What fool would invest in condominiums?

Date:   9/11/2009 10:13:16 AM ( 15 y ago)

Investing in condominiums

The ideal of investing is to make money. All investors want a positive cash flow and with the possibility of a quick return ,so investing in condominiums is a ridiculous concept. Condominiums are the hardest real estate to resale and therefore not a wise investment. Many times the price of the condominium coupled with the association fee, will come to the price of a regular freestanding home.

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Condominiums have many down sides not just the sometimes huge association fees, they have restrictions. Many times the association fees have such restrictions as:

1. No pets

2. No building of any kind

3. No extra tenants allowed on the premises for longer than two weeks

4. Age restrictions

5. Not being able to rent the condominium out to tenants

These are some restrictions, but not all condominiums are so restrictive. Some condominiums are very lenient at the time of purchase. Keep in mind the election of the board changes yearly and rules and changes can occur at any time. All boards elect a new president yearly and it might be a way for you to become a member of the board and make some positive changes.

Advantages of owning a condominium are many also. If you do not want to do yard work, do not want to maintain the exterior of the home, do not have time to hire maintenance workers and you want to feel secure having a very close neighbor, then a condominium could be right for you. Having said all of this, a condominium for a particular reason is understandable, but not for investing.

A typical condominium takes twice as long to sell as a regular home. In a bankrupt and foreclosure market, no investor in their right mind would ever consider purchasing a condominium. The only exception to this rule, is that an investor would consider purchasing a condominium, if the condominium is being sold at a very low price. So if the condominium is going for one third below market value then the condominium would be a good investment.

When considering to purchase a condominium as an investment, make sure you check the association rules to see if the condominium could be rented to a tenant. If you are a first time home buyer and want to live in the condo and plan to resale in 2 years or less with doing some upgrades to the condo, then check on resale values of condos.

Learn more about this author, Barbi Trejo.
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