Buying a condo for a rental

6 Replies

Hello all:

I am currently looking into a second rental investment and was wondering if anyone can throw in their two cents about the pros and cons about buying a condo for a rental. Firsthand experience or not, any information is more than welcome. 

The pros for me are that it's cheaper, in a good area of a good city, in a good rental market, and is in good condition.

The cons I know can be getting financing (conventional loan for me), getting hit hard by depreciation when the housing market tanks, the lawsuits the condo complexes can get involved with due to some liabilities, and HOA fees.

Let me know your thoughts about the idea. 



Originally posted by @Benjamin Timmins:

Beware of condo associations.

That's what keeps me gun-shy about them up my way.  A special assessment can be levied at a moment's notice . . and there goes your profit margin.

Association dues do suck and you don't have as control on if they go up. However usually increases aren't that much annually and can be covered with normal rent increases. Some of the pro's are you don't have to worry about tenant not taking care of lawn or snow. Also maintenance costs are much less since most of the major items are included in association and they level them out per month.
I own 4 condo/townhouses and in my area much easier to find ones to cashflow than single family.

@Peter Mckernan I have invested in condo rentals and I look for over 51% owner occupied (opens up financing options for you and for future when you sell), prefer FHA approved HOA, always look over the financial statements and compare to other HOAs in the area. I always want to see high reserves to prevent future special assessments, or I like to buy after the major renovations have been completed and the special assessment(s) are paid off. Feel free to PM me if you have specific questions.

Great, Thanks for the quick feedback and good insight! Will do Brian! @Brian Ortins  

@Brian Ortins  Brings up a very good point. Dont purchase in half empty complexes. Or at least I wouldn't.

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