I am looking into buying a condo near a community college. My thought is to use it as a rental property but I am not sure if this is a good idea. Condo’s are very inexpensive, but it seems like it might be hard to sell later down the road. Any suggestions or personal experiences would be appreciated.
It’s all about the numbers. What is the purchase price? What are the market rents in the area for similar sized condos? If you don’t know the market rents check your local newspaper.
I am investigating it more, but I believe the rental rates are about $600 per month in the area. The asking price is 32k for a redone 1 bed, 1 bath. I am also inquiring as to whether there are HOA dues…because that would definitely blow the deal.
…as would a convenant limiting the number of rental units in the development. Many condo associations have this clause!
Keith
There are most certainly HOA fees, usually $100-300 a month and include certain things like snow/trash removal and sometimes things like heat and hot water.
The cutoff is often 70% owner occ or more, any less than that it might be hard for new buyers to obtain financing.
Thanks for your replies! This will definitely help my thought process out.
When you get firmer info such as what the HOA fees are, what it includes, etc post back and we can help you further.
Just found out the HOA fees are $144 per month. The yearly taxes are $824. What do you think now? Looks like my cashflow is gone :flush
the condo fee usually end up being a real deal killer becuase your repair operating expenses will not be lowered by enough (if any) to off set it.
worse, is the fee can jump at any moment if the board decide they need to raise some cash.
Like when the roof needs repair, etc.