Renting out condos/townhomes?

Question

Hello,

Just currious on your thoughts about buying a condo or town home and renting it out. Im just outside of chicago and in the suburbs and condos are not that expensive and i could make ok cashfflow from one. I know about HOA fees and alot of condos/town homes only alow a certain amount of renters, but on the flip side i think my CAP EX would not be as much because im not responsible for the roof, snow removal, yard keeping. any thoughts would help, thanks.

John Warren · Answer

@Nolan Mahoney buying a condo is much better than doing nothing if you are going to be in the area for a while. It is not a get rich quick scheme or anything, but it does allow you to start getting debt pay down, depreciation, appreciation and potentially cash flow when you move out. I would keep it on the table.

Tony Angelos · Answer

@Nolan Mahoney I personally don't find anything wrong with it. My first rental was my first primary residence. It's a breeze, the cash on cash return, while low in absolute terms, is crazy high (3% down + seller credits). I only cashflow about $150/mo, but I was able to get into it for under like 6,000 all in. It's against conventional guidance or what you read on the forums, but I have no regrets. Just need to set expectations for what you're actually getting in return, a small condo is not going to be life changing wealth. But it will help you understand if you like this kind of investing and enjoy the underwriting and stuff.Feel free to DM and I'd be happy to share some more opinions and experiences

Jonathan Klemm · Answer

Hey @Nolan Mahoney - If the numbers work why not?   It's often hard to make the numbers work in Chicago so sounds like the suburbs are the right play.

What do the numbers look like?