Run Down House vs Newly built Condo

[Alex Kovalenko]

Hey sorry if this question gets asked 200 times here .. but here it goes.. 

Is it better to buy a run down (ie 1960s built) 3 bedroom, 2 bath house with minor renovations at $400k-$450k and rent it for $2k or new condo (2 bedrooms, 2 bath) $400k-$450k and rent it for similar $2k. 

The house would probably require $30k-$50k renovations and is in OK neighbourhood with not so great schools; while condo is in good neighbourhood with great school systems.. but has $500 condo fees a month.. 

gut feeling is that house would be better down the road (as it has a lot of land).. but i also feel like condo would be much easier to rent that a run down house.. i only see a few similar houses rented vs dozens of condos being rented every month

photo example of 2 bedroom $440k condo vs 3 bedroom $440k house

[Chris Baxter]

 @Alex Kovalenko   you've got to be missing something in your analysis.  You keep mentioning positive cash flow, but this entire forum is telling you that it isn't there.  For most investors, cash flow is what's left after paying all expenses AND debt servicing (mortgage). As an example (guestimates on a 400K property in Hamilton based on past investing in Kitchener):

Income (rent): $2,000

Expenses (per month): $740

• Property tax: $200
• Insurance: $150
• Property management: $100 (5% of gross rent, this would be very good)
• Water tax: $40
• Maintenance: $100
• Capital improvements $100
• Landscaping / snow removal: $50

NOI (Income - Expenses): $1260

Debt service (Mortgage), assuming 80% LTV, 3%: $~1,500

Cash flow = $-240/month (and that's being generous; I haven't allowed for vacancy). For a condo, drop the landscaping and capital improvements but add your condo fees; likely gets worse