Condos may seem like an excellent rental property. At first look, they are charming because they often have lower prices than single-family properties. But those lower prices may appear with hidden monthly costs that must be included in your calculations. For these and other reasons, the condos you found in Smyrna may or may not be the best fit for you. Before purchasing a condo to use as an investment property, you should be very cautious and get all of the facts and information you need.
What makes condos such an attractive option? As with all investment properties, buying a condo to utilize as a rental has both benefits and drawbacks. Fortunately, there are a few things that make condos an appealing alternative:
- Lower Cost: In various real estate markets, condos cost less than comparable single-family homes. If you are a new investor or if the cost is a central issue, this makes buying a condo one way to win against cost barriers to entry.
- Desirable Locations: Condos are often settled near urban centers and vacation destinations, making them charming to renters looking to be close to such areas. In places where single-family houses are in short supply, buying a condo can help you gain entry into new and different markets.
- Less Maintenance: When you purchase a condo, some maintenance tasks are usually done for you. Condos often have small or no yards, and common areas are usually maintained by a building manager or condo association. This may translate to lower maintenance costs than a typical single-family house.
- Amenities: Together with maintenance, some condo buildings will deliver a selection of added amenities. Depending on the condo and management, included services could range from cable and internet, garbage and sewer costs, pest control, and more.
Of course, buying a condo has numerous potential drawbacks. These negative aspects may even offset all of the benefits listed above. These drawbacks may include:
- Condo Association Fees: Most condos are part of a homeowner’s association that charges a monthly fee. Now and then, and depending on how many services are provided, these fees can be surprisingly high. If such fees cover a lot of attractive amenities and services, they may be worth paying. But you need to factor in all related condo fees, plus any potential special assessment fees, into your calculations. If you don’t, you could wind up making a costly investment mistake.
- Financing Options: It can be harder to secure financing for a condo than for a single-family property because conventional lenders often have strict rules for such loans. Some lenders may want assurances like proof that the condo building is at least 50% owner-occupied or that there are no current lawsuits counter to the condo association.
- Renting Restrictions: Some condo associations limit when and to whom you can rent your condo. Some may even necessitate you to live in or own the condo for a full year before allowing you to rent it out.
- Lower Appreciation: Condos usually gain in value at a different pace than single-family properties. If your investment goals do not rely on holding a property for many years, buying a condo that won’t appreciate very quickly is not a good option.
Eventually, buying a condo as an investment property only makes sense if the numbers make sense. By knowing as much as you can about the true costs of buying and owning a condo, you can make the decision that best fits your investing goals. Once you find the right condo, make sure to contact Real Property Management East Cobb to help you with your investing goals. Give us a call at 770-622-5657 or contact us online today!
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