Pros and Cons of purchasing Condos for Rentals

[Chuck Musselwhite]

I live on the coast of California and the price of real estate is extremely high. Finding deals to build a portfolio is tough. I recently owned two rentals but sold them and am now looking for other opportunities. There are some cheaper condos that are going on the market (below $200K) that would produce really good cash flow. For those of you who have rented condos what are the benefits and drawbacks of doing so? 

According to the calculator on here, I can get a 10% ROI per year on each condo I buy and rent.

[Mike McCarthy]

The big thing with condos are the HOA fees and the viability of the HOA. If all the roofs need to be replaced, you (and your neighbors) can have a special assessment done and you need to pay $xx thousand into replacing everyone’ roofs.

Unfortunately, you don’t have a lot of control over how well the HOA finances are managed and can get blindsided.