Condos could seem like an ideal rental property. The usual first impression, they are charming because they usually have lower prices than single-family properties. Except, those lower prices may come with hidden monthly costs that must be included in your calculations. For these and different basis, the condos you found in Satellite Beach may or may not be the best fit for you. Before purchasing a condo to utilize as an investment property, you should be very attentive and always 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 use as a rental has both benefits and drawbacks. On the plus side, there are a few things that make condos an appealing option:
- Lower Cost: In numerous real estate markets, condos cost less than comparable single-family houses. If you are a new investor or if the amount is a major issue, this makes buying a condo one way to overcome the cost barrier to entry.
- Desirable Locations: Condos are normally located close to urban centers and vacation destinations, making them attractive 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, certain maintenance tasks are often done for you. Condos often have little or no yards, and common areas are usually maintained by a building manager or condo association. This may mean lower maintenance costs than a typical single-family house.
- Amenities: Along with maintenance, some condo buildings will provide a selection of added amenities. Contingent 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 plenty of potential drawbacks. These negative aspects may even overshadow 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. From time to time, 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 include 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 against the condo association.
- Renting Restrictions: Some condo associations limit when and to whom you can rent your condo. Some may even require you to live in or own the condo for a full year before allowing you to rent it out.
- Lower Appreciation: Condos typically 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 absorbing as much as you can about the true costs of buying and owning a condo, you can decide that best suit your investing goals. Once you find the right condo, make sure to contact Real Property Management Brevard to help you with your investing goals. Give us a call at 321-610-8022 or contact us online today!
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