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

[Logan Rex]

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!

[Grace Gudenkauf]

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

[Logan Rex]

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]

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]

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? 

[Robert Adams]

@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.