I am looking at a luxury re sale condo, for my permanent residence, in a private community, which is located in one of the less prosperous areas of town. With that said, the quality of this neighborhood has slowly been improving, and there is definitely a lot of possible upside due the centralized location and slow revitalization that has already occurred over the last few years. Who knows if it will continue and at what rate; I feel the downside in the quality of the area is limited, but who nothing is a sure thing of course.
With this said I am wondering what you guys can advise on buying such a property?
I always look at a primary residence differently than an investment property for the simple reason that I don't view my primary residence as an investment per se, although I am well aware that there can be huge profit potential on a primary. For me, it comes down to risk tolerance and what you can put up with.
Beyond that, I don't like condos because of HOA fees (not deductible) and special assessments, which can really put you in the hole. I would also try to find out what percentage of the units are owner occupied. The last thing you want is to buy into an absentee owner property. You'll be paying more to own whereas everyone else will be renting and that won't do very much for your resale value.
Alex, I am not a fan of condo's for the same reasons Brian states. The only reason to buy as you describe it would be if it were dirt cheap, and only then if you could stand the neighborhood, it might get worse :D . Jim