Condominiums are an attractive real estate option, and if buyers do their preliminary analysis prior to investing, they can appropriately manage maintenance and other costs and reap the rewards of such an investment.
When looking condo buyers, they tend to be either young professionals looking for a cheaper entry point into the real estate market, retirees looking at downsizing their home, and established investors with the plan to rent and make a profit. Whether you’re either of these three buyers or an outlier, investing in a condo rather than buying a house in this hot market could be a great idea, here’s why.
Costs to consider before investing
Deciding whether or not to invest in a condo shouldn’t be made solely based on your assumed income from the investment. Be sure to do the math prior to committing. Some calculations to consider include:
- Annual rent you may receive
- Annual expenses you will incur, including real estate taxes, insurance, and maintenance and repairs
- Occasional expenses such as legal fees if an eviction is required, advertising costs to get tenants, and repair costs if a tenant damages the property
Deciding between buying a house or a condo
One of the big questions you’ll ask yourself when buying a new home is if you want to go with a house or a condo. Once again, costs should play a big factor along with various others when making this decision. Carrying costs are one thing, as they’ll typically be higher for houses when you look at utilities and major capital expenses such as the roof and furnace. Compared to a condo, where condo fees will remain the same month to month and unexpected costs won’t impact your budgeting.
Insurance coverage is also a concerning cost, as it varies depending on the type of home you buy. Detached homes, for example, face a higher insurance rate due to greater weather-related risks compared to condos. The good news about a condo is that your flooding and fire damage is most likely covered by your fees, so you’ll only need coverage for your contents.
Assessing the condo before you commit
Looking past the costs and towards the future, assessing the condo itself and what you think the investment can bring to you going forward can also help you determine whether or not you want to purchase the property for sale.
- Is rental property in demand where the condo you’re investing in is located?
- Could a new condo development be built nearby and create a more competitive environment?
- Is the area getting less or more popular?
- Could a major employer in the area close down and cause a decline in rental demand?
Although there’s lots to consider when investing in a condo, connecting with real estate agents with knowledge and experience in the market can help make the process an easy one. Team Davids offers all that and more, specifically when looking at houses for sale in Niagara Falls. Whether you’re buying a house or a condo, connect with us and we’ll help you find your dream home.