Pro’s of Investing in a Condominium

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Condominiums are the epitome of modern living. It has many perks that include modern facilities and amenities, great views, security, and some privacy. But if you are looking to buy a condo as an investment, you must consider the potential gains that you can get. 

 

Below are some of the reasons why investing in a condo would be a profitable choice: 

Market Value

The main criterion in determining that you are making a good investment is the property’s market value. Thus, if it’s market value is higher than the purchase price, you are in good hands. This remains applicable and true when it comes to condo investments. 

 

There is a higher appreciation rate for condo units. You should expect that its value grows from the moment you purchase it. It gives you plenty of opportunities to reap the benefits of your investment. You can opt to rent it out so you can have a sustainable source of monthly income from the rental. 

 

Also, you can choose to resell it later. The longer you hold on to your property, the higher its appreciation value. This will enable your money (investment) to multiply without working too hard. 

Profitability

Condos are easy to rent out. A lot of people who opt to live in cities would prefer to rent a condo unit because of its facilities and amenities. If you choose a condo that is within a prime location (such as within the business district or city center), the demand for your condo rental will grow even more. Therefore, it is important to consider the location of a condo unit by the time of your purchase. 

 

The initial investment required for a condominium can be easily afforded by potential investors. This makes it a better investment because the cost of acquisition is lower than the potential resale value. There are many condo developments that are in a pre-selling stage that offers lower prices. Make sure you take advantage of them if you have decided on investing in a condo.

Maintenance 

It is easier to maintain a condominium because there is your utility staff whose primary role is to help with the upkeep and maintenance. You can also rent out your condominium for business use. Who says that condominiums are only suitable for residential use? The ability to rent out your condo for commercial use will help expand the potential income of your investment. 

 

Investing in condominium units offer better liquidity as an investment (compared to apartment buildings). You can easily sell the unit when you want to (whereas it would be more difficult to find a buyer for an apartment building). 

 

If you would like to pursue the idea of buying a condo as your next investment, you need to see this. It is not just a matter of investing in a condo, but where you choose to invest in that truly matters. 

Con’s of Investing in a Condo

There are a few things you need to know about before investing in a condo unit. These are risk factors that you must be prepared for so that you can mitigate the risks:

Restrictions 

Depending on which condo you invest in, there might be certain restrictions. The homeowner’s association within a condominium building might impose a lot of rules and regulations for owners to live by. They might even put restrictions on when, how, and to whom you may rent out your condominium unit. Make sure you check out the rules in your specific condo before you pursue the investment.

Monthly Fees

The monthly fees on the homeowner’s association and any other maintenance fees can potentially lower your return of investment. Make sure you choose a condo that is centrally located so you can keep the rental prices up. This is how you can optimize the return of investment so you can cover other maintenance fees. 

Pro’s of Investing in an Apartment

Aside from a condo, an apartment is another good real estate investment. Learn about the advantages of this type of investment: 

Level of Demand

The level of demand for apartment rentals is steadily high, especially among families looking to rent a single-family home. It is a good investment because you can expect a low vacancy rate (especially if your apartment is in a central location).

Cost

The cost of maintenance in an apartment is considerably low. There is also no need to pay any monthly fees because you own the entire apartment building (whereas condos have multiple owners). 

Con’s of Investing in an Apartment

While there are many benefits to investing in an apartment, there are potential downsides. Here are some of them: 

Ownership Expenses

The cost of ownership for an apartment building is substantially higher than other real estate investments (such as condominium). Depending on where you live, not all individual investors can afford to purchase the apartment building. This puts a limit on your buying market for that property. 

Rental Income

It puts all of your income potential solely reliant on the rental income. It is, therefore, important to attract renters and lower the vacancy rate if you want to maintain you’re your profit. In this regard, it makes maintenance of an apartment building entail more work. You need to address the needs of your existing tenants to keep them happy. Otherwise, you could lose tenants if they are unsatisfied with the quality of living in your apartment. 

The Bottom Line

There are certain benefits and drawbacks with each option – condo or apartment as an investment. Use the information above so you can weigh the pros and cons of each option. In the end, your investment goals and strategy are different. 

 

If you want to make money through the rental income, then both condos and apartments are a suitable choice. But when it comes to the resale value, condos might have an edge as it is easier to liquidate than apartments. Either way, you need to match these investments with your long-term goals so you can make the right choice. 

 

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