Is It Worth It to Buy a Condo?
Whether you’re a new or seasoned real estate investor, you may be asking yourself “is buying a condo a good idea?” After all, it seems that many people are more willing to purchase single-family homes.
If you’re interested in learning are condos a good investment, you’re not alone. Buying a condo can have several advantages such as lower costs and higher tenant appeal. Though, owning a condo can restrict your tenant pool and result in high fees.
To help you make an informed purchasing decision, this article will give you the information of determining if buying a condo for investment is an ideal choice.
Condos Offer Outstanding Amenities
Unlike single-family homes and apartment complexes, condos offer a wide variety of amenities for tenants. These amenities include:
- Children’s playground
- Indoor community clubhouse
- Private swimming pools
If you’re concerned that your condo won’t reach enough interested tenants, you can take solace in the fact that condos are considered luxury homes for this reason.
Condos Provide Excellent Security to Tenants
Another reason why you should consider buying a condo is that the building already has a dedicated security staff. In case an emergency happens, tenants can call on this security team for assistance rather than waiting for the police on their home.
Having a security team can help deter criminal activities such as burglary and assault. It can also provide peace of mind to your tenants and give them an extra level of comfort to move on.
You Don’t Have to Worry About Maintenance
Another benefit of buying a condo for investment purposes is that you don’t have to worry about maintenance. Condos have staff available to cut the grass, clean the facility, and rake the leaves if necessary.
This is important for two reasons. Many owners and tenants simply don’t have the time to tidy up their properties. The maintenance staff of condo facilities will take care of any cleaning and upkeep tasks you may have.
The second reason is that maintenance teams will make sure that your property values never drop due to poor exterior appearances.
Condos Offer Close Proximity to Popular Attractions
Condos are generally located right next to popular attractions and cities. This provides an extraordinary appeal to potential tenants who want to live next to shopping malls, restaurants, and public transportation.
This is also great for people who want to avoid a long commute. Living near a vibrant city offers rewarding benefits for tenants, and it will certainly attract more people to apply for one of your condos.
Condos Actually Appreciate Over Time
Traditionally, single-family homes are prone to depreciate due to gentrification. Over time, homeowners will grow older and buy homes elsewhere.
This can cause property values to drop significantly, which isn’t ideal for long-term property owners. Since condos are placed in strategic locations near cities and popular attractions, gentrification is less likely to happen in these areas.
This means that your condos can appreciate in value, improve your cash flow, and provide a higher return on investment (ROI).
Condos are Very Affordable
Compared to single-family homes, condos are much more affordable and accessible to real estate investors. The average cost of a condo is approximately $956,428.
Home prices in Toronto are slightly more with modern prices soaring above seven figures. Whether you’re a new or experienced real estate investor, you can buy more condos for an affordable price than if you took a traditional route.
One of the secrets to acquiring multiple properties is buying homes for below market value and reaping a high ROI. When you choose to buy condos, you’ll be able to gradually build long-term wealth.
Condos Aren’t Private
One of the disadvantages of buying a condo is that the tenant won’t have as much privacy as they would in a single-family home. In condos, tenants will have neighbors all around them.
People with families, pets, and small children, may not be interested in being too close to other people. They will likely want a house with a yard for their children and pets to play.
With that said, owning a condo may not generate the same tenant pool as if you were renting out a single-family home.
Condos Have Stringent Rules
Many condominiums have different rules for owners. Some employ rent caps, which restrict the number of condos you can rent out to tenants. Some of these facilities won’t even allow you to rent out your condos at all.
Before investing in condos, you should perform your due diligence in researching potential rental caps.
Litigation Can Be an Issue
Condo developers and associations typically encounter various legal issues, such as:
- Deceptive trade practices
- Contract disputes
- Construction defects
- Malpractice and warranty problems
If you’re planning on investing in condos, you may find it difficult to navigate these legal issues. Condos under fire may delay your ownership for several months. In severe cases, you could even lose ownership of your condos.
For this reason, many real estate investors choose to pour their money into single-family homes.
It’s Difficult to Sell Condos
Again, condos aren’t particularly popular among families. If you plan to sell your condos, you may run into significant market issues.
High condo fees can also prevent you from selling your condos at a fair market value.
Is Buying a Condo a Good Idea?
Ultimately, your decision to buy condos depends on the amount of cash you have and your ambition to expand your real estate portfolio.
If you’re a new investor, it may be wiser to invest in single-family homes first. However, if you have the capital and resources, buying a couple of condos may be worth it.
Doing more research into current market trends will help you discern whether or not to make an investment.
Ready to Invest in Condos
If you’re wondering is buying a condo a good idea, you’re not alone. There are several benefits to investing in condos, and we can help you expand your real estate portfolio.
Visit our website today to read our full article on this subject.