General Real Estate Investing

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Brian Ellis
  • Rental Property Investor
  • South shore, MA
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Thoughts on condo investments?

Brian Ellis
  • Rental Property Investor
  • South shore, MA
Posted May 12 2022, 07:46

I just closed on a condo.

163k purchase price 

5k in renovations (diyer) 

Rent $1700 

COC return = 14%

The only downside here is there won’t be much appreciation. It’s a small purchase price for my area. So I figured it’s a good hedge against inflation and at least my savings is bringing me a return. I also removed my ability to invest in larger deals shall one come along. 

What is everyone’s experience with condos as an investment? 

Boston, Massachusetts

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Ryan Sajdera
  • Realtor
  • Manhattan, KS
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Ryan Sajdera
  • Realtor
  • Manhattan, KS
Replied May 12 2022, 10:14

Congrats on your purchase! Maybe you won't see massive appreciation like a SFR, but you are still on track to make a fantastic return! Just make sure condo and HOA fees don't creep into your cash flow! Poorly managed associations almost ALWAYS seem to get raised year after year. As long as you can rent it while you own it, and sell it when you're done, then I think you're in good shape!

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Lane Aakhus
  • Investor
  • Honolulu, HI
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Lane Aakhus
  • Investor
  • Honolulu, HI
Replied May 12 2022, 10:31

Congrats! If you are cash flowing it's a great purchase to get you REI career started and stay ahead of inflation. If you can self-manage, it will give you some experience for future properties. You may also look into whether or not short-term rentals are allowed to increase you ROI. Best of luck!

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Holly Frongillo
  • Real Estate Agent
  • Whitinsville, MA
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Holly Frongillo
  • Real Estate Agent
  • Whitinsville, MA
Replied May 14 2022, 11:45

Congratulations on your purchase! IMO there is nothing wrong with a condo as a first investment property versus a single family or multi family. 14% COC RPI is also a very healthy percentage. Yes, there is only one unit to cash flow from, but it's less money down and costs you less up front. You can still count on around 3% (conservatively.. with the way the market is currently 5%+ is probably a safe bet if this continues) rent increase per year. After a year or two and whatever minor reno it seems like you're doing, you'll be able to cash out refi (and potentially combine that with a heloc) to buy another property.

The first step is the biggest step and you've made it! So again, congratulations!

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Brian Ellis
  • Rental Property Investor
  • South shore, MA
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Brian Ellis
  • Rental Property Investor
  • South shore, MA
Replied May 16 2022, 03:20
Quote from @Lane Aakhus:

Congrats! If you are cash flowing it's a great purchase to get you REI career started and stay ahead of inflation. If you can self-manage, it will give you some experience for future properties. You may also look into whether or not short-term rentals are allowed to increase you ROI. Best of luck!


 Appreciate the kind words. This is my fifth investment, I’ve just never dived into condos before!

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Jameel Charles-Balan
  • Real Estate Agent
  • Boston, MA
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Jameel Charles-Balan
  • Real Estate Agent
  • Boston, MA
Replied May 18 2022, 08:06

Congrats! 14% COC doesn't sound bad to me