Thoughts on condo investments?

[Brian Ellis]

I just closed on a condo.

163k purchase price 

5k in renovations (diyer) 

Rent $1700 

COC return = 14%

The only downside here is there won’t be much appreciation. It’s a small purchase price for my area. So I figured it’s a good hedge against inflation and at least my savings is bringing me a return. I also removed my ability to invest in larger deals shall one come along. 

What is everyone’s experience with condos as an investment? 

[Holly Frongillo]

Congratulations on your purchase! IMO there is nothing wrong with a condo as a first investment property versus a single family or multi family. 14% COC RPI is also a very healthy percentage. Yes, there is only one unit to cash flow from, but it's less money down and costs you less up front. You can still count on around 3% (conservatively.. with the way the market is currently 5%+ is probably a safe bet if this continues) rent increase per year. After a year or two and whatever minor reno it seems like you're doing, you'll be able to cash out refi (and potentially combine that with a heloc) to buy another property.

The first step is the biggest step and you've made it! So again, congratulations!