Hi There,
Timeshare vs Condo
I am considering investing in real estate to use as a rental property. I have considered a timeshare but I would only own the week I purchase. My other thought was to purchase a condo onwhich I could use as a rental investment 52 weeks out of the year.
I’m not sure on how I should handle this.
Any help would be apprciated.
Howdy Wanda951:
Timeshare is not an investment IMHO it is a vacation one a year and expensive at that. A condo is a little better if you can find one that will appreciate and will not be an alligator. The HOA dues will eat up most cash flow. How about a 3 bedroom 2 bath 2 car garage house or even a duplex. I like duplexes for cash flow. I have seen a lot of new investors buy one and rent out one side and live almost free in the other. Nothing wrong with a start like that.
Wanda,
I concur with Ted. If you’re going to buy a timeshare, just set your money on fire instead, it will save you a bunch of time and aggrevation. The problem with condos is usually the Association fee. This can run several hundred dollars a month and can often be changed anytime the board so deems. If the board decides to do a major project, they often can raise the Association fees to cover it or even levy a special assessment to cover it, often witout the vote/permission of the Association’s body.
He also gives good advice about SFH or a duplex/tri-plex.
Keith
Why do I hear about so many people purchasing condos and using them for rental investments?
It must be feasible would it?
I didn’t say it wasn’t feasible. I said that you need to understand the Condo Fee.
You HAVE to do the math and figure out if the rental is feasible. If you’ve read my posts, you’ll know that this is a consistent message from me…do the math with ALL of the numbers. If it doesn’t cashflow, it’s not an investment, it’s a speculation…
You have to know:
A:
P/I = ?
Taxes = ?
Insurance = ?
Maintenance = ?
Management = ?
Vacany = ?
Any other (Condo Fees, HOA, etc.)= ?
B:
The amount of rent you can realistically receive = ?
Any other income from the property = ?
If the amount from A is greater than the amount in B, you have an aligator which will eat monthly from your wallet. If the Amount in B is greater than the amount in A, you have positive cashflow. I strive for AT LEAST $125 per month ($1500 per year) from each of my properties…
CASHFLOW IS KING!!!
Keith
I agree Ted and Keith!