Winnipeg, MB · Member since 2019 · 18 posts · 0 votes
Hi, just looking into getting intoreal estate and hoping to get myself a rental. Im wondering whats better a single family small house or a condo. Thanks, Andrew
Investor · Atlanta, GA · Member since 2015 · 366 posts · 283 votes
7y
@Andrew Toews I vote for SFR. I've owned both and have found renting out condos a major pain, largely because of HOAs in my case. They make everything a hassle. It's a catch22 because a good, strict HOA is needed to keep a place nice, sell-able, and running well BUT they also tend to be nosy and anti-landlord. You also have no control over HOA fees, assessments, and rule changes.
With a SFR you control your destiny a lot more, just make sure the numbers work, the area is safe and desirable to renters and you're good to go
New to Real Estate · Coldwater, OH · Member since 2018 · 105 posts · 61 votes
7y
start looking for answers man. I am new too. I think perhaps a more important question is what type of investment are you looking for? that has been more of my thinking. I think it may start by assessing your current situation and finances. Before even thinking house or condo, I think you need to be thinking, what are you trying to gain from either or? Cash flow, appreciation, or both? Financing, I'm new to this but this has to play a huge part. How much do you have down? what kind of loan can you get? without financing either or will be hard to obtain. If that's in check though, you, and I, have to start thinking a bit about what we want the property to achieve for us. Are we thinking 5 years, 10, etc? And then, there is always the big picture of markets. Those properties will likely perform differently in different markets. Is targeting a market area more important than property type? those are some of the questions, my friend. GL
Winnipeg, MB · Member since 2019 · 18 posts · 0 votes
7y
@Jeffrey Grieshop ya good thinking. I guess I'm not sure what I want. I have money to make one purchase thinking appreciation. If I go cash flow I could maybe buy 2 cheaper condos. What do you think is best ? I have a job so I dont need cash flow but i guess i just want do what's smartest and fairly risk free.
New to Real Estate · Coldwater, OH · Member since 2018 · 105 posts · 61 votes
7y
I can't say I feel informed enough to say. The thought of renting a bunch of single family homes out is what got me started in this space. Prolonged periods of holding them, basically until it does not work out. Rental income + debt paydown + appreciation
I have really only been reading and listening thus far in my journey. The plan is soon to graduate into the calculators and likely upgrade my account. I think once you get to that step you just start hammering out deals. Find leads, find properties, run the numbers. At that point, it does not really matter if it's a condo or home. Run good numbers(i will be going uber-conservative on my first deals numbers(i think)) and find a deal. Pick one of them lol and then take the steps necessary to get one.
Winnipeg, MB · Member since 2019 · 18 posts · 0 votes
7y
@Jeffrey Grieshop Ya sounds good! I hear all the time a good deal is a must but I'm not sure how to get one. Are you going to knock on doors or just scan the market? I'm fairly jacked on starting with a condo but 8m guessing a house would go up in value faster and have higher possibilities but ya who knows I'm still trying to learn things! Good luck to you.
New to Real Estate · Coldwater, OH · Member since 2018 · 105 posts · 61 votes
7y
I think the best way is to start building relationships. I know I have heard that homes sell often through word of mouth, or that is how they sell most often, it was some metric like that. Growing a network that can generate leads may be the most important thing for success in this industry.
Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes
7y
@Andrew Toews single family house, for sure. There is a lot more involved in condos than people realize. Not only do you have to investigate the condo, you'll need to investigate the condo association as well, and determine their viability.
Are they financially sound?
Are there any "special assessments" in the near future?
How many units are owner occupied?
And others....
With a SFR, it's just "does the property make sense"
Greensboro, NC · Member since 2017 · 13 posts · 6 votes
7y
Hi Andrew,
It depends on your investment goals and time horizon. Both niches serve their own purpose.
If you are looking at affordability and need to sell your property quickly, condo may be the prefer method. Here is the catch though. It all depends on your HOA management. Just like in the SFR arena, if you personally manage or hire third-party property management company, the value and desirability of your property is maintained by them. If you are looking for condos, look to invest in area where SFH is very expensive relatively compared to condos. Also, you don't need to invest in lawnmowers and condo complex comes with a lot of amenities.
On the other hand, SFH is good since a lot of people usually associated real estate investing with this category. The biggest issue is that if you plan to invest deeply into this category is how to get rid of it as your investment career shoots off or plan to retire. It is great route to capture appreciation and do flips on if you want to accumulate capital in a short period of time. Other than that, both of them hold the same investing/landlord principles.
I hope that helps in your decision making process. Remember, everything in real estate is relative and you can make anything successful in real estate as long you remember to make sure the number makes sense.
Winnipeg, MB · Member since 2019 · 18 posts · 0 votes
7y
@Jason D.Thanks Jason. Do you currently have some rental properties? How are they working if so. Intresting to see that your from st perersburg FL. I'm near Winnipeg and was just there for vacation at post card inn.
Tampa, FL · Member since 2017 · 22 posts · 7 votes
7y
My opinion on condo's is definitely pay attention to the assoc fees. They can really eat into your profits and many times those fees don't really cover anything useful. In addition, remember that when you have a condo vacant for one or two months, that assoc fee is still due whether you like it or not as opposed to a SFH that does not have an assoc fee, you just need to maintain the lawn but utilities will be off. Just some feedback from my own experience.
Investor · Atlanta, GA · Member since 2015 · 366 posts · 283 votes
7y
@Andrew Toews I vote for SFR. I've owned both and have found renting out condos a major pain, largely because of HOAs in my case. They make everything a hassle. It's a catch22 because a good, strict HOA is needed to keep a place nice, sell-able, and running well BUT they also tend to be nosy and anti-landlord. You also have no control over HOA fees, assessments, and rule changes.
With a SFR you control your destiny a lot more, just make sure the numbers work, the area is safe and desirable to renters and you're good to go
Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes
7y
@Andrew Toews right now I have 2 rentals. I moved here with my family this past summer, just finished a BRRRR and have tenants moving in today. Funny, I lived here about 15 years ago and was the head of security at the beachcomber (at the time it was a best western) and Jimmy B's, next door to the postcard inn.
Winnipeg, MB · Member since 2019 · 18 posts · 0 votes
7y
@Ericka Grant Thanks for that info. When you say make sure the numbers work what are you thinking ? Break even? 100 or 200 bucks take home after expenses?
Real Estate Agent · Baton Rouge, LA · Member since 2017 · 82 posts · 85 votes
7y
My vote between the two would be SFH (though I personally invest in small multifamily). In my market, condos do not really appreciate and can be hard to liquidate, unless you are willing to sell at a discount. The SFH market appeals to a much more diverse group of potential buyers (investors plus retail buyers), so the exit strategy is much more straightforward.
Financing on condos can be difficult, too, but you can often find investment condos with a much lower barrier to entry for a cash deal.
All of that said, if you can get a crazy good deal on a condo so that you can afford to discount it if necessary when you go to sell and the cashflow offsets the appreciation that you are likely forgoing, I don't see a problem with it. Just be sure you have a good handle on the association fees and any limitations on investment properties in the community.
Winnipeg, Manitoba. Canada · Member since 2018 · 19 posts · 3 votes
7y
@Andrew Toews I am not a fan of condos as rental properties. You have such little control over your asset vs. as single family home.
Just to name a few reasons:
What if the condo board changes the rules making it difficult to find tenants? Or the condo board decides to spend money on something you do not agree with. Too bad condo fees are going up or you are getting hit with a levy.
Condo fees are (almost) always going up. Even if you have no mortgage you could still owe a significant amount of money every month with taxes, insurance and condo fees.
I could go on and on about my dislike for condos as rentals but that is just my opinion.
@Tarik Tokar Thanks! Finally someone from Winnipeg which is where I've been looking. Do you have any type of rental units?
Long story short I have bought and sold multiple rental properties. Most of which in Alberta as I moved to Grande Prairie as soon as I graduated from University.
One of which was a condo that worked out ok in the end but was a massive headache for years. Happy to go into more details with you regarding the condo if you're still on the fence. It was kinda crazy and involves a different units bbq exploding/fire. Fun stuff haha
Currently I own a home in Fort Garry (in my home town Winnipeg) which I am renovating and likely going to BRRRR but there are some really good sale comps so I may end up selling it but that decision will be made when the reno is complete.
I've had both (and currently a townhouse as an investment property as well) and I prefer single family homes. An old friend of mine, also an RE investor, always called single family homes "the Honda Accord of rental properties"...i.e. they might not get you there the fastest, but with a little maintenance will reliably deliver in the long term.
So, I agree with the other posters that there is more uncertainty with condos. This is my experience too. That said, if the right deal came along, with proper analysis I would happily buy another condo as investment.
Side note, as I was just reading a similar post on SFH, condos, HOAs.... I think HOAs aren't all bad even though condos are not my preference. The townhouse I currently have as investment is in a set of four units with no HOA, and I thought I had "struck gold" with no HOA. Then, I realized that meant dealing with three other owners/personalities on things like when to paint the building, and there is rarely agreement on what to do and when; one of the other owners doesn't seem to care one bit about the property's overall appearance. Just another perspective on condo/townhouse HOAs that I don't think I've shared on here before.