Posted about 2 months ago

condo investment, is it something i should consider?

I had a buyer tell me that they didn't want to buy a multifamily for an investment, but rather buy a condo.

With a condo you pay fees to take care of everything outside, have a lower insurance cost and lower taxes.

All you have to do is make sure that your unit is ready to go and collect your little slice of rent.

eg $150k condo
Here is your math.

down payment 25% $37,500

closing costs $2500 +/1

so out of pocket cost $40k

Mtg $116,250 3% on 30 year fixed $490/month

condo fees $314

taxes 1911/year
$970/month total expense or $11,640 year

if you can rent this at $1400/month $16,800 year

you have NOI of$5160

CAP = NOI/purchase price = 3.4%

if rent is $1500/month or $18,000/year

NOI is $6360

CAP = 4.2%

From a risk reward situation this isn't a bad deal since you have no real management cost and you have the upside of leveraged appreciation.