Are Condos a bad investment???

[Steven DAmbra]

brand new here, first post.. this site looks awesome though..anyway....

-Almost ready to buy my first home/ investment. I never hear anything about buying/renting out/selling condos. Are they a horrible investment? Does anyone have any experience with condos? Please and thank you

[Andrew Kerr]

@Steven DAmbra welcome to BP! 

I rate condo's and townhouses in the same category. They are SFR, but require minimal if any exterior maintenance, but have an HOA.

It seems a lot of folks don't like the idea of an HOA as they put restrictions on owners. Some HOA limit the number of rentals in a building/complex. Some don't allow short term rentals. Some require you to be vetted before you can even buy.

Other folks like the idea of paying a flat fee in dues to the HOA because they know they don't have to worry about cutting a lawn, maintaining a pool or fitness center, repairing or painting the exterior and so on.

I bought my first property at the age of 20, and bought a townhouse specifically because I wanted an HOA. I had no desire to cut a lawn, or worry about any exterior maintenance. I also wanted a pool to use.

I have also owned multiple condos as rentals and did very well with them.

One thing a lot of folks miss, or don't know how to do is to vet the HOA. They have financial controls over the complex, and can get in financial trouble, or keep dues so low they don't build reserves to replace all the siding in 20 years. This leads to the dreaded assessment. I have been assessed multiple times, for updating sprinkler heads, painting exterior doors, building the HOA reserves to sub-metering. All of which I knew about before hand, and voted to have done because I was an active part of the HOA and new the items were needed. I went to the meetings, read the budget, raised points of concern, and even served as vice president of one HOA for a year. Like any investment, you can't be hands off, and being mindful of the HOA is part of the process if you want to own a condo.