Investing in a condo is similar to investing in a house, but not exactly the same. Many aspects of owning a home are the same across both types of properties, and some are quite different. There are pros and cons to buying both, and they’re detailed below.
We’ll review what you should think about if you’re considering purchasing either type of property as an investment property.
What is a condo?
A condo is very similar to an apartment, but not the same. You can think of a condo as being sort of like an apartment in terms of how you use it and what it’s good for, but it’s different in that you are technically buying your unit rather than renting it. Which means that you will own the property outright and be able to do with it as you wish. This can be a good investment if you buy at a low price in a neighborhood that is up-and-coming or has lots of commercial activity nearby. And even if the value of your property doesn’t increase across time, at least you’ll have a place to live!
But more importantly, when buying any kind of real estate property—a house, townhome, or condo—the key is always location. Find the right place and invest some money in making cosmetic improvements (new paint job and flooring), then buy low and sell high later on—if that’s what you want to do. Or just hang on to your new condo as an investment property for future profit potential!
Pros of buying a condo
So, you’ve asked yourself, “should I buy a condo?” Here are some solid reasons to go for it:
- Hoa Fees cover maintenance costs. These fees cover the building’s structure and exterior and each owner shares equally in the costs.
- You can rent out your condo. If you want to make some money on your investment, this is a great way to do it! Just remember that individual buildings may have rules about renting out your place, so be sure to look into those before you sign anything.
- There are more amenities. Condos often come with access to fitness centers or pools that an apartment complex does not offer and condos have better security since there are limited entry points for guests. This can give you added peace of mind—especially if you opt to rent yours out when you’re not using it.
- It’s easier to build equity. There may be greater restrictions on ownership in an apartment complex that would interfere with the building of equity over time; buying a condo could be a better investment than renting an apartment if equity-building is important to you as part of your retirement plan or future financial goals;
Cons of buying a condo
HOA fees can be a huge pain. Not only do you have to pay them every month, but you may have to deal with angry neighbors, a HOA that can take over your property if you don’t follow the rules, and late fees for non-payment of fees. If you are in an apartment building, then it’s not uncommon for a HOA to be under the control of the owner or management company—meaning they can do anything they want with your property. There are many horror stories about owners cutting off utilities or not allowing any sort of remodeling or improvements without HOA approval. That’s why it seems like a good idea to try to keep as much control as possible over your own property.
Most condos are owned by corporations, so there is little flexibility in how they operate. However, there is one thing you can do: request an exemption from the HOA so that you won’t have to pay their fee—and peruse this handy list for tips on what you need to do in order for this exemption request to be successful.
Where to buy a condo
When it comes to real estate, location is everything. If you’re thinking about investing in a condominium for its potential appreciation, then the first step will be to understand how its location affects value.
If your goal is long-term profit from real estate investment, then consider condos near hospitals, universities, transportation hubs and places that attract tourism or entertainment activities. If you’re thinking even longer-term—10 years or more—consider buying condos in other countries such as Mexico where property values are still low compared with U.S. cities
A condo can be a good investment.
A condo can be a good investment for the right person. In many ways, condos have advantages over single-family homes. Condos are easier to maintain because you have access to shared amenities, and you don’t have to mow your lawn or shovel snow on the weekends. They’re also perfect for people who travel frequently because they’re easier to lock up and leave than a house. Another reason is that they’re more affordable than houses, and they typically require a lower down payment as well.
Some things you’ll want to keep in mind when considering buying a condo are:
- HOA fees: These monthly payments help cover the cost of shared maintenance and amenities, but they can go up unexpectedly or be used for repairs that aren’t common across all units in the condo building (for example, fixing damage from an accidental fire).
- Rules about pets: Some buildings don’t allow pets at all—or only allow certain breeds or types of pets—which could limit your options if you own an animal or plan on buying one soon after moving into the unit. Other rules might apply as well, such as restrictions against smoking on balconies or having guests stay overnight.
If you are looking to buy a condo at a great price then Mexico could be a great option for you. Buying a pre-construction condo can save you lots of money and when it is complete the value of your condo has increased significantly.
Click here to explore buying a pre-construction condo in Mexico.
Related articles:
7 Reasons to Invest in a Condo in Mexico
What Are Condo Fees In Mexico?
Why Do People Buy Condos In Mexico?
Which Type Of Mexican Property Should Americans Buy
What Is A Fideicomiso? Buying Mexico Real Estate For Americans
