Questions on investing into condos

[Nelson Van]

Hey there you guys...

I’m looking into buying my first rental property and I’ve been running numbers in my area and have a few questions to see what you seasoned vets would think. These are strictly questions for buy and hold investments.

- Are lower margins for condos worth it due to not being responsible for the roof, siding, etc...

- Are there any decreased value on these properties due to the ongoing HOA fees even after paying off the loan?

- Are there any hesitations investing into these properties due to possible restrictions the HOA may have?

Any input would be greatly appreciated.

Thanks!

[David Avetisyan]

As an owner, you will be responsible for the roof, siding, etc. through an assessment fees.

Assessment fees are payments the homeowners' association (HOA) collects from owners to cover expenses the HOA is responsible for, but that aren't covered in the regular monthly fees. Take lawn care, for example. At a condominium, HOA fees typically cover the cost of a landscape service to weed, feed and mow the grass.

Assessment fees can at times eat away at all your profits. This, coupled with the HOA fees can kill deals, if not today, maybe tomorrow.

Your margin of profit needs to be large enough taking into account the above expenses, along with the consideration that the HOA fee may continue to climb from year-to-year.

SFH and duplexes might be a better start to investing.

To your success!