Are Condos a Good Investment?

What Is a Condo?

A condo, or condominium, is a private residence within a larger building or community. It can be a multi-story townhouse or a single unit in a high-rise with other condo units above and below.

As an investment property, a condo can be rented out to tenants. This can make it seem very much like an apartment. The difference is ownership. Individuals own each condo. But apartments are rented out by someone who owns the entire building.

A property owner purchases a condo and pays a monthly condo fee (in addition to the purchase price of the condo itself). This fee covers the maintenance and upkeep of common areas shared with other owners in the condo community.

Should you buy a condo as an investment property?

It depends on some key things, as does any real estate investment.

Most important are the property's location and the financials. No matter what, the condo's location has to be a desirable one with a qualified pool of tenants.

In addition, the return on investment (ROI) of the specific property needs to be in synch with your investing goals.

Condos make up a portion of my real estate portfolio, along with single-family residences. So I'd say that, yes, a condo can be a good investment.

Here are the pros and cons to consider.

Investing in Condos Pros

• Less maintenance to worry about: One of the biggest benefits of condo ownership is that other people do the exterior property maintenance for you. 

• Affordability:  it's typically less expensive to purchase a condo than a single-family home or townhouse with similar features. 

• Amenities: A big benefit of condo living is access to high-quality community amenities. There's often a club room, pool and fitness room.

• Security: Most condo buildings have enhanced security. You usually need a key to access the building before getting to the front door of your unit.

• Condo rules can preserve your investment property's value: There are typically more rules to follow as an owner in a condo community. You'll need permission from the condo association to make changes to your unit, inside or out.

Investing in Condos Cons

• Neighbors behaving badly :As you live in condo there are neigbor bised above and blove you if you met the bad one it would be so annoyed.

• Increasing condo fees and/or special assessments: Condo fees generally go up every few years with the cost of inflation. In addition to monthly fees, you may get hit with an expensive one-time “special assessment.” 

• Property mismanagement potential: If the condo association does a poor job of maintaining the common grounds, it can reflect poorly on the entire community. 

• Condo rules can limit your freedom: Most condo communities limit the number of units that can be rented. If the limit is already met, you can't rent out your property.

• Selling may take longer: There can be a smaller pool of condo buyers than buyers for single-family homes. So when it's time to sell, you may be looking at a longer number of days on the market. But again, it all depends on the location. Condos in hot areas sell faster than houses.