Some reasons why I don't like to invest into condos!

[Alan Asriants]

Personally I don't like condos for investment

Here are some reasons why:

1. Rules and regulations - I am not sure when they can change. It can be possible that rentals are no longer allowed in the future. This can really hurt and investor and the condo's value

2. Management - Since I am not in control of the management company, I am not sure how the handle certain issues. This can hurt the value of the condo and make it a headache to deal with even the smallest issues

3. Renovations - Condos have more restrictions on renovations and can make it difficult to make the place how you want it. Also if it is a large building it might be more annoying for contractors to work and go up and down floors, costing you more!

4. Financing - Not all condos are financeable. Especially as an investment property or using loans like FHA or VA. This is especially true for condos that have a high amount of rentals. There is actually a limit on the percent of rentals a condo can have to be financeable.

5. Reserves - Also for a condo to be financeable they must have enough money in reserves for any future capital expenses or even enough funds for lawsuits. If they do not have enough reserves there can be a reassessment and will come out of your pocket. This can be expensive!

6. Monthly Fees - while many of the monthly fees can cover regular expenses, the fees might be too high for an investment property. Since you are concerned on having as much cash flow, high condos fees will eat into this and crush your numbers. HOA's can make more sense.

While I personally don't like investing in condos, it doesn't mean that it is a bad investment for some. I even have family members invest in condos and they do just fine. What are some reasons why you WOULD invest in a condo?