Over the recent years, condo housing fashion has relevantly taken place in the global real estate market and is one of the most popular housing preferences of today's generation. Before getting to the question of are condos a good investment, let us first examine what it actually is:
A condo, which is officially known as a condominium, is a private space for residence which is usually rented out to tenants who are in search of housing facilities. Typically, a condo is located in a residential building which is a private unit owned by an individual who later on becomes the landlord of the particular property. In discussions concerning the condo owner, he/she enjoys all the rights of the property over the tenants, which in a way makes the process of renting a condo a far more one to one deal in comparison to renting apartments.
In order to assess condos as a prospect of a good or bad investment, it is important to know about the advantages and disadvantages of it. Although this form of housing is quite popular and has extensive benefits, it is important to assess both sides of the coin before making an investment. This is why we are highlighting both the pros and cons of a condo investment below:
Condos are considered to be a more cost effective housing solution when compared to single family homes. According to a report by the National Association of Realtors, the average price of a single family home in 2021 is $347,400, while the average price of a condo is $300,400 in the same year.
As condos include a communal structure of living, it is natural for it to have a variety of common-use amenities, which might include a swimming pool, gym, barbeque spot, cultural clubhouse etc. These community owned amenities make a condo life more accessible and better.
As condo living includes an HOA community, there is no personal requirement of any repair or maintenance cost as the owner is not responsible for such activities. The community takes care of the overall maintenance and repair services.
These relative advantages of owning a condo gives a just solution to the question of are condos a good investment. However, before buying, you should also assess the disadvantages associated with condo ownership to better understand whether to go for the deal or not.
Based upon which location you choose, the condo association fees can be relatively high, ranging from a few hundred dollars to a thousand and sometimes even more. Having a high monthly condo association fees initially increases your payment value, leading to cutting down of overall returns.
Condo ownership is often a subject of critical association restrictions, most commonly associated with rentals. It is important to note that not every condo community allows you to put your condo for rent for a short term. Apart from that, there are other restrictions pertaining to the number and type of alterations you can make, number of pets you can keep, frequency of guests etc.
Generally, getting approved for financing of a condo is difficult. In addition, condo mortgage rates are higher in comparison to other forms of housing like single family homes.
While the pros of condo ownership are lucrative in nature, the disadvantages contradict them at the same time and pose a challenge to the question of are condos a good investment. In that case, what should you know? Here it is:
It is an inevitable fact that properties will appreciate faster in value if they are centrally located. However, the current real estate trend hint that single family homes have a faster appreciation value than condos. Here is where other factors come into play like hassle-free property maintenance, community facilities and walkability advantage which can make a condo appreciate in a rapid rate. You can check the Scugog Real Estate Listings.
In general terms, condos are cheaper alternatives than single-family homes. But the question is, are condos a good investment as rental properties? The simple answer to this question is highly dependent on the HOA rules for renting individual condo units. As has been mentioned above, not all condo associations allow renting, especially in shorter terms. This is why before planning to buy a condo for the sole purpose of renting it, having a clear insight about regulations of your chosen association is important. If the one you are considering to buy allows free-hold renting, then the answer to the question of are condos a good investment for rental properties is a big yes.
Are condos a good investment for 2022? The fact is, there is no concrete answer to this question as it is completely based on personal accessibility and preference. You must consider the above-mentioned information to make a clear decision on are condos a good investment and whether you should think of putting your money in it. Besides the information provided above, make sure to pay close attention to recent market news and trends, which will make your investment even more secure.