My mom and I are looking to buy our first property and we're wondering, should we start out local, and how good an investment are condos?
We live in Maryland, near Washington DC and we've got about 100K for our first investment. I've heard that some markets are better than others for investing, but on the other hand we wonder if it would be better to start near where we live so we're familiar and available. We're also deciding between renting single family homes and renting out condos.
What would you guys do? Any advice?
Hi @Shafi Noss ,
That decision is going to be easily made when you find out your investment goal. Figure out what you'd like your return to be and do the math backwards to see what your buying criteria is. Once you figure that out, you can buy any type of property to make your goals work.
I myself love condos, but I know a lot of people on this site don't, and their excuse will be the HOA fee eats up your return, and an assessment can be detrimental. I see it as money well spent, for all the benefits you get from paying the HOA. In a condominium, you own from the drywall in, not the exterior, roof, windows etc. All my cap ex items are my AC and my appliances. I get to offer my tenants, a pool, gym, lawn maintenance, security guard/gate, and water/sewer and trash included in the rent. A condo is a smeller dwelling also, so that means less people using your bathrooms, kitchens etc so the property stays in better condition longer. The biggest benefit is an HOA with on-site management, reason being they can watch your tenant for you. If you're friendly with them, you'll know about your tenants actions there. For example, my HOA told me that my tenant had their boyfriend living in my unit, who wasn't on the lease, and hadn't passed my background check. I looked him up to find out he had an extensive arrest record. I was able to get a handle on that situation before anything bad happened.
How to find a good condo to rent out is another story in of itself.
Also, go local so you can self manage. Hire someone to lease it out for you, but managing a property is easy, as long as you have a handyman's phone number.
Leasing is the DC area is easy no hire it out
@Shafi Noss that is going to depend on what your goals are and where you live and what your budget is.
I invest out of state and enjoy it so far. It’s not perfect but it’s been pretty hassle free so far.
One thing I’d add is neither local or out of state would I invest in condos. The HOA could lead to too many headaches in my opinion. Just a thought
@Shafi Noss Condos in DC rent fairly easily, especially in more desirable areas in the NW and NE locations. With 100k you are looking at having 20% down for around 400k but you will also have to cover closing costs. I would highly recommend, if you do condos to stick with 2+ bedrooms as they are renting quicker than the 1 bedroom units.
Seems that most individuals are wanting more affordable rent so they are getting roommates and splitting the rents.
2 Bedroom in Eckington, NE is going for roughly $2,500/month. A 1 Bedroom is going for $1,750-$2000. Now individuals are splitting that $2,500/month= $1,250/each instead of paying the higher price for having their own place.
Now there is always a renter that will rent by themselves but just a little insight when you are searching.
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