Due to the lock-and-leave feature, offered maintenance services, and modern amenities, the option of condo living is becoming highly popular within US real estate. The buyer rush is showcasing potential financial gains from investments in condominium properties. Considering the national and international economic uncertainties it’s important you know the facts before investing in condos.
To ensure a safe and successful investment, you must first understand the reasons behind the extensive popularity of condos. Following this, a critical analysis of various aspects of condo investment is beneficial for solidifying your decision.
Reasons for Condos’ Popularity
- Condos are often cheaper than traditional family houses.
- The house owners’ association is in charge of common area maintenance.
- Limited value reduction during economic nosedives.
- Lower handling costs.
- Greater safety and security.
- Comparatively higher rental opportunity.
Know The Most Common FAQs Before Investing in Condos
Higher dominance over condo-investment basics not only secures your money but also generates evaluative visuals on the ins and outs.
What should I consider in financing?
Getting financing for condos is a bit different from lending for family homes. Condo fees are highly assessed by banks and financial institutions, and often approve a comparatively lower amount to lend. In addition, the mortgage rate for vertical living solutions is slightly higher than the rate for horizontal establishments; the difference is calculated at 0.125%–0.25%. Most importantly, there are monthly HOA fees that should be added to monthly mortgage payments.
How do HOA’s rules and restrictions matter?
Truly, it is one of the most important factors to consider when investing in condos. Every high-rise has different rules and regulations regarding renting, pets, guests, parking, common area uses, and many more.
To elaborate, many HOAs do not allow tenants or allow a certain number of units to be rented. In such cases, your projection of making a profit by renting is not feasible. No tenants means losing a monthly $1,500-$3,200.
How does location selection affect the investment decision?
Without a functional location and associated facilities, your property will wait longer on the market in the event of resale or rental. You have to strategically select the particular property by coinciding budget, earning potential, and offerings. To develop a comparative visual, the below list has been produced.
If your budget is high, you can go for a vacation condo in Miami, Florida, priced between $1,250,000 and $1,390,000. Benefits are counted: higher tenant flow, luxury living, breathtaking views, ultra-modern amenities, etc. In case of having a low budget with a higher determination of beachfront condo purchasing, Daytona Beach can be handy. Here, a condominium property can cost you around $379,000–$624,900 (2-bed, 2-bath, area 1,072-1,674 sq ft), offering the same advantages as Miami plus a rapid price increase.
An honorable mention is Gulf Shores, Alabama, a hidden gem in the condo market. With metro-living facilities, while experiencing the ocean’s beauty, plus boat access, open-door fitness facilities, etc. The maximum price of a Gulf Shores condo is $2,050,000, and the minimum price is $214,900.
Condos’ for Working Class Population
To live in prominent metro locations or to get year-round full occupancy, New York condos are the best. All you need is a fat wallet. A 2-bed & 2-bath high-rise space price is $1,750,000, and a 3-bed & 3-bath space price is $6,995,000.
The benefits are numerous; the unique ones can be termed as wide acceptance of foreign investment, living near the workplace, living in fantasy when the skyscrapers are lit, having an amazing city view during the day, and so on. The same features and facilities are applicable for owning a unit in Washington’s vertical extensions; the price ranges from $390,000 to $689,000.
Suburban condominium spaces are not suitable for passive income generation, but they are the most appealing alternative to traditional houses with arranged services.
In this criteria, Chicago is the best, charging $330,000–$474,900 for spaces with 3-bed and 2-bath. Higher ROI, quiet and peaceful living, participation in the robust economy, green views, etc. are the benefits.
Are condos capable of appreciating their values?
Simply put, yes. With a great location, modern amenities, more facilities, and exclusive features, a condo’s capability to appreciate its value 38.7% in five years.
Is there any litigation?
Disputes and conflicts between the builder and HOA are commonly observed in the case of vertical properties. Often, unethical builders go for below-standard jobs. As an investor, you should avoid this, as you will be charged frequently for lawyer fees while spending a significant amount of money on property assessments.
What Is The Cost of Decorating A Condo?
Decorating a condo can be an expensive and time-consuming endeavor. Many people underestimate the true cost of decorating their condo, especially when they are short on time and resources. Depending on the size of your condo, the amount of furniture you need, and the types of materials you choose, there is no one single answer to what it will cost to decorate your condo.
The simplest way to estimate the cost is by looking at each element individually. Paint, wall coverings, flooring options such as hardwood or ceramic tile, windows treatments such as curtains or blinds all add up quickly in terms of price. Additionally, if you decide to hire an interior designer for custom pieces like cabinetry or furniture reupholstering that can add significantly to the overall cost.
The aforementioned most common FAQs about investing in condos are perfectly fine for the next generation. To be accurate, you must conduct extensive research on each living space in upward buildings. Hence, investing in the right condo at the right location plus the right timing is the key to success.0