All Forum Posts by: Eliot Rubin

Pretty much everyone seems pretty against condos as investments. I will take your word for it. I do see however see two potential advantages of putting my money in a condo.
1. You can further leverage your money as condos are cheaper due to HOA fees and thus they seem to flucatuate much more in price.

2. You have some form of property management so I don't need to waste as much time myself on that stuff. Especially if I didn't end up living there myself.

This is not to say that these small upsides outweigh the downsides of condos..

Thanks guys. I think cap rate is what I was really looking for.
@ben hughes
Yeah I guess I would agree that it would be hard to make profit from renting condos.. However, living in Boston I think it wouldn't be unwise to consider buying one to live in. I certainly dont want and can't afford to live in a home in this area. I just wanted to know how to gauge the prices to see weather a particular unit, or a whole market was currently undervalued.

Thanks guys, I think Cap rate is what I'm really looking for. Appreciate your help!

Hi all,
I'm looking to jump into real estate soon. I am trying to decide between buying a condo or perhaps a multi family home. I have read that a good method for estimating the true value of a home is to compare it to expected yearly rental income, much like a Price/Earnings ratio. So a 160k home that brings in 10k a year has a P/E ratio of 16. I hear 16 is the US average for homes. I'm sure this method leaves out some important things to consider but nonetheless, it seems pretty darn useful.

My questions is how can I apply this to condos. Is 16 an average for condos? Should I factor this by subtracting the HOA fees from the rental income. If so, it seems you would be undervaluing the condo (or overstating the P/E ratio). I say this because HOA fees cover many types of spending that also occur on single or multi family homes (roof, plowing, heating repairs etc) and these costs would not otherwise be taken into the first equation when valuing a single family / multifamily home.

I look forward to hearing some useful info on how to value properties, I certainly still have much to learn.

Thanks in advance!

Hi all,
I'm looking to jump into real estate soon. I am trying to decide between buying a condo or perhaps a multi family home. I have read that a good method for estimating the true value of a home is to compare it to expected yearly rental income, much like a Price/Earnings ratio. So a 160k home that brings in 10k a year has a P/E ratio of 16. I hear 16 is the US average for homes. I'm sure this method leaves out some important things to consider but nonetheless, it seems pretty darn useful.

My questions is how can I apply this to condos. Is 16 an average for condos? Should I factor this by subtracting the HOA fees from the rental income. If so, it seems you would be undervaluing the condo (or overstating the P/E ratio). I say this because HOA fees cover many types of spending that also occur on single or multi family homes (roof, plowing, heating repairs etc) and these costs would not otherwise be taken into the first equation when valuing a single family / multifamily home.

I look forward to hearing some useful info on how to value properties, I certainly still have much to learn.

Thanks in advance!