Condos as investments?

[Mehgan Moore]

I know typically Condos are not the most ideal investment as they don't tend to appreciate. However, we are considering them as a potential rental investment. Given the tend to be cheaper, we could pay most of it in cash and the cash flow would be higher. We would plan on keeping it as a long term income producer. Any advise on this? Thx

[Eric Sanders]

Hi @Mehgan Moore, I recently purchased a condo in January, and since then there has been ups and downs. 

Cashflow and ROI is better than anything else I've seen since looking for almost 10 months now (I think I'm at 18% CoC not including equity) and I haven't had to worry once about maintaining the property or anything like that.

The downside is the HOA president has complained about tenants being too noisy, and I've had to field a number of calls from her in the past. Too many noise complaints and I can get the HOA board to fine me as they see fit. I'd highly advise looking into condos that are built well with flexicore / concrete with decent soundproofing.

If you're worried about the HOA costs increasing, I'd also advise asking for a 5 year forecast on anticipated expenses and improvements. Sometimes they may not be able to give you that info but some good associations can give you an idea as to what's coming for the next few years.

Hope this helps

-Eric