The good thing about condo investments is that you have a wide range of options. How can you know the right choice for you? Is purchasing a condo a good investment? The truth is that it can be a great investment in certain situations, but not the right one in others. There are advantages and disadvantages to any given real estate purchase.
What is a Condo?
Before deciding whether a condo is a good investment or not, you need to understand what a condo is and what makes it different from other types of a home. A condo can be defined as a building that is divided into many units. These units are sold separately to the individual owners. Every unit in a condo comes with a title or deed.
Common areas in the building such as community area, elevator, roofing, or parking belong to all unit owners. Every person is responsible for sharing of maintenance and repair costs of common areas. The condo association is responsible for making decisions and maintaining the building. Owners pay a fee to an association that is in charge of upkeep.
Buying Condos for Personal Use
A real estate investment will be considered great when the value of a property is worth more as compared to the purchase price. That is the easiest way of thinking about great investments. You should note that home improvement costs and maintenance costs can easily take an investment from good to bad. A good loan with a high-interest rate may not be a wise investment for the condo. That depends whether the property value increases to cover interests on the loan.
Buying Condos for Rental Income
Maybe you are planning to rent out your condo. In this case, the monthly mortgage, costs to maintain the property, and even condo association fees can have an impact on whether or not the condo is the right investment for you. It is advisable to set the rent high enough to ensure it covers all these costs. If you find a condo at a low price, then the investment can be worth it. You should note that any lowly priced condo ought to be thoroughly vetted.
Condo versus Apartment
An apartment and a condo are quite different. They may feel and look the same, but the condo units are properties, and apartment units are part of a single property. Also, apartments are leased. In such a case, you do not own the property, and you are not responsible for repairs and maintenance.…