Last week I asked all of you is it a good idea to buy a condo as an investment? The real estate pros have spoken and as you can see from the chart above, the overwhelming majority felt there were some opportunities in condos at the right price points while over 20% felt that you should avoid all condos. The comments highlighted some huge pitfalls from condos along with advantages/opportunities.
What did real estate pros say on buying a condo?
I was a bit surprised by the answers, only 2% felt that condos overall were a good investment, 23% said stay away from all condos, and 75% felt condos were a good investment in very select markets at the right price points.
What do real estate pros think the key pitfalls and advantages of a condo purchase
The overwhelming majority felt that there were some opportunities in condos, but buyers need to be extremely careful. Essentially the days of everything in real estate turning to gold are over and there is some downside risk in real estate along with upside in select properties. Here are some of the best comments:
- The overwhelming majority of lower priced condos are a bad investment with the HOA fees, but there are still opportunities in low rise condos in good locations at the right price point
- HOA’s have been mismanaged for decades, reserves are woefully underfunded and insurance costs added to the mix just make them a bad investment. I sell in both CO & FL, wouldn’t recommend purchase in either state
- Florida beach. Ski in ski out, both are probably holding up
- Depending on HOA fees, price, and location, condos can be a great entry point into home ownership. From an investment standpoint they have the upside of future rental potential, lower maintenance costs, and can usually be found in more desirable areas for a lower price point than a home or townhome.
- As a general rule, I am no longer a huge condo fan…too many insurance, management and financial issues associated with HOA’s. However, in specific markets and locations, they are still the only reasonable and affordable option – it’s just critical to do your research before buying.
Thank you everyone for your participation and insights in my survey. The insight in the comments from readers was amazing and I hope everyone gained a good perspective from your fellow readers. My key takeaway from this survey is that you need to be extremely careful when buying a condo and I would not recommend going alone on this purchase, find a realtor who really knows the market and complex to help ensure that you make a good decision and avoid many of the pitfalls of condos. Thanks again and stay tuned for upcoming surveys
Additional Reading/Resources:
https://www.fairviewlending.com/never-buy-a-residential-condo/
https://www.fairviewlending.com/the-war-on-landlords/
https://www.fairviewlending.com/house-prices-hit-another-record-should-you-even-care/
https://www.fairviewlending.com/root-cause-of-real-estate-price-declines/
https://www.fairviewlending.com/will-real-estate-fall-to-2020-values/
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Glen Weinberg personally writes these weekly real estate blogs based on his real estate experience as a lender and property owner. I’m not an armchair reporter/writer. We are an actual private lender, lending our own money. We service our own loans and own commercial and residential real estate throughout the country.
My day job is and continues to be private real estate lending/ hard money lending which enables me to have a unique perspective on the market. I don’t accept any paid sponsorships or ads on my blog to ensure accurate information. I’ve been writing this for almost 20 years and have over 30k subscribers. Please like and share my blogs on linkedin, twitter, facebook, and other social media and forward to your friends . I would greatly appreciate it.
Fairview is a hard money lender specializing in private money loans / non-bank real estate loans in Georgia, Colorado, and Florida. We are recognized in the industry as the leader in hard money lending/ Private Lending with no upfront fees or any other games. We fund our own loans and provide honest answers quickly. Learn more about Hard Money Lending through our free Hard Money Guide. To get started on a loan all we need is our simple one page application (no upfront fees or other games).
Written by Glen Weinberg, COO/ VP Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine, The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
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