Pro and cons of investing in condos as buy and hold properties

[Troy Kannegieter]

Hello fellow BPers I am considering purchasing a condo in a college town and was wondering what up sides and the possible pit falls were in doing so. Thanks in advance for your input. Troy

[Don Konipol]

Since the total makeup of the residential portion of my investment portfolio is high rise condos, I will share my thinking on the subject

1. Condos are a way to participate in the "urbanization" trend

2. Since HOAs make sure rules are enforced, you rarely have situations of tenants destroying/damaging property or conducting illegal activities from your property

3. Since the HOA is responsible for everything outside the walls, much less time is spent with maintenance and repair items, contractors, etc.

4. HOA fees are higher than repairs and maintenance on most single family properties, so your net income will probably be less.

5. SFR will appreciate more than condos in the same area - areas such as downtown where there are no SFR are an exception.

So in summary, if time, ease and lack of hassle are more important than extra cash flow, condos can be good. You would probably make more money (in general) with SFR.