"Good" is a relative term that really depends on your location and personal goals. In my case and in my location (So Cal) condos worked really, really well. Here is the good and the bad:
Good:
1. 5 condos and a duplex allowed me to comfortably retire early (with no other source of income) once I had everything paid off. I appreciate that my maintenance is limited to interior repairs, which affords me more time to do things such as travel, without having to pay for a property manager.
2. The association does all of the interior common plumbing, electrical, termite repairs as well as exterior roofing, paint, site and landscape maintenance for the HOA fee I paid so I was able to better focus on my day job and make money while I was working.
3. I spread the risk to several condos instead of 1 or 2 houses so a vacancy had less impact on my bottom line.
4. Renovating when a tenant left meant only doing interior repairs / refresh; cutting time and costs.
5. In my market condos appreciated 3x in a time period when Single Family only doubled, so I think some of the other commenters are using a broad brush based only on their experience. The corollary to the up side applies in a downturn, though.
6. Condo associations do basic rule enforcement so I only need to get involved if the tenant does not heed the HOA warning, which is rare.
7. Condo tenants in my market generally to expect to live under a set of rules when they move into that type of environment but they also appreciate the condo amenities (pool, tennis, etc.), vs Single family renters who tend to want a more rule free lifestyle for better or worse. I also have a good pool of prospective tenants in a niche area.
8. I fill a niche market. My condos are in an area with a very high percentage of 1st generation Mexican, Central and South American immigrants who are hard working, appreciate the opportunities afforded them in this country, appreciate the safe environment that the condos afford, are respectful of the property and pay on time. They also appreciate having ready access in this community to grocery and access to other amenities that they are familiar with from their country of origin.
9. Condos are smaller than SFRs and so there are fewer opportunities to have surprise room sub-letters, long term guests, etc. and are a lot less money to renovate when I have turnover.
10. In California and, I presume, many of the other states that have or are considering some form of rent control, condos and singe family homes are either not rent regulated or less rent regulated than multi-family.
Bad:
1. As others have said, the condo HOA fee eats into profit
2. Sometimes you need to do battle with the HOA to get them to pay for things that are their responsibility.
3. Success of condos as a rental are highly location/market dependent. If you invest in an area with high maintenance, low quality tenants then a condo would be a nightmare.
4. It is important that the HOA finances are in order and that there is not a high level of deferred maintenance that could result in unexpected special assessments or significant HOA dues increases.
In my case, I only bought cash flowing properties that also had some good appreciation potential and were in a niche market that I knew well. It took patience to find the right properties, but as the saying goes money is made when you buy a property. Yes, time will solve a lot of mistakes in real estate, but it is better to make money out of the gate then to buy wrong, have your money tied up, and wait 5 or 10 years for inflation to solve the problem.
