Where is the value in buying a condo?!

Question

new to real estat . Started getting my feet wet and browsing some condos in my area.

I always thought the sooner you buy then sooner you own the better.

But when looking at condos and these outrageous HOA fees - I just don't see the value anymore.

Isn't the point to eventually live rent free? I mean $800+/monthly in HOA is crazy .

So why do it. Nevermind for means of profit or residuals, but for ones self.

Am I missing something lol?

Ronnie Sparrow · Answer

For me its all about cash flow. Condo fees can really eat away at your cash flow. Look at your numbers before you buy a condo and figure out how much cash flow will end up in your pocket each month. I just wholesaled a condo which I got under conrtract for 10K and wholesaled it for 15K. It was a 2 bedroom 2 bath, rents for $850.00 HOA fees are $321.00/mos. He paid cash for it so he has no mortgage. THe HOA fees cover the water bill, insurance for the exterior building which includes the roof and security. So do the math and if the numbers work in your favor then you decide what yo want to do. Every deal is unique. During my education I was taught to stay away from condos but in reality just run the numbers and then make your decision.

Account Closed · Answer

Seriously guys.  We all live under an association whether that be in the form of a HOA or a government entity.  A bad neighbor can have a harmful impact on your SFR investment that you have little control over.  GONE are the days when the neighborhood "men" or the cost of ownership controlled the livability of the hood.  Think about Justin Beiber as your neighbor.  At least a well managed condo association provides certain protections going in and will generally work to protect property values.  Condos are good in high priced areas because generally they occupy areas that cannot be duplicated by new developments. This will guarantee and protect your values.  As in any investment look long term and buy wise.

Bill Fennelly · Answer

I have yet to see condo fees go down...they are always going up !

Ndy Onyido · Answer

@ Ronnie

Thanks for the insight. Even as a resident, I never considered condos because of the high condo fees and communal lifestyle you are forced into. The fees are particularly expensive here in Canada and I will not touch it as an investor since its difficult to extract good cashflow from a condo, even the very affluent types in high income areas.

Account Closed · Answer

Compare that $800 monthly to what it costs over time to maintain a SFR.  Unless the $800 is used to support amenities that you or your renter doesn't value then it will probably be a lot less than the maintenance on a SFR.

Derrick O. · Answer

I am looking to invest in beach front condos I agree with Ronnie it's all about the numbers. If u owe a Morgage can be a big factor wether or not it is a goo deal or a deal that will have negative cash flow

Mike Verrona · Answer

where did some of you guys start your investment journey?

Ned Carey · Answer

A bad condo association can harm your investment. You have no direct control over how they manage. They can limit the number of rentals. If they are not financially sound they can be hard to get financing. Not just a problem when you buy but a real problem when you go to sell.

Condos that can't get financing can be a downhill spiral of pricing and vacancy that destroys the association and the development.

Mike Verrona · Answer

wow so many things I didn't know.

HOA can restrict you from renting your property. I may have to take 2 steps back on this one for a first purchas .

Where is the value in buying a condo?!

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