Questions about Condo Operating Expenses

[Christine Prelaz]

Hi, I am wondering what operating expense percentages people are looking at when considering condos.  I'm guessing 50% is too high in general but not sure what might be best for a quick analysis.

Also, I know this might be tough to answer based on area etc., but any guidelines on HOA fee limits that you consider would be helpful.

Thanks!

[Brett Chaponot]

Hey @Christine Prelaz, I've done some Denver investing in condo's. Made some GREAT money there. But every property is different. HOA fees vary from $50 - $450 on properties. Denver HOA's aren't as strict on owner occupants as they seem to be here in Sacramento, CA. But I got a town home in the dayton triangle in 2014 for $234k, I rent it for $2K a month, and my HOA is $307 but I still cash flow very well. I have almost no expenses on the property yet. I think condo investing is a great way to start a more conservative portfolio because the HOA is responsible for a lot of items. We just got new roofs, siding painted, and my renters love the pool in the summer.

So, I think you're looking at the wrong figures unless you're looking to buy a very old condo that needs a lot of work. The HOA fee is the biggest factor considering mines is 38% of my mortgage. Insurance is pretty cheap there for investor condo's. I think I pay $50 a month.