Thoughts on Investing in Condos?

[Greg Bohn]

I was wondering if anyone had any experience investing in condos. I've heard a lot of people say that they wouldn't get involved in them, but some of the deals I've been looking at make sense. Am I missing any unknown fees normally associated with owning a condo? Are there any things I'd have to look out for if I was interested in investing in them? Any information would be great!

[John LaBanca]

My first property was a condo/townhouse. It's fine as long as the numbers work. You pay a monthly HOA, but you save on maintenance costs. If the association is well run and negotiates good deals, you could potentially pay less in maintenance overall because they're painting and replacing roofs with a bulk discount that you don't get with a SFH.

The two things to watch out for are high HOA fees where the numbers don't make sense, and rental restrictions. Many condo communities are limiting the number of units that can be rented or impose additional fees or restrictions on them.