Condos, short for condominiums, are individually owned units that compose one housing complex. The units may be attached or detached and can vary in size from studios to 3- or 4-bedroom residences. Homeowners’ associations cover these condos, often located in downtown areas.
Among property investment options, condos are the most approachable due to their versatility, lower price point, and minimal upkeep. But like any business venture, owning condos presents several pros and cons that you should research before committing to a purchase. Here are some factors to consider:
Price & Value – Since condos have a lower price tag than single-family homes, they’re a less daunting investment—especially for first-time buyers. On the flip side, condos appreciate more slowly than single-family homes and typically have less square footage. Financing a condo may be tricky, and the mortgages bear slightly higher interest rates.
Location & Amenities – Condos often reside in city centers or within easy walking distance of shops, restaurants, and various attractions. Multi-unit complexes also feature amenities such as a gym, a pool, a grilling area, or a dog park. The better the location and amenities of the condo you’re considering, the better the return on your investment will be!
Maintenance & Fees – Condo maintenance requirements remain low for both landlords and tenants. An association usually oversees exterior maintenance, such as yard work and snow removal, in return for a monthly fee. Low maintenance is an attractive condo feature, but remember to budget for the association fees. Remember that fees may increase over time.
Rules & Limitations – Besides charging monthly fees, each condo association will impose regulations on condo residents. Whether they limit the type or number of pets, décor options, or the owner’s rental rights, assess association rules before buying.
Note that the quality of a condo’s construction, upkeep, and location will impact your ability to secure tenants and determine the rent level you can charge. But if you find an attractive, well-managed complex in a thriving location, a condo might perfectly complement your investment portfolio!
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