Is it still worth investing in condominiums?

Question

Hi,

There are quite a few new listings of condominiums in the Kansas City Downtown. However, in the current market across the nation, the demand is for single-family homes, and not sure if the condominiums are worth buying. They are hard to sell and hard to appreciate.

I did the math for one of the listings in the Kansas City downtown condo ("The Manhattan") and there is no positive cash flow. The apartment is like 150k and there doesn't seem to be having positive cash flow. Rents are in the range of $1000 but not more than that.

Alex Olson · Answer

@Vijay Chadalavada In the last 20-25 years Condos in Kansas City have been a poor investment compared to other asset classes. They take the longest to sell and have the worst rules regarding STR, HOA dues etc...And, HOA and STR rules could change without notice. You are MUCH better off finding a single family home for a decent price. Or, better yet, a multifamily property.

Matt K. · Answer

I'd pass on most downtown and even the burbs. I've seen a few that worked before prices went out of control, but they were the exception before everyone had so much cash to throw around.

Lately all the ones I have seen that come close to penciling out had rental restrictions and either required board approval to convert into rental or didn't allow it but potentially could if you cleared a waiting list.

Now, with that said townhouses or half duplex can work if you're lucky and right place right time haha

Nick Shri · Answer

I despise Condominiums. One special assessment and you will never recover, HOA fees will keep increasing and that will prevent any appreciation. And gazillion other HOA rules preventing on renting, parking, what to keep on balcony, what color curtains and on and on and on. They are cheap for a reason.

Berek Dollinger · Answer

I think Robert Kiyosaki said the last things to turn profitable before a market downturn are Condos.

Foti Karastamatis · Answer

DON'T DO IT! For every reason stated above and a lot more... If you need more reasons NOT to buy, hit me up.

William Costello · Answer

I would look into single family opportunities or bigger picture with large multifamily investing. Condos in some situations can be good for STR. What markets are you looking in besides KC?

Caleb Brown · Answer

I would look at Single Family's if you are putting in a long term tenant. They are around the price of condos and range from 2-3 beds. Condos can be good for STR but you'd need to look in regulation and the bylaws. If they are allowed there is a chance the association could get rid of them.

Katherine Wiltse · Answer

I have crunched the numbers on condos and haven't found a way to cash flow, unless you use the condo for a STR or do a co-housing (rent by the room) strategy. A lot of condos are advertised on Airbnb in Branson, but I wonder if there are any restrictions in Kansas City? Something to look into. Keep the forum updated, I would be curious if you found a successful and lucrative model for condos.

Is it still worth investing in condominiums?

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