I've been looking around this site for awhile and decided to make an account. Just purchased a condo three weeks ago and had tenants in for a week now. I'll share the financials and reasons why I decided on a condo as my first purchase.
2 bedroom, 2 full bathroom
Condition: Class A property, minor repairs and paint needed in order to rent.
Purchase price: $115,000
Mortgage (P&I): $450
HOA: $180
Tax: $235
Insurance: $30
Rent: $1300
Cash Flow: Rent - P&I - HOA - Tax - Insurance - Vacancy(5%) - Maintenance(5%)
Cash Flow: 1300 - 450 - 180 - 235 - 30 - 65 - 65 = +275
Total Cash Invested: $32,500 (closing costs, minor repairs, paint)
Cash on Cash: 275x12 = 3,300 / 32,500 = 10.15%
Reasons for investing in a condo:
1. I am very familiar with the area.
2. Good school system
3. Working professionals rent in the area.
4. House with similar dimensions in area are double the purchase price and double the taxes.
5. I work full time so a higher end area allows me to have less headaches. Also not having to maintain an exterior is likely to take away some hassel as well.
6. Appreciation likely, same property sold for $150,000 in mid 2000's.
7. Researched HOA before purchasing, good reserves and managed well.
8. Wanted to jump in to real estate (paralysis of analysis for a year), as someone mentioned before "ready, fire, aim".
That being said, for my second rental I want a single family home.
