Is a condo a good first rental investment?

General Real Estate Investing
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Is a condo a good first rental investment?

Megan Kim
Virtual Assistant · Miramar, FL · Member since 2026 · 4 posts · 9 votes

Hi all, I’m 24 and I have pretty limited capital to get in the game. Ideally I’d want a duplex, and I hear almost exclusively of people talking about single or multi-family properties. I’m a bit nervous to buy out-of-state in an area where I don’t have any personal contacts (I’m located in south Florida and can’t reasonably afford most properties here), but I saw a condo in Raleigh listed for about $100k. It looks nice, I know someone in Raleigh I could ask to check it out (if I don’t end up moving there myself, lol).

Has anyone in the community experimented with condo units as a part of their portfolio? I’d be shooting for either househacking and/or long-term rental tenants.

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Henry Lazerow
Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
1d

I have had clients buy condos. Here is the three things to look at 1. NO HIGH RISES 2. NOTHING WITH AN ELEVATOR 3. NOTHING WITH A POOL OR STAFF

If you follow these three rules you will avoid the high assesment and high special assesment buildings. Many talk about reserves but many buildings in Chicago run with low reserves and it works fine and is very common here outside large high rises.

Of course also check HOA docs to make sure no rental caps. Many of our low rise buildings are very investor friendly. Its usually the high rises with all the rules.

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  • Amit PatelBusiness Member
    Property Manager · Bartlett, IL · Member since 2025 · 177 posts · 68 votes
    2d

    Condos can work as a first rental, especially at that price, but they come with a few catches that don’t show up in the listing.

    The big one is the HOA. That monthly fee comes right off your cash flow, it tends to go up over time, and if the association hasn't saved enough, owners can get hit with a special assessment for things like a new roof or parking lot. Before you get serious, ask for the HOA budget, the reserve study, and the last year of meeting minutes. The minutes are where you find out about the leaky roof everyone's been arguing about.

    Also check the rental rules. Some associations cap how many units can be rented or require a waiting period, and that can kill the plan completely. Financing can be trickier too, since some lenders won’t touch buildings with too many renters or pending lawsuits.

    Honestly, if there’s a real chance you’d move to Raleigh, buying it as your home first and renting it out later is a great way to start. Lower down payment, better loan, and you learn the building before a tenant ever moves in.

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  • Aristotle Kumpis
    Specialist · Long Beach, CA · Member since 2011 · 889 posts · 401 votes
    1d

    I would recommend you stay away from townhomes and condo's for long term buy and hold. HOA's are the biggest issues. And some communities don't allow rentals, so you have to be careful. Also, they don't usually appreciate like an SFR does. A lot of people buy a condo for their first rental because of the price. But unless you are flipping, I'd argue that they are not good long term properties to own for rentals.

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  • Stephen Foster
    Member since 2026 · 28 posts · 5 votes
    1d

    Megan, condos can work, but financing is the hidden catch. Lenders review the whole building, so check the HOA's rental cap, its reserves, and whether any big investor owns a lot of the units. Any of those can make a condo 'non-warrantable,' which narrows your loan options. Ask for the HOA budget and the condo questionnaire early. Also, a DSCR loan on a condo has to cover the HOA dues in the payment, so run the numbers with those in. I'm a mortgage broker, happy to answer questions here. – Stephen

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  • Richard F.
    Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes
    1d

    Having managed a number of COA/HOA's for over 10 years, and seeing what goes on behind those closed doors, I highly recommend against any investing in such properties until and unless you have a full grasp of the Governing documents for each specific project as well as their Annual Budget, and most importantly of all, their Reserves Funding Plan. This single document tells you more about the financial condition than anything else, but you have to understand the numbers. Few agents, Board members, or owners do understand them. More often than not, they see a big number as "reserves" being held, and are suitably impressed. The number is meaningless, you need to know the details of the plan, and have a good idea how accurate the underlying numbers actually are. Boards often use the reserves to "adjust" their normal monthly fees, resulting in deferred maintenance, and potentially large expenses looming. You need to know where and how to look for them.

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  • Ryan BakerBusiness Member
    Lender · Strongsville / Cleveland, OH · Member since 2026 · 124 posts · 33 votes
    1d

    Congrats on starting early, Megan. A condo can be a fine first rental, but check the HOA dues, any special assessments and whether the building is warrantable, since those affect both your cash flow and which loan programs you can use. If you'd live in it for a year first, owner-occupied options usually need much less down than an investment loan, and the numbers look very different from a pure rental purchase. I do lending, and I'm happy to walk through the options on a quick call. My direct line and email are on my profile.

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  • Divin KanyamaBusiness Member
    Accountant · Seattle, WA · Member since 2025 · 671 posts · 285 votes
    1d

    @Megan Kim I wouldn’t rule out a condo just because most people talk about houses or duplexes, but I’d look beyond the $100K price tag. With a condo, you’re evaluating the association as well as the unit. I’d review the budget, reserves, meeting minutes, upcoming repairs, and any special assessments, then confirm the rental rules in writing—including whether renting a spare bedroom while you live there is allowed. I’d also have a lender check the specific condo project early, rather than assume financing will be straightforward.

    I'd run two separate budgets: one for actually living there with a roommate and another for renting the whole unit while you stay in Florida. Include HOA dues, taxes, insurance, repairs, vacancy, and management, with some room for dues increases. Having a friend nearby is a helpful starting point, but I wouldn't make them the entire maintenance plan or substitute their visit for an inspection. With limited capital, I'd care most about what cash is left after closing. It could be worth exploring, but I'd let the documents and numbers—not just the appealing price—decide.

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  • Ming Yi
    Investor · San Francisco · Member since 2026 · 51 posts · 24 votes
    1d

    A condo can work as a first rental, but underwrite the HOA first, not last. Dues, special assessment history, reserves, and rental restrictions matter more than the purchase price. A low price with rising dues and a rental cap can quietly erase the cash flow you modeled.

    Check three things before you offer: whether rentals are allowed and for how long, whether the association has pending litigation or deferred maintenance, and what insurance the HOA master policy actually covers versus what you must carry.

    For an out of state buy, your team is the deal. You need a local agent who knows rental demand, a responsive handyman, and a cleaner or manager you can reach on a bad day. If you may move to Raleigh yourself, that changes the math, since house hacking for a year can make a condo much easier to learn on.

    Start with one unit, conservative rent, and a full reserve budget. If it only works with perfect occupancy and no assessments, it is not a first rental, it is a bet.

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  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    1d

    @Megan Kim

    well, you asked two questions. and you got a bunch of AI responses... it's like they didn't even read your post.

    -should you buy a random cheap condo in Raleigh with no team in place and hope it does well as an LTR because you can't afford something in South Florida? 100% no. you SHOULD be nervous about this because it makes zero sense.

    -should you move to Raleigh and live there? I have no idea. do you want to move to Raleigh? have you been to this neighborhood? are you looking at the condo solely because it's something you can afford and not necessarily because it's a good fit?

    hope this helps

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    • Megan Kim
      OP
      Virtual Assistant · Miramar, FL · Member since 2026 · 4 posts · 9 votes
      1d

      Hi Nicholas, thanks for ur realness :) 

      I will say I have seen a lot of beginner investor stories where they are purchasing real estate somewhere far because they can't afford it where they live. As it stands, I'm pretty willing to get up and move for the sake of being in a real estate market I can participate in, and I know that is common as well. The Raleigh condo specifically was more of an example to illustrate the situation I'm in and the questions I'm having, not one that I'm married to. However, it was the nicest looking place I can afford from what I have seen so far. 

      If you have any real gems to drop on what other direction I could go in, I'd love to hear it!! 

      I'm wanting to take the road less traveled for the sake of my goals lol.

      1Reply
  • Cameron Parsa
    Real Estate Broker · Laguna Niguel, CA · Member since 2026 · 2 posts · 0 votes
    1d

    I wouldn't skip over a condo just because most investors talk about SFHs or duplexes.

    Something that may be a bad idea is buying something just because it's the nicest you can find. If you're open to moving, I would research what markets fit your budget and what you're trying to do. Once you find those areas, you can look at condos, duplexes or a smaller SFH.

    Make sure the HOA will allow you to do what you want. Find out how much the dues are, whether you can rent it out and if there are any assessments coming up that could affect your numbers.

    Try to think about your situation if it were to change. If you moved in and decided to leave, could you rent the whole unit? Would the rents still work if you purchased it as a rental property?

    It's always nice to have someone you know in an area. But I would want to know what market and property you're looking at first.

    You can start with a condo. I just wouldn't buy one simply because it's cheaper.

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  • Lauren CutchenBusiness Member
    Real Estate Agent · The Woodlands, TX · Member since 2019 · 226 posts · 84 votes
    1d

    @Megan Kim Condos can work as a first step, but I'd underwrite the HOA as hard as the unit. Pull the budget, reserve study, rental caps, and meeting minutes before you get attached to the price. Special assessments and rising dues kill cash flow that looked fine on the listing. If there's a chance you'd live there first, that usually makes financing and learning the building a lot easier. What's your max all-in monthly (dues + PITI) before it stops making sense?

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  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    1d

    Condos can definitely work as a first rental, just go in with eyes open on the HOA - the dues come right off your cash flow, and theres a lot of buildings with rental caps, minimum lease terms or a special assessment coming that can kill the deal, so pull the condo docs, budget and meeting minutes before you get too far. Financing is the other big piece - if you actually move there and househack it, thats an owner-occupied loan (FHA or conventional) which is the cheapest way in but the building has to be approved, and if its a pure rental from day 1 a lot of investor loans (like DSCR Loans) have $100k minimum loan amounts, so on a $100k condo you'll want to confirm the lender can go that small before you get under contract.

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  • Inder Singh
    Real Estate Agent · Boston, MA · Member since 2025 · 82 posts · 26 votes
    1d

    Megan, I started with limited capital too — my first purchase was in Revere, MA in 2020, and I went the small multifamily / house hack route. I'm now at 17+ rental units across 5 buy-and-hold deals, and I still prefer 2–20 unit buildings I can actually control.

    A condo can work, but underwrite the HOA like a second mortgage payment: dues, special assessment history, reserves, and rental caps. You don't control any of it, and one assessment can erase a year of cash flow.

    The strongest version of your plan is the house hack — move to Raleigh, live in it, learn the building, and let the low down payment work for you. The riskiest version is buying it as an out-of-state rental with no team in place.

    If the numbers only work with perfect occupancy and flat HOA dues, I'd pass and keep saving toward a small multifamily. What do the numbers look like once you add the HOA, taxes, insurance, and a vacancy reserve?

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  • Melissa HaworthBusiness Member
    Real Estate Agent · The Panhandle | The Emerald Coast | Panama City Beach | Destin · Member since 2017 · 287 posts · 107 votes
    1d

    Megan, condo can work as a first place if the HOA actually lets you rent (or househack) the way you want. I'd get the rental rules and reserve study before you get attached to any listing, wherever you buy. Since you're already in Florida and open to moving for the right market, just make sure you're underwriting dues, insurance, and any special assessments as carefully as the purchase price. Those line items are what usually surprise first-time condo buyers more than the HOA fee on the listing.

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  • BJ Everson
    Realtor · Columbus, Franklin County · Member since 2026 · 106 posts · 31 votes
    1d

    Megan, since your ideal is a duplex, I'd price the condo as a "learning deal" only if it still cash-flows after HOA dues, special-assessment risk and a full-property management fee — then compare that cash-on-cash to a small duplex or house-hack in a market you can visit. Condos can work as a first door; they just hide costs in the HOA line. If Raleigh is Plan A, ask for the budget, rental cap and reserve study before you spend on inspection. If you're open to Midwest 2–4 units later, the underwriting habit (leased rents, taxes at purchase price, reserves) transfers. What down payment and monthly housing budget are you working with?

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  • Ryan BrownPro Member
    Real Estate Agent · Louisville, KY · Member since 2022 · 100 posts · 32 votes
    1d

    Megan, I've owned a condo as a rental, and the HOA advice above is spot on. I'd add one more thing from my own experience: the rules can change after you buy.

    I purchased a condo in Coppershire here in Louisville and rented it mid-term for 90 days. Then the HOA changed the rules to prohibit leases shorter than 12 months. Nothing about the condo changed, but one of my rental options was gone. So beyond checking what the rules allow today, I'd make sure the numbers still work as a standard 12-month rental. I'd also look at the meeting minutes for any talk of new rental restrictions.

    On the out-of-state part, I wouldn't let that scare you off. Out-of-state investing is very, very common, and with the right team, it can go very well. Your friend in Raleigh is a nice bonus, but the team you really need is a local agent who knows rental demand in that area, a good inspector and a property manager. Put the management fee into your numbers from the start. If the deal still works with all of that included, buying in a market where you don't live is a normal way to get started.

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  • Benjamin Carver
    Real Estate Agent · Raleigh, NC · Member since 2019 · 317 posts · 290 votes
    1d

    Hey Megan, I am a local Raleigh investor and am in real estate full time here. Condo prices aren't bad but historically the appreciation tends to be very weak in our market and days on market for resales are super high. Don't see a ton of new construction condos here as they are not nearly as popular as other markets. For house hacking the HOA restrictions can be a pain and parking issues, but I know people who have done it. Most of my clients opt for townhomes because the apprec is a lot safer bet typically and parking can be easier. But it really all depends on your specific goals and budget. Feel free to reach out - I will shoot you a connection :)

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  • Adam Summerer
    Lender · Franklin, TN · Member since 2026 · 131 posts · 37 votes
    1d

    Quick financing note since you mentioned house hacking: if you actually move in, an FHA or low-down conventional loan can work, but for FHA the building has to be FHA approved (or get a single unit approval) so ask the agent about that early. If it's a straight rental from the start you're looking at investor financing with a bigger down payment, so at 100k make sure that number still works for you.

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  • Henry Lazerow
    Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
    1d

    I have had clients buy condos. Here is the three things to look at 1. NO HIGH RISES 2. NOTHING WITH AN ELEVATOR 3. NOTHING WITH A POOL OR STAFF

    If you follow these three rules you will avoid the high assesment and high special assesment buildings. Many talk about reserves but many buildings in Chicago run with low reserves and it works fine and is very common here outside large high rises.

    Of course also check HOA docs to make sure no rental caps. Many of our low rise buildings are very investor friendly. Its usually the high rises with all the rules.

    2Reply
    • Richard F.
      Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes
      23h

      Define "low reserves". Are you talking about dollars allocated, or percent funded?

      We have thousands of low rise HOA/COA units here, and reserves are absolutely the most critical aspect to review and understand. Every project is run by its own Board of Directors, who are owners within the project with no other "qualifications". Each Board makes its own decisions, selects its own vendors, and establishes its own budget and reserve funding plan. Each project has its own particular amenities, common elements, and recurring maintenance. Comparing numbers from any one project to any other is futile. You must understand the specifics of your subject project.

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  • Jaron WallingPro Member
    Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
    23h

    @Megan Kim Lots of quality information provide above. We don't have any experience with condos but I will say if you're currently renting now is a good time to attack. Buy a property that works as a future rental or something that needs a rehab (value add). The majority of investor put condos towards the bottom of the scale. There's so much red tape, rules, special assessments, bla bla that hold you back if/when you decide to rent it out.

    Buy something you can fully control and you'd be better off in my opinion; single family or duplex most likely. Homeowners insurance is much cheaper in Raleigh than Miramar, FL. Broward County ranks among the most expensive counties for property insurance in FL.

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  • Adam TafelBusiness Member
    Real Estate Agent · St. Paul, MN · Member since 2017 · 599 posts · 403 votes
    23h

    Debt is the reason why real estate is the best investment on Earth. If most of us had been saving up to buy properties with cash, we would not be nearly as wealthy as we are today, regardless of asset type. Cash flow is your protection against loss, and if you are buying out of state, do not underestimate your repair and capital expense and management costs. I don't see too many in-state self-managing landlords lose money, but I've seen plenty of out-of-state investors with property managers lose thousands.

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  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    22h

    Welcome, Megan, and good on you for starting at 24. Since you're open to househacking, check early whether the condo building is on the FHA approved list, because a lot of buildings aren't, and that decides whether you can buy with a low down payment as an owner-occupant. Lenders also look at the HOA's finances and how many units are rented, so the budget and reserve questions above matter for financing and not just cash flow. Run the numbers with the HOA fee, taxes and insurance included, then add a vacancy cushion and see if it still works.

    If a duplex is really what you want, don't rule out other markets. Columbus has small multifamily starting around $200K, and a lot of the deals I see there hit the 1% rule and cash flow after every expense, with $20K-$30K of built-in equity on most. Landlord-friendly rules also help when you're buying from a distance. Happy to connect, and I can introduce you to investor-friendly lenders and property managers here if you want to compare.

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  • Nadia Khan
    Real Estate Broker · Member since 2026 · 4 posts · 1 vote
    15h

    Definitely doable! Just watch out for high HOA dues and special assessments as they can eat your cash flow....

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  • Marc MoraPro Member
    Investor · Fort Lauderdale, FL · Member since 2026 · 101 posts · 18 votes
    5h

    @Megan Kim , let's connect. A $100K condo plus someone in Raleigh who can walk it for you is a decent start. Whether you'd live in it or rent it out from Florida matters a lot, since those are very different amounts of risk and work. With any condo, I'd check the HOA fee and its rules on renting too.

    I could pass along some names, if that would help. Is moving to Raleigh a real possibility for you?

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  • Arman AhmedPro Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 970 votes
    28m
    Quote from @Megan Kim:

    Hi all, I’m 24 and I have pretty limited capital to get in the game. Ideally I’d want a duplex, and I hear almost exclusively of people talking about single or multi-family properties. I’m a bit nervous to buy out-of-state in an area where I don’t have any personal contacts (I’m located in south Florida and can’t reasonably afford most properties here), but I saw a condo in Raleigh listed for about $100k. It looks nice, I know someone in Raleigh I could ask to check it out (if I don’t end up moving there myself, lol).

    Has anyone in the community experimented with condo units as a part of their portfolio? I’d be shooting for either househacking and/or long-term rental tenants.

    Hey Megan! Condos can be a good starting point, but make sure you look closely at HOA fees, rental restrictions, and special assessments since those can eat into your cash flow. If you're open to out-of-state investing, I'd also look at the Midwest, where you may find more affordable duplexes and single-family rentals. Just make sure you have reliable property management and people on the ground before buying.

    [email protected]614-418-6081
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  • Chad Gray
    Raleigh, NC · Member since 2019 · 58 posts · 54 votes
    7m

    I would recommend a commercial / office condo instead if you're looking in Raleigh but that's a whole other story.

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