Condominium Investments For Beginner Investors: Why and Why Nots

[Denzel Washington]

As a recent graduate, I'm hoping to gain more perspective on situational and financial limitations that stop people from making certain investments. 

At the moment, I'm trying to figure out why most young people or people in general who work in the metropolitan areas in their respective cities seem to be uninterested in starting their real estate journey with condo investments.

For instance, if rent for a 1 BD 1 BTH apartment is typically around 1.25k - 1.6k a month for a certain area near a metropolitan area and condos in the same area (or better) are for sale around 250-350k with an estimated monthly mortgage of 1k to 1.6k. Would it not be an obviously good move to start your real estate investment journey buy purchasing a condo so that 1k to 1.6k you would've spent on rent can go into building equity in your first property? I'm also aware of fees that may come with condo's that cover up keep and etc. Even if you happened to move in 2-4 years, you can now hold that property as investment property, hire a property management company and now you have your first property. 

I know that down payments can hinder some, but what if the person had a decent amount of money saved. And even so, couldn't the person apply for an FHA loan (assuming they are a first time home buyer) that could help decrease the required down payment to make it less financially stressful for the initial investment into the property?

I personally am moving to a new city that has great growth ahead of it. I'm currently interested in starting my journey in real estate doing something similar as mentioned above and would love to chat with someone about the details, what I should consider, and how best to analyze if this type of investment makes sense. 

[Thomas S.]

If you wish to purchase a condo to live in that is fine keeping in mind it is purely a life style choice.

As a investment income property it is a very poor choice. HOAs are a major pain if you wish to rent it out, neighbours dislike renters, renters never respect condo rules and with rising fees and special assessments you can rarely produce any true positive cash flow.

Condos as a investment are simply too risky. When the markets turn in the future you will be upside down for a very long time.