Condos may look like a perfect rental property. At first glance, they are alluring because they regularly have lower prices than single-family properties. Yet, those lower prices may come with hidden monthly costs that must be included in your calculations. For these and other purposes, the condos you found in Kennewick may or may not be the best fit for you. Before purchasing a condo to use as an investment property, you must be extra cautious about collecting all of the data and information you need.
What makes condos such an appealing option? Like all investment properties, buying a condo to use as a rental has both benefits and drawbacks. On the positive side, there are a lot of things that make condos an appealing option:
- Lower Cost: In numerous real estate markets, condos cost less than comparable single-family property. If you are a new investor or if the cost is the main issue, buying a condo is one way to overcome the financial barriers to entry.
- Desirable Locations: Condos mostly found close to urban centers and vacation destinations, making them appealing to renters wanting to be near to such areas. In a location where single-family houses are in scarce supply, acquiring a condo can help you gain entry into new and different markets.
- Less Maintenance: When you purchase a condo, several maintenance tasks are often accomplished for you. Condos frequently have tiny or no yards and common areas are usually maintained by a building manager or condo association. It will lead to lower maintenance expenses than an ordinary single-family house.
- Amenities: Apart from maintenance, some condo towers will give a selection of added amenities. Based on the condo and management, covered services could range from cable and internet, garbage and sewer costs, pest control, and more.
Of course, purchasing a condo has many potential drawbacks. These negative effects can also overcome the entirety of the benefits listed above. These drawbacks may include:
- Condo Association Fees: Most condos are part of a homeowner’s association that requires a monthly fee. Once in a while, and depending on how many maintenances included, these fees can be surprisingly high. If such fees cover a lot of attractive amenities and services, they may be acceptable to pay. But you have to provide all related condo fees, including 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 more challenging to secure financing for a condo than for a single-family property because conventional lenders often have strict rules for such loans. Some lenders would need assurances like proof that the condo building is at least 50% owner-occupied or that there are no previous lawsuits against the condo association.
- Renting Restrictions: Some condo associations limit when and to whom you can rent your condo. Some might even request 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 depend on keeping a property for many years, buying a condo that won’t appreciate very quickly is not an excellent choice.
At last, buying a condo as an investment property only makes sense if the numbers make sense. By understanding as much as possible about the true costs of buying and owning a condo, you can make the decision that matches your investing goals. When you have found the right condo, don’t hesitate to contact Real Property Management Tri-Cities to assist you with your investing goals. Give us a call at 509-572-5440 or contact us online today!
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