Owning a condo as your personal residence can provide you with a long list of benefits – starting with the fact that most, or even all, of the exterior maintenance falls to the association. So, as a real estate investor, are condos better than single family houses?
The answer here is that it can depend. One reason for this is because, even though you may not have to spend as much time repairing and maintaining the property, there are several other factors you need to consider.
For example, first, not all condominium developments will allow you to rent out the property (or alternatively, there may be a “cap” on the number of units in the development that can be rentals). In other instances, the tenants must be an immediate family member. So, it’s important that you know if – and to whom – you are able to rent to before moving forward with your purchase.
In addition, condos can oftentimes be more difficult to finance than single family homes. In this case, a lender may require 20%, or even more, as a down payment. It is also important to keep in mind that in addition to your mortgage and interest payment, condos typically have monthly home owner’s association (HOA) fees. These can range from a few hundred dollars, or more, depending on the location and amenities.
If you are seeking equity build-up in addition to rental income, it is also essential to keep in mind that for the most part, condos tend to appreciate more slowly than single family homes. In this case, then, condo owners may need to hang on to their property for a longer period of time in order to profit.
Regardless of the type(s) of property you choose for your investments, being able to rely on an experienced property manager can save you a substantial amount of time. And, by delegating tasks such as maintenance and rent collection, you’ll be better able to concentrate on other things, while at the same time earning a nice stream of incoming cash flow.
If you own rental property in Orlando and / or the Central Florida area, give us a call for more information.