{"id":186556,"date":"2026-01-20T10:52:09","date_gmt":"2026-01-20T17:52:09","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=186556"},"modified":"2026-01-20T10:52:13","modified_gmt":"2026-01-20T17:52:13","slug":"condo-investing-opportunities-2026-cash-flow-analysis","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/condo-investing-opportunities-2026-cash-flow-analysis","title":{"rendered":"Condo Prices See The Biggest Decline Since 2012\u2014Here’s Why They’re Now a Great Cash Flow Opportunity in Today’s Market"},"content":{"rendered":"\n

Condos could be the sleeper real estate investment you never thought you needed. <\/span>If you\u2019re looking to buy a severely discounted asset to capitalize on <\/span>cash flow<\/span><\/a>, a condo might <\/span>just<\/span> be the ticket because nationwide, condos have just experienced their steepest drop in value since 2012, despite house prices continuing to rise.<\/span><\/p>\n\n\n\n

According to data from financial data and technology company Intercontinental Exchange, as cited by<\/span> The Wall Street Journal<\/span><\/a><\/em>,<\/span><\/a> condo prices plunged in September and October 2025, with the <\/span>biggest<\/span> discounts in pricey coastal metros and investor-heavy second-home markets such as Florida. <\/span><\/p>\n\n\n\n

In Manhattan, a condo-saturated borough, one-third of the condos that changed hands between July 2024 and July 2025 sold at a loss, according to brokerage Brown Harris Stevens.<\/span><\/p>\n\n\n\n

\u201cThe most promising opportunities for condo buying right now are in inner cities and areas with central locations that experienced drastic price adjustments, owing to the trend of remote work. Fairly located properties are available at significant discounts to buyers who do not mind the momentary mood,\u201d real estate expert Andrew Reichek, founder of Bode Builders, told<\/span> MarketWatch<\/span><\/a>.<\/span><\/p>\n\n\n\n

A Perfect Storm of Soaring Costs<\/span><\/h2>\n\n\n\n

So what\u2019s the catch? Condos have <\/span>been caught<\/span> in a perfect storm of soaring HOA fees and insurance costs stemming from the collapse of Champlain Towers South, a 13-story, 136-unit complex in<\/span> Surfside, Florida<\/span><\/a>, in June 2021. Additionally, hybrid and remote work has cooled condo demand in urban areas, as workers can move to single-family homes in more affordable <\/span>areas<\/span>, dubbed \u201cZoomtowns\u201d by<\/span> Business Insider<\/span><\/a><\/em>.<\/span><\/p>\n\n\n\n

Jennifer Roberts, real estate broker at Coldwell Banker Warburg, told MarketWatch:<\/span><\/p>\n\n\n\n

\u201cHigher HOA and common charge fees and insurance costs are making [some] condos less affordable. <\/span>Plus, older condo buildings are facing huge assessments and <\/span>become<\/span> a<\/span> money <\/span>pit<\/span>.<\/span> If one has a longer time horizon, it\u2019s a good time to buy where the market is soft to take advantage of negotiating opportunities and being well-positioned for when the market recovers.\u201d <\/span><\/em><\/p>\n\n\n\n

The Condo Malaise Is Nationwide<\/span><\/h2>\n\n\n\n

Condos are also getting hit from the financing side. The Surfside collapse prompted Fannie Mae and Freddie Mac to increase structural scrutiny of condos, requiring reserve funding for deferred maintenance before approving loans, leading many condo building sponsors and developers to pursue all-cash deals, according to MarketWatch. <\/span><\/p>\n\n\n\n

And the condo malaise isn\u2019t just limited to Florida and New York. Texas cities Austin and San Antonio are experiencing a supply glut, forcing prices down, according to the <\/span>Journal<\/span><\/em>. Meanwhile, West Coast cities San Francisco and Portland are still reeling from the pandemic’s damage to their downtowns.<\/span><\/p>\n\n\n\n

A Golden Opportunity<\/span><\/h2>\n\n\n\n

This delicate situation may encourage deep-pocketed investors, such as <\/span>Wall Street heavyweights facing a ban by President Trump from buying single-family houses<\/span><\/a>, to purchase condos for cash instead<\/span>, though<\/span> it\u2019s too early to speculate. What is not debatable is that deeply discounted condos present a golden opportunity for potential landlord investors, provided they can navigate the additional costs of ownership and offset them with low mortgage payments and high rents.<\/span><\/p>\n\n\n\n

Former Owner-Occupants Turned Landlords<\/span><\/h2>\n\n\n\n

The first wave of new condo landlords is likely to be former owner-occupants who have rented their residences rather than taking a financial hit by selling at a loss. <\/span>This<\/span> is especially worthwhile for owners who have low interest rates, and it\u2019s a strategy that could <\/span>be employed<\/span> by all cash buyers who can swoop in and buy low. <\/span><\/p>\n\n\n\n

For investors seeking financing, it is still possible to get a great condo deal by adhering to strict underwriting guidelines that focus on HOA and insurance costs.<\/span><\/p>\n\n\n\n

A Seven-Step Condo Cash Flow Strategy for Small Landlords<\/span><\/h2>\n\n\n\n

Step 1: Analyze a prospective condo based on the rent it can generate <\/span><\/h3>\n\n\n\n

Calculate rents after HOA costs, rather than price per square foot. You can use the standard 1% rule to determine cash flow (i.e., if a property costs $300,000, it should generate $3,000 in rent), and adjust it for HOA costs.<\/span><\/p>\n\n\n\n

Example:<\/span><\/p>\n\n\n\n