Is buying a Buying a condo a good idea?

Question

Hello,

My parents are renting a one bedroom apartment and they pay $1500 a month. Is it a good idea to buy one and rent it out to them? $165,000 with condo fee 479. Am not expecting profit here. Your advice and suggestions are highly appreciated. Thanks.

Bevla Reeves · Answer

@Arsiema Berhane  Condominiums don't usually appreciate as much as SFR and the HOA dues almost always continue to increase while property values can decrease.

Check the stats to make sure it's a good investment!

Good luck!

Stone Jin · Answer

Are you going to rent it to them at $1500? If so then you will cashflow a little bit depending on how much you put down. Let's say you rent it to them at your cost. You still get the depreciation and appreciation and amortization aspects of real estate. Seems like a no brainer to me.

You would have to run the numbers on opportunity cost though. Can you invest the capital and then subsidize their rent with the profit etc etc etc.

You would have to run the numbers on opportunity cost though.  Can you invest the capital and then subsidize their rent with the profit etc etc etc.

Eric Carr · Answer

I would do it, even if the rental amount you set just covers the PITI. You have to pay to live somewhere, might as well pay yourself and get the tax benefits.

HOA is tax deductible when used as an investment property. Just read the HOA Bylaws and make sure you can rent it out - even to your own parents

Anne Harris · Answer

That's great news - 22304 has been seeing some great increases. Rental rates have been increasing 2.7% each year as well.

Stone Jin · Answer

@Arsiema Berhane sounds like everyone will win!

Bevla Reeves · Answer

@Arsiema Berhane  Sounds like you could possibly be getting in at the right time then!! ;)

Account Closed · Answer

1350 rent -480 fee u make 870 each month

As an alternative i just bought 2 turnkeys in ohio for 160,000 total rent is 1,600 total -160 mgt fee i making 1,440 each month

OBVIOUSLY this is a very simple analysis and there are many factors but that is quite a big monthly difference.

Don Alder-LaRue · Answer

I think that what you're thinking of doing for your parents is wonderful.  If you collect enough from them to cover expenses it's beautiful.  If you can only get PITI, that's still beautiful.  They're your parents after all.   Very sweet of you.

Anne Harris · Answer

@Arsiema Berhane - where is the property located? If its in Arlington or Alexandria VA you will likely see a nice return in the future as " Arlington Home Prices Will Spike 17.2 Percent by the End of 2019." Here is an article with a bit more info,

https://www.washingtonian.com/2019/06/12/new-report-arlington-home-prices-will-spike-17-2-percent-by-the-end-of-2019/?fbclid=IwAR0jx9fAOyvGih83jI3dCYNeFFBdl0q3ZHLU3Ylk0Ln-nvUgJYveZvI14e0

Is buying a Buying a condo a good idea?

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