All Forum Posts by: Rob Cee

Thanks Rich for your excellent comments. But one thing to point out... you do have hoa dues on condos and you may or may not have a special assessment every 5-10 yrs. But condos you will never have to pay out of your pocket to:
-replace the roof
-paint the exterior
-keep up the landscaping

....units you will have to pay for all this.

Also, water/garbage bill is included in the hoa with condos where you have to pay that with units. And the hoa polices the area (doesn't allow large dogs, or people to park a ton of cars & keep junk around like they will on units).

I do myself personally live in a condo right now.

But I hear you on units, I do like them better all things being equal. But in my area they are in so much worse areas of town than condos for similar price per door. I would personally live where I invest in condos, I would not personally live where I would buy units. So guess there is just a safety factor for me because I know what the tenant will be like since I have rented in these areas myself.

Some of the worst nightmare stories I've heard form long term investors I know (that favor SFR's now) are from 4-plex's they owned in bad parts of San Bernardino CA on blocks with mostly apartments. They all said it was a nightmare management situation with endless turnover, drug activity, etc... And they sucked up so much of their time and energy that they vowed to never buy anything but single families homes again.

Thanks T Ferrante...DC is more of a good comparison to San Diego in terms of market dynamics. You make a good point about rehab too. The condos generally do not need much rehab.

Condo renter may not be better people, but they have better credit scores and there will likely not be gang activity in a good part of town where the condo is. You can also rent them in a second because they are in such desirable, safe parts of town & likely turnover less. Lots of money lost in turnover with rentals. Less of a "headache" in terms of management IMO.

But I do hear you about units not having the hoa...that is certainly a plus.

Also I see you are Utah. I think the condo dynamics are different in places like Utah vs. say Coastal CA, Seattle, Boston, etc... In expensive areas, condos become the defacto first time home buyer home of choice because SFR's are so out of reach price wise. I would never buy condos in a place like Utah or in the Midwest because SFR's are so comparably affordable, first time home buyers in those areas still will always buy SFR's. SFR's are not comparably affordable in Coastal CA or say Boston.

Thanks. Those are good points about condos. Although I have never seen a condo project where they restrict renting and I have looked at hundreds of CC&R's. That is more of a myth than reality IMO, 99% of CC&R's don't restrict renting of units & you'll know that by reading them before you buy.

Hoa due rises are a risk. But you can also run your numbers going into it and see if it would still be good cash flow if hoa dues went up $100-$200/mo. Most will not rise more than that much over a 10 year period. I have also known lots of condo projects to not have had a special assessment in over 20 yrs.

Condos prices are also more depressed in price right now than SFR's or units b/c of the financing issues associated with them. As the housing market stabilizes the lenders will get more aggressive with condo financing IMO.

I'm curious what other buy and hold investors think about condo rentals in good areas vs. 2-4 units in worse areas of San Diego CA. What would you rather have? Cash flow would probably be slightly better on the units in the worse areas. But tenants likely better in the condos in the better areas.