Condo Vs Residential Rental Units
I am looking at purchasing a newer condo unit for the purpose of renting. This would be in an executive or retiree type setting... no playground or pool.
My question is what would the advantages and disadvantages of this be over a "normal" residential duplex?
Advantages?
You are buying less land and more structure.
Maybe you will get a good deal on maintenance as the common areas are covered. Just depends on the cost in HOA.
Disadvantages?
Likely to see lower returns of appreciation as it is a condo. Somewhat depends on the development as some do well but most are not as good as a SFR. Compared to a duplex it might be a too up.
The duplex is less likely to be completely empty at any one time.
I will leave it to others to add to the pro and con list.
John
[addsig]
Condo disadvantages:
The monlthy condo fees will drain your profits.
Plus, you're at the mercy of the all-powerful condo association.
For instance, if they decide the complex needs a new roof, you've got little choice but to pony up your percentage of the costs.
In a nutshell, with a condo, you lose financial autonomy.
Hope this helps.
[addsig]
I'm make sure you can rent it out before you get too deep into your analysis...lots of condos/twnhm in my area don't allow you to rent them out (association doesn't that is)
It is in the by laws that it can be rented.
another consideration, they appraised at 124500, and they are selling for 119000, may be able to get it for 116000, but not much dealing as it is a developer selliing all the units. Should I shy away and look for a private seller if I want to go the condo route to get out of maintenance issues?
gras said "go the condo route to get out of maintenance issues"
did you mean the duplex route?
I think you might have an opportunity there is there are a hand full of developer units.
Buy a couple and get a discount.
It does, however beg the question why didn't these sell?
I meant go the condo route to get out of the yard maintenance and all that.
A developer built them and rented them all. Then a company bought the whole place and is elling them off one by one. That is what I meant by buying from the developer... actually it is the second ahnd purchaser of the whole comples who is selling them.
5000 - 6000 dollar discount off appraisal doesnt sound like much of a discount. Would I be able to buy other condos from individuals at a deeper discount most likely?
Montly does are 145 a month.
Some units rent now for about 925 / mo.
purchase price would be 119500 or so.