Is buying a condo an investment? The answer to this question is a big YES, but only when you are buying a condo for the purpose of having it rented. If done right, investing in a condo for rent can yield stellar results.
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Why does the condo for rent make a great investment?
As with many other investments, several factors can influence the particular outcome in this kind of venture. However, overall, condos are beginner-friendly for people wanting to test the waters in the real estate business. Below explains why condominiums can make an ideal alternative for savvy investors who aim for a higher rate of returns without needing so much time on managing their properties.
1. Generous Payment Structure
Among the many barriers to entry in terms of investment, cost ranks the highest as start-up capital especially in real estate can be daunting. Compared to single family homes for rent, condominiums are less costly to build making it the most affordable alternative to get started. Also, a lot of pre-selling condos have generous deposit and payment structures so investors need not shell out a large chunk of money instantly.
2. Shared Maintenance Cost
It is best to find balance when it comes to expenses. While it is a fact that condominiums come with additional fees due to pest control, parking spaces, and other amenities, it is another fact that these real estate properties have significantly lower maintenance expenses as compared to single-family or multi-family properties. And since you pay for condo maintenance fees, you are no longer responsible for its upkeep, although you have to make sure that your rental fee is greater than your actual expenses for that particular unit.
3. Viable Locations
One good thing about condominiums is that they are strategically located where supply of single-family or multi-family home rentals are short. This is why you see them in downtown areas or vacation destinations where only a few freestanding residential properties are found. That being said, you are certain that you have a higher probability of having your condo property being rented as compared to those homes built in subdivisions that are situated in areas far from the centro.
4. Enticing amenities
In order to make the condominiums appeal to a larger target market, they are being custom-built using state-of-the-art construction technology such that they are able to offer many different enticing amenities. These include pools, gyms, playgrounds. In fact, there are condominiums that dedicate their ground floor for commercial spaces that provide the basic needs of their owners or renters.
5. Large and Growing Customer Base
A lot of members of the younger generations love living in the city and small spaces are becoming more accepted in the renter community. This only means one thing – high demand! Since demand for a condo for rent is high these days, you as a real property owner becomes more liquid in terms of selling the unit just in case you need a good exit strategy.
Be wise in deciding on making a condo an investment
As you can see, buying a real estate investment is not as straightforward as it seems to be. More often than not, people are blinded by their aspirations of becoming a homeowner or living a condo lifestyle that they fall into the trap of purchasing real estate properties under false pretenses that these structures are indeed an investment. So in order to make sure that you are making a wise decision of making a condo an investment, always have your objectives clear.
For first time investors looking for an entry-level investment, or more experienced ones who are looking to take advantage of demographic changes, the new condos in Burlington are a great investment to begin with. The wide range of options allows you to choose one that could land you another stream of income.
Have you made a condo investment recently? Why is that so? Share your story with us by leaving a comment below.