Experience with townhomes and condos
Hello fellow BP members. So for those of you in Tampa who have experience working with condos and townhomes as rentals, what are your thoughts about them? What has your experience with them been like?
Townhouses are really good rental properties. Most of the time all exterior maintenance is taken care of with the HOA. You also get all of the community benefits such as a pool, clubhouse, playground, etc. Condos are a little bit different. Subject to assessments and also the approval process for a tenant could take longer. Also the fees for the owner tend to be higher monthly.
@Reece Register Townhomes can be subject to the same special assessments that condos are. There are definitely cases where there is no hoa such as a small 2-4 unit building, however any complex much larger than that they will both be structured the same from a legal and association standpoint. Also most condos have the same amenities as a townhome community would have, and in many cases more as condo communities are generally larger and have more residents than townhome communities.
From a rental standpoint, if you are in a larger community, both are nice from a sense that you don't have the exterior maintenance or upkeep to maintain, however you take a slight decrease in cashflow on the front end in the form of hoa fees. The largest expense you will generally have is the AC being replaced every 12-15 years. In a single family you will have to stash away cash for capex repairs like the roof, AC, exterior paint, landscaping, etc.
If your seeking cashflow, the condo HOA will kill you. It doesn't work. If I where to buy a condo in Tampa I would look at YBOR Quarter. Maybe a something in the Brandon area.
So do all townhouses and condos have HOA fees that need to be paid?
There is almost always an HOA in a townhome community. With a mortgage and HOA dues, your cash flow is at risk.
I personally own a townhome in a rental friendly community and am a licensed realtor. You can always reach out to me if you are still interested in investing.
It all comes down to an individual investors wants. Some like them due to the maintenance and exteriors usually being community responsibility thus the HOA/CDD/Condo fees may apply. The returns just need to make sense but they can be just as beneficial as homes.
@Luis Zuniga I have two rental condos in FL (but not in Tampa yet). In my opinion, I like townhomes/condos since I don't have to take care of the exterior part as @Reece Register mentioned above.
However, you need to make sure that the townhomes/condos own the land (ask the broker if the property has land-lease or not. If it has land-lease, it means the building doesn't own the land. Stay away for it).
And, per my research in Tampa, some condos/townhomes have more than one fees (HOA fees, condo fees, association fees). To be saved, just ask the broker or the HOA what kind of fees they have on the unit. Some condos, I can use the condo's maintenance workers to take care of small things (as handyman). Some condos don't allow it.
I am not sure I would want to do SFH/MFH just yet since my partner and I don't live in FL and we self managed the properties ourselves. I think for house, we would need to hire a property management to take care of the lawn, etc.
Good luck!!
Thanks for everyone who responded to Luis. I have similar questions. I am considering my first RI to be a condo because of the lower cost of entry and perceived less risk due to some of the benefits the HOA offers (i.e. exterior maintenance, security, tenant screening, etc...). I know that the converse is that the HOA fees will eat up most of my cash flow and I likely won't see the appreciation I might see with a SFH (or the ease in reselling). However, another benefit I think a condo in the right area offers is the ability to get and keep good renters. Seems well kept grounds with a pool and picnic areas will help attract renters.
Anyone have more cons to add? Or am off on a few of my pros regarding a condo as a rental property?
We have sold many BRAND NEW Townhome properties to our Investors. These Tenants stay on average 2 years or more! These properties are move in ready, in great areas with high rents! Builder warranty first year! Low maintenance. We guarantee the rent for first year (if we don't find you a Tenant we pay the rent) and provide first rate Property Management! We service all of Central Florida! Message me if you would like more information!
We Manage HOA/Condos as well as Multifamily so i will throw in my two sense. While the shared cost of expenses help alot when the properties have good cashflow (ie shared cable expense, water expense, insurance, and so on) you have to remember that as the association expenses rise so does your share. So be ready for increases in assessments to cover association expenses that you might not even agree to. Also remember that the rules in an association can change. So you may buy into a community that allows air bnb and then later down the road the association decides that it doesnt want to do that anymore. now your screwed. and dont think that you can still do what you want. The association is able to charge you for breaking the rules. If it gets to the point that you still arent listening they can take you to court. this goes the same with the hoa fees that you pay every month or quarter. if you dont pay they can foreclose on your property. Also if the community is not being run properly due to funds miss-management then no matter if you put marble flooring everywhere in the unit if the association is run down there is only so much that you can do. Just some things to think about.
Agree that can happen, but throughout the years all the communities that we manage properties in only 1 has changed rules for renting which effected our Investors. Hope my statement won't jinx that! We negoiate our Investors Townhome purchase directly with the new home builder. Recent sale was a $85 HOA monthly fee and $1800 rent.
The more amenities you have the higher the HOA fees, however more amenities draw more Tenants and higher rents as well.