Looking at a condo in the downtown area, tried seller financing to no avail, due to relocating logistics. Studio condo, 500 sf, HOA of $356(all bills paid), amenities include on-site fitness, sauna, covered parking, laundry on same floor, pool, basketball/tennis court, and fully furnished. The seller is asking $42k and we would only be able to do conventional financing. Probably $5k down, could do more, but unsure we want to use up more capital. Thoughts? Suggestions? This would be our first venture in the REI world. Any advice would be appreciated. Thanks.
Glad to hear you are taking the plunge! That sounds like a really high HOA for a studio condo, and my guess is that it would represent a huge proportion of the rent you would be able to take in and it will not be worth it. Run the numbers; be sure to account for vacancy, maintenance, and all other expenses. If it cash flows over and above the PITI payment, it may be worth it. My guess is that it might not be the best place to start though. T
here are good calculators on this website to help with your calculations; if you want a copy of my spreadsheet that I use, feel free to PM me.
Condos can be tricky with their assessments and all. When you say "all bills paid" by the HOA, what exactly does that include? Taxes? Insurance? Utilities? You still need to factor in vacancy and internal maintenance...and the dreaded assessment. One big key you left out that will prevent anyone from giving you accurate input is, what will the unit rent for each month? Or will you be looking to live in the unit?
Hi @Bruce From an condos are typically easy to buy and difficult to sell (depending on location) as compared to SFR. They also appreciate slowly and the HOA's can go up..killing your cash flow. PS I am not familiar with your local market trends simply stating based on my experience. Make sure to read the HOA bylaws and verify if there are any rental restrictions on the property. Often times there are rent restrictions on the condos i.e. only so many condos can be rented so make sure your's can be rented. Sometimes HOA can change this as well so you may end up footing the bill. Make sure to run your numbers and account for things above. PS not trying to discourage you by any means..simply providing additional insight based on your request.
All bills paid- cable, wifi, water, trash, electric and gas. His previous renter was paying $800 and it looks to be in line with comps. We are planning on renting the property. Thanks for mentioning assessments, hadn't thought about that.
Did the condo deal work out?
Hope all is well!
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