Is buying a condo a bad investment rather than a house?

Question

Would appreciate some feedback

Derek Tellier · Answer

@Fernando Ulloa

That's not a simple yes or no answer. Condo's can be great investments if they're bought right and in the right area.
I see Condo's with $200/month HOA fees sell for less than $80K and rent for $850/month around here. They cash flow just as well as some small Single Families.
Bottom line is you have to do your due diligence on any property you are looking at as an investment. As long as the numbers make sense it doesn't matter if it's a Condo or an SFR. Or a commercial property or anything else for that matter.
If the numbers make sense then it's a good investment.

Account Closed · Answer

I had looked into this quite a bit myself. From what I had researched, perhaps one of the biggest cons about condo ownership (like others have mentioned) are HOA fees, but you also have to worry about HOA bylaws, which can change at any time; you can buy a condo now and before you know it, in a few years, they can amend the bylaws to restrict renters or put in place some sort of restrictions that can hinder your renting options. Also have to worry about capital calls/contributions that can be called up at almost any time, from what I've read. Pros, of course, being that they're typically cheaper than a SFH.

Ned Carey · Answer

@Fernando Ulloa you cannot generalize which is better. In some areas condos are more popular than others.

Personally I don't like condos as to much control is out of your hands. Many condo associations do not like rentals.

Tanner Marsey · Answer

Love having my condo as a rental. It takes a lot of the worry out of stuff. Out door maintenance, roof stuff, out door cosmetics.... decent cash flow. Always run the risk of hoa increasing so.... keep that in mind.

Chris Sellers · Answer

Fernando,

Condos can work out too.  It depends on a lot of factors and is very location dependent.  You just have to carefully run the numbers each time for a condo or a house before pulling the trigger.

Be sure to verify the condo HOA/POA fees and any upcoming special assessment fees before you run your numbers.  This can vary wildly, you can't really predict it based on similar properties nearby.  Some condo fees can equal the mortgage with no real amenities to show for it.

Good Luck!

Chris

Is buying a condo a bad investment rather than a house?

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