Are condos a good investment?

Question

I reside in Las Vegas, NV. The housing market is crazy right now! Housing prices are through the roof and over valued. I planned on buying my first investment property but am a little weary. My realtor said maybe I should consider buying a condo instead of a single family home first. What are your guys thoughts? I have heard good and bad things. Just wanted to get some other opinions! Thank you in advance :)

Cody Neumann · Answer

@Alexis York

It depends on the condo. Some HOAs are well managed and some are not. It might help to see if you could get the HOAs reserve fund and see their yearly budget. Also make sure you look into their rules and regulations.

Alexis York · Answer

@Jonathan Greene hmmm thank you appreciate it !

Michael Dumler · Answer

@Alexis York keep in mind HOA rental restriction. Most associations have them and will require you to first live in the property for a number of years before you can apply for a rental permit. As others mentioned, watch out for monthly association fees. I've come to find that most associations do not budget properly and often overpay for an expense, therfore, jacking up monthly dues over time.

Stephen DeThample · Answer

@Alexis York single family houses will always be in demand, in a not so hot market, condos can become less desirable.  Watch the monthly fees, run the BiggerPockets calculator to check.

Best of luck 🍀

Mary L. · Answer

the biggest issue of a condo is, Water leaking, water damage, mold remediation, between upstairs condo and downstairs condo.  Super headache...

Next would be HOA, rules, regulations, violation, penalty fines.  Then tenants complaints noise between upstairs and downstairs due to the very thin walls between the condo.

Alexis York · Answer

@Michael Robbins thank you ! :)

Michael Robbins · Answer

@Alexis York if you decide to purchase a condo I would pay attention to the HOA and what it includes (roof, exterior painting..) and any potential for future special assessments.  For example, the HOA might be $200 per month, you buy the condo, and then two months later you find out there will be an additional special assessment of $150 per month for the next year due to roof replacements.  When you get a copy of the HOA resale package explore the reserve study.  For example, how funded is the HOA (20, 50, 90%...)?  And how long before the gates need replaced...etc.

It would also be worth analyzing which floor plan obtains the highest rental rate.  There are floor plans that are more popular than others.  Does second floor or first floor fetch a higher rate?

Marian Smith · Answer

@Alexis York condos are the last to gain and the first to lose appreciation.￼  and as a landlord you are competing with apartment complexes with corporate owners with deep pockets.  You make your money when you buy.  You may have to work a little to make money, not just "shop" on zillow, in this market.  Either buy a fixer cheap or somehow find an off market deal.  or wait.  there is no hurry if you are not going to make a profit.

Alexis York · Answer

@Cody Neumann thanks for the great advice :)

Alexis York · Answer

@Stephen DeThample

I was looking based on location, I feel that a lot of servers/bartenders out here tend to rent , especially near a lot of bars, stores restaurants etc. But that that is good advice thank you !

Are condos a good investment?

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