From what I'm hearing, the unit already has a tenant that's locked into a 2 year lease, so that will be immediate income. I just want to make sure I have all bases covered because I've never bought property of any kind. Hell I still live in an apartment, but the condo is a good deal and I can just move right in should something happen to the tenant since I'm not in a lease. Give me some insights yall!
Thinking of buying a condo unit for investment property...any tips?
- Thread starter YungDHurt
- Start date
Subs for info been thinking about buying one too. What area are you in.
perhaps join a local real estate chapter in your community. you get discounts on vendors, plumbers, contractors etc and maybe more indepth info on condos check online like sites like http://www.biggerpockets.com/forums/
for real estate info good luck. also good luck
for real estate info good luck. also good luck
I've bought several properties, condos included. First step to getting into real estate is get your own property. Check out www.naca.com for a first time homebuyers program. They pay all downpayments and closing costs. It's a time consuming process but well worth it for your first home.
They don't finance investment properties though. From their buy yourself a 15-20k 2 br condo for to rent out.
They don't finance investment properties though. From their buy yourself a 15-20k 2 br condo for to rent out.
Good drop bruh! So you think I should ditch the cheap apartment, buy a home, and then buy the cheap condo to rent out? Is that because of all the loot that I can get from naca.com for living in my first place?
I'm doing the same thing in atl. I bought two condos so far and so far so good. A couple of key things to consider.
1. Make sure the homeowners association covenant allows rentals. You say the property already has a tenant so it shouldn't be a big deal, but double check to be sure.
2. Watch association fees. I try to stay at 30- 60 bucks. Some can go as high as 200. The more features a community has the more probability the association fees will go up due to inflationary costs of upkeep. Beware aggressive associations that like to spend.
3. Your monthly profit should be at least 40% of monthly gross. (ex. if the rent is 1000 a month, 400 should be profit after monthly fees -mortgage, association fees.) This will give you a cushion for repairs, vacancies.
1. Make sure the homeowners association covenant allows rentals. You say the property already has a tenant so it shouldn't be a big deal, but double check to be sure.
2. Watch association fees. I try to stay at 30- 60 bucks. Some can go as high as 200. The more features a community has the more probability the association fees will go up due to inflationary costs of upkeep. Beware aggressive associations that like to spend.
3. Your monthly profit should be at least 40% of monthly gross. (ex. if the rent is 1000 a month, 400 should be profit after monthly fees -mortgage, association fees.) This will give you a cushion for repairs, vacancies.
Think long and hard. Condos are like children, they are better in theory, but at least you got what you wanted...or did you?
Know your market, understand your association fees, and make sure you understand if it can be resold.
Besides that, reconsider.
Know your market, understand your association fees, and make sure you understand if it can be resold.
Besides that, reconsider.
I just wanted to co-sign that you should think long and hard...
BUT, if it's what you want then go for it. My mentor always tells me, "You are young enough to make mistakes, learn from then try again."
Know your neighborhood which tells you rent-ability. If you have zero experience then you need to do your homework and understand tenant rights and land-lord responsibilities. Because of those things I prefer to manage property managers. Yes, you have to watch those thieves like a hawk but they usually know their business.
Make sure you can afford what you buy and have free "oh shit" cash.
My 2 cents
BUT, if it's what you want then go for it. My mentor always tells me, "You are young enough to make mistakes, learn from then try again."
Know your neighborhood which tells you rent-ability. If you have zero experience then you need to do your homework and understand tenant rights and land-lord responsibilities. Because of those things I prefer to manage property managers. Yes, you have to watch those thieves like a hawk but they usually know their business.
Make sure you can afford what you buy and have free "oh shit" cash.
My 2 cents
what are the ##s?
purchase price?
rent the tenant is paying?
condo fees in addition to mortgage?
is there a security deposit for the tanant?
factual details:
have you met the tenant ? you should know who it is you will be renting to for the next 2 years.
as stated, what is the neighborhood like? you say you can move in if tenant leaves, but is it somewhere you'd want to live? It's OK to rent to someone else somewhere you wouldn't want to live yourself, but if your safety plan is to move in if your tenant vacates be sure you want to move there rather than had to move there.
You don't need to own property to be an investor. Invest with long term goals in mind. If your rent is cheap stay there and keep a strategy of getting investment properties. With prices as low as they are now it's a good time to buy and hold onto properties. It used to be about flipping a few years back - in some markets it's still about flipping for profits. But you can buy condos (or houses) cheap (without having to spend a lot to fix up hopefully), stack your $$$ and buy something for yourself with all cash (or mostly cash with a low monthly mortgage).
How's that for a tip!!??
purchase price?
rent the tenant is paying?
condo fees in addition to mortgage?
is there a security deposit for the tanant?
factual details:
have you met the tenant ? you should know who it is you will be renting to for the next 2 years.
as stated, what is the neighborhood like? you say you can move in if tenant leaves, but is it somewhere you'd want to live? It's OK to rent to someone else somewhere you wouldn't want to live yourself, but if your safety plan is to move in if your tenant vacates be sure you want to move there rather than had to move there.
You don't need to own property to be an investor. Invest with long term goals in mind. If your rent is cheap stay there and keep a strategy of getting investment properties. With prices as low as they are now it's a good time to buy and hold onto properties. It used to be about flipping a few years back - in some markets it's still about flipping for profits. But you can buy condos (or houses) cheap (without having to spend a lot to fix up hopefully), stack your $$$ and buy something for yourself with all cash (or mostly cash with a low monthly mortgage).
How's that for a tip!!??
fow who ever 1-starred this
With this answer simply add-
how long has the tenant been there
how long was the property on the market (unrented) prior to this tenant
what type of tenant is it (is it section 8 or employeed)
how long has the tenant been there
how long was the property on the market (unrented) prior to this tenant
what type of tenant is it (is it section 8 or employeed)
This is excellent advice.
Few notes - historically a single family house has the highest return on investment as it relates to residential real estate. I don't like condo's, because you may find yourself beholden to a condo board. But so long as you have the points above covered, and your sure you can keep the unit rented, go forth and prosper..I would still recommend single family however.
1 point about condo fees. As a condo development gets older, the costs to maintain usually increases. So you may find yourself buying a cheap condo, with reasonable fees today, but 2 years from now the roof needs to be fixed, and the condo board hits you with a fees increase or a mandatory assessment. If your focus is condos, the newer the better.
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