Investment Condos [Calc Review] Help me analyze this deal for my Kids Future!

[Jonathan Bombaci]

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*This link comes directly from our calculators, based on information input by the member who posted.

I’m considering purchasing two investment condos to help pay for my children’s college tuition in 13 to 15 years. While I own quite a few rental units already, I thought condos might be a good option to gift to my kids when they turn 18, offering them a safe introduction to property ownership without too much risk.

However, my challenge with investment condos is that the cash flow always seems terrible. HOA fees, in particular, seem to be the biggest hurdle. Today, I analyzed over 10 condos, and while I found one with a positive cash-on-cash return, it was far from impressive.

I'd love to hear from experienced condo investors about why this type of real estate might make sense despite the low cash-on-cash returns and HOA fees that cannot be influenced.

As a bonus, if anyone has purchased investment properties for their children with a similar goal, I’d really appreciate any insights about your process or results.

I am looking at buying 2 investment condos for my children to pay for their college tuition in 13-15 years. I own quite a few units but thought investment condo would be a good one to give to the kids at 18 years old where they couldn't get into too much trouble. My problem with investment condo's is the cashflow is always horrible. The HOA fee seems to be the killer. I analyzed over 10 today and this was the best one with a positive, but unimpressive COC Return.

I'd be interested in hearing from condo investors about why this real estate product makes sense even with the low COC returns and HOA fees that cannot be influenced? Also, as a bonus if anyone has done something like this for their kids, I'd be interested in hearing any feedback about the process or results. 

Thank you in advance for any feedback or comments. 

Best,
Jon

[Matthew Becker]

I think you are right on.  Condo's don't pencil well.  If you really want to help them.  Buy 1 or 2  house close to your home or at least someone what close depending on numbers.  Or a small complex.  Take them there for the next 15 year.  Have them clean up, Paint, and learn.  I swept out my dads places when I was 7 for $2 and that is not $2 an hour, mowed 20 rental yards when I was 10.  Painted a 2 story house when I was 12.  I learned I don't like to do any of that stuff.  But I bought my first house at 19 and kept going.  Education and hard work are worth far more than money.  If they have a taste for it then use the equity to buy a rental where they go to College and have them manage it with roommates in it.   

I have only have girls and they are much more capable then your average boy so don't let that affect you.   They can get dirt and out work most men.  Start the early.  Then they will have strong work ethic.  The only problem then is them finding a man that is worthy of them when they get older.