Own Single Family Home. Do I downsize to a condo?

Question

I currently own a 3b,2.5b single family home. 1800 sq ft. I am currently in the market of buying something else, thinking about downsizing to a condo. I would then rent out my SFH. BUT, I just want to know if I downsize and buy a luxury condo, is that a good investment? Of course my relator says yes but others I've talked to said to get a townhome instead. I do plan on living in the condo for at least a year or 2 then trying to move and buy another property. Advice please!

Robert Adams · Answer

@Logan Rex if you are considering selling the SFR and going with a Highrise for house hacking purposes of eventually after the year or 2 and then keeping it as a rental. You should also consider the tower you buy in and get one that you can do STR like MGM Signature for example. That would cash flow much better than a LTR tower. The high HOA's in highrises normally kill cash flow. The higher revenue from STR would help that.

Logan Rex · Answer

I appreciate your advice so much! I have another question. My real estate agent told me not to purchase 2 bed, 2 bath single family homes as they don’t rent well. How do you feel about that?

Grace Gudenkauf · Answer

That makes sense. I would caution against a luxury rental in general as an investment property. While there are certainly cases where they can make great money, in general your best recession-proof best is likely a more "average" home. There will be a much bigger tenant pool at that price point.

Logan Rex · Answer

I want to downsize since I’m the only one living in the SFH. I’ve been looking around and the areas that I like, I can’t afford a house. Or, the houses I can afford are older, need work, and are not in the best areas. Most places have HOAs out here, but again the neighborhoods with lower HOAs arent good areas.

Grace Gudenkauf · Answer

I like sticking with non-HOA single family homes. Is there a reason you are considering only condo or townhome?