Condominiums may resemble an excellent rental property. At first sight, they are fascinating because they oftentimes have lower prices than single-family properties. Besides, those lower prices may come with hidden monthly costs that must be included in your calculations. For these and other causes, the condos you found in Overland Park may or may not be the best fit for you. Before getting a condo to utilize as an investment property, you should be very attentive to get all of the facts and information you need.
What makes condos such a great choice? Just like all investment properties, purchasing a condominium to utilize as a rental has both benefits and drawbacks. On the positive note, there are quite a lot that makes condos an appealing choice:
- Lower Cost: In various real estate markets, condominiums are less costly than comparable single-family homes. In case you are a new investor or if the price is a significant concern, this makes buying a condo one way to get over the cost barrier to entry.
- Desirable Locations: Condos are frequently situated close to urban centers and vacation destinations, making them enticing to renters looking to be close to such areas. In places where single-family houses are in short supply, purchasing a condo can help you gain access to new and different markets.
- Less Maintenance: When you buy a condominium, most maintenance tasks are often done for you. Condos often have small or no yards, and common areas are usually maintained by a building manager or condo association. This may mean lower maintenance costs than the usual single-family house.
- Amenities: Together with maintenance, some condo buildings will deliver a selection of added amenities. Depending on the condo and management, included services could range from cable and internet, garbage and sewer costs, pest control, and more.
Still, buying a condo has several potential drawbacks. These negative aspects may even outweigh all of the benefits listed above. These drawbacks may include:
- Condo Association Fees: Most condominiums are an affiliate of a homeowner’s association that implements a monthly fee. Sometimes, and reliant on how many services are prearranged, 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 factor 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 more problematic to secure financing for a condominium 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 existing 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 condominum that won’t appreciate very quickly is not a good option.
Last of all, buying a condominium as an investment property only makes sense if the numbers make sense. By knowing as much as you can about the true costs of buying and owning a condo, you can make the verdict that best fits your investing goals. Once you find the right condo, make sure to contact Real Property Management Lakeview to help you with your investing goals. Give us a call at 816-207-0750 or contact us online today!
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