Ben Leybovich 

Now I look at these numbers, and how are people okay with this?

Hear me out some more. 

1. If you buy a condo that has association fees, at least 50-75% of tenant phone calls for ANY reason (repairs, grounds, etc.) can be eliminated.

2. We all value our time. Why should we be tasked to find handymen, contractors, and coordinate how they get payed? Not only that, make sure the appropriate work gets done and the tenant is happy, and the contractor gets payed. I think this is a huge time saver in condos because a lot of these phone calls are effectively eliminated.

3. I think its an art to find a well-maintained condo with low maintenance fees relative to rental income. Just like anything else in RE, we need to do our due diligence.

4. Also, let me address this concept of 'whoa they can raise the maintenance fees at their whim, and you have no control over it.' Listen, I have never heard of maintenance fees DOUBLING in 5 years or less. Even 10 years or less would be rare.

5. Things like HVAC, roofs, grounds, windows, siding, etc. are just things that you don't have to worry about when investing in condos.

6. About power-hungry association members.. so what?? You can lay on the beach, travel abroad, spend time with friends/family, and let them hash it out. Rest assured that even if the maintenance fees get raised, you will never have the expenses (and your time spent, this is HUGE) of a single/multi unit. This is assuming the appropriate due diligence, as we do with every investment.

So why are single/multifamily investors OKAY with paying 50-60% of rent in expenses? I am early in the investing game and I am still trying to wrap my head around that. I think with condos, $400-600/month cash-flow is all day everyday. With SFH/MFH, mostly people are happy with $100-200/door, and the $500/month are those rarer instances where the market is down and a fantastic deal has been found by the investor.