New from Kingston, NH (advice on buying condo or house?)
Investor · Nashua, NH - New Hampshire · Member since 2014 · 10 posts · 2 votes
Hi, My husband, Jeff, and I (Christina) are so excited and anxious to invest! We both see the potential for great income and to get our own house paid off, then save for retirement (we are only 35 and 40 but I'm not counting on social security). Now we are trying to narrow down how to start, so any advice is very appreciated. At first we wanted to flip but we both work full time so I'm not sure that's the best option to start. I'm very nervous to rent but it seems to be the best way as long as we luck out with good tenants. My first question is condo or house? and if we buy a condo, is there a property tax or is that included with the condo fees? any advice to help us make this decision and/or how to get started is appreciated :)
Hey Christina, welcome to the "nearly 40 and not trusting social security" club. Ok, here is my two cents. Right now, its getting now difficult to flip. The better margin (profit) is on the higher range properties which require more money and experience. It can be done, but the margins are not as high as they used to be.
I personally, like single family houses. Condo values can really change depending on the building and that is out of your control. Also, condos have association fee and weird rules that could make renting the property difficult. Finally, condos typically have 'special assessments' that is additional fees for maintenance or repairs that they did not predict and your stuck with.
With that being said, I prefer single family because its much easier to predict the holding costs, maintenance costs and the overall value of the property.
My personal strategy is this. Buy and rent 3/2 concrete block houses in decent neighborhoods for 40 to 60k and rent for 700 to 900 per month. Build up cash pay off and buy more.. Easy and proven strategy..
Just my two cents.. Tenants are easy.. Message me if you want some advice there also.
Gavin
welcome to BP, we're practically neighbors :) Hey, don't worry about getting lucky and finding tenants, read the guide to screening tenants as a resource as well as the volumes of data online and you will do just fine. It's not tough. Most everything I learned in terms of landlording I learned from the idiots guide to being a landlord because BP didn't exist when I was getting my education. I think it's a good resource to start with.
For your questions, no the condo fee won't include the taxes but on the bright side it is a write off. In terms of which to go with I think some pros for condos is lower cost of capital as a barrier to entry, lower cost means lower risk on your first deal, most condos include heat and hot water with the fee and that results in a less complex assignment to you as the property manager (assuming you will manage your own), I think condos fell hard and fast in the crisis and are an asset that may outperform early in this recovery (my speculation).
Cons - condo fees destroy cash flow in my opinion, when I run numbers on condos those fees just kill the returns, HOAs and condo associations generally stink, there are adjustments where they can hit you up out of the blue for stuff like a new roof, that's a risk that could kill years of earnings out of nowhere. What's the best of both worlds you ask, well that's condexes. Something most people avoid and don't understand, which is fine by me, I own two and am going to look at a third this week :)
Flipping scares the heck out of me. I'm no handyman and I've dealt with enough contractors to know I'd prefer to partner with the Yellow King from True Detective than partner with the average contractor.
Good luck neighbors :)
thanks guys :) great advice! I'm not good at the lingo yet though, Gavin, what is a "3/2 concrete block house" I'm guessing you mean 3 bdrm 2 bath? but do you mean literally a concrete house? I don't think we have those around here. Or does that mean something different?
Brett, wow, we really are neighbors, Hampstead is 5 min. from our house. I don't know what a condex is. I just looked it up and it seems there is no clear answer, a double condo? do you own the whole thing and have to make your own association? we can talk more about that sometime. I have a lot to learn ;) I'm so torn on learning more first, or just jumping in while the market is still low. I would love to meet up sometime if you're willing, just to learn how to get started and/or where you find the deals mostly. Are there auctions in our area or is that too hard to compete against other investors? I'm just so overwhelmed and anxious but don't know where to start. I have to make sure our first is a good one or we will be scared to keep going...I really want this to work, in addition to the money, I know I would love it and have so much fun!
LOL, Christina, if you find any 3-bedroom houses, concrete block or not, in Kingston for $40,000, give me a ring. I will buy each and every one you can find.
Biggerpockets is great, but it is good to remember that real estate is a location-driven thing.
oh I do not plan on finding anything in Kingston, since I live here I know how expensive it is...property tax alone, ouch! That's part of what I need to learn is where and how to find deals
Hey @Christina H. Thanks for introducing yourself! It's great to have you here! Don't miss The BiggerPockets Podcast - they are great for learning how others are finding success.
You may also enjoy this post, about multifamily properties: How to Buy a Small MultiFamily Property: A Step by Step Case Study
Oh - and be sure to set up some Keyword Alerts- especially for "Kingston" so you'll be notified when people mention it here in the forums.
Thanks again for introducing yourself!
Thanks Brandon, I will read that! And yes, I've been listening to you and Josh on my way to and from work, great stuff!!! thank you
Hey Christina, a condex is a duplex but each side is a seperate property, so you can have two seperate owners. It's pretty regional type real estate entity, they don't really exist outside our area. There is an HOA, but the HOA is just you and the other owner, so you vet the other owner during your due diligence process. We should meet up at a REIA and be the new guys :) I'll be attending the REIAs soon but I've never been to one before, just can't find the time while I'm in grad school but that's wrapping up this April so I'm planning to hit the Manchester REIA in May.
I wouldn't feel rushed to get into a property. Rates will probably start to climb and the market is pretty hot right now but be patient, there will always be motivated sellers and there are always deals to be had.