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| No | 50% | 166 votes | Total: 330 votes | |
| Yes | 50% | 164 votes |
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Add to FavoritesI feel condominiums can and are good places to live, however I do not feel in general they are the best investment one can make regarding real estate. I have lived in a condominium for over 12 years and am not an old person, nor do I sit around all day being negative (as I see one of the authors here feels most condo owners and dwellers are). Even people in town homes and single-family homes can do that. Hey life is what you make it no matter where you choose to live.
Most people choose to buy a condominium because they are more affordable than single family homes. Some people do not want nor need a single family home, nor do they want to purchase rental property and be a landlord, for various reasons. Also the property taxes on many condos can be less expensive than those of a single family home. IF they are well managed and have an attentive, knowledgeable, caring board or association, they are wonderful places to live. I have found that there are many poor conversions (apartment buildings converted to condominiums) and newer developments with many problems such as owners of new developments not willing or refusing to turn control of buildings and associations over to the condo associations, board members stealing from reserve accounts, laundry proceeds etc! Often monthly assessments are not paid by some or many owners in a complex, fines nor fees are not paid!
There may be a high rate of renting in a building or a group of condo buildings! The main reason people cannot afford a single family home is that they cannot afford the down payment, high property taxes, upkeep, etc, of a single family home and a condo or town home it seems to me are the best choices for young, middle aged and older people these days.
Renters often have less respect and concern for their own and other people's property and can be rowdy, doing damage to a building and illegally subletting a unit, changing the locks without presumption or notification to the owner, sell and or use drugs from a unit. There will always be good and bad owners and renters and in my personal experience of 16 years in a condo, many renters do not care what goes on around them, thinking that they can leave when trouble happens and can up and leave when they want to, rather than addressing the problems faced by other inhabitants.
Often the lawns, gardens, interiors and exteriors of condos and not well maintained (known as common areas) and there is poor communication between owners, renters, management and board members making the accommodation not very nice places to live. Poorly maintained units with fire risks and leaks go unreported, undealt with and I personally live in an area with many high ride condo buildings and these are only a few of the problems which are known with this kind of dwelling.There are some great buildings though often the management is more loyal to their board than they are to people who live in the condos. There are a glut of condos on the market and it can be difficult to sell a condo, more so than to sell a single family home. Some can be good investments, though in general for the reasons already stated condos are not the best investment that a person can make. They are a good alternative to those people who cannot or does not want to own an apartment or a home but wants, none the less, to become a property owner. It is wise to check out the area, and to talk with tenants to establish whether a condo is a good investment, using common sense to guide you and research of the area in question which will help you to make a wise decision.
Learn more about this author, Lester Nixon.
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Yes
Investing in a condominium can be a wonderful investment opportunity for the right person with the right goals at the right time. Why so many qualifications to the response, you might ask? The answer lies in the fact that any investment has potential risk and potential reward, and it is up to each individual to determine the financial vehicle that will carry their capital into the future. Are you a person that tolerates risk well? How much money are you planning to place in this opportunity? What is your exit strategy and time line? Once these questions are answered there will be a lot of people standing on the sidelines who are not comfortable investing in a condo. However, there will be a certain number of people for whom investing in a condo is an amazing way to increase their net worth and further secure their future financial security.
Are you a person that tolerates risk well? Realizing your ability to tolerate risk is the first step in determining if a condo investment makes sense. The last two years have been a horrifying experience for real estate investors and more people now than ever before will be willing to tell you that any real estate investment is a terrible idea. However, considering that prices of real estate have sunk so far in the last two years, it is an interesting point in time to explore the idea that the market wont support lower home prices. It is true that many people have gone from positive net worth to negative net worth in a flash. All of these factors combined means that you have to know yourself, and know if you are willing to take a chance in the condo market.
How much money are you planning to place in this opportunity? Higher end condos may be entirely different investment opportunities than lower end condos depending on each unique market. Your capital on hand or the availability of financing will give you a better idea if a condo investment is right for you. Real estate agents will frequently tell their clients that each neighborhood is different, and in this case they can be trusted. Knowing your limits is a great place to start towards finding a profitable opportunity.
What is your exit strategy and time line? Five years ago, the condo market and real estate market in general was saturated with people flipping homes, which means that they would buy them just to make minor improvements and put them back on the market immediately for a profit. It is doubtful that the United States will see those types of investments in the near future for a variety of reasons. In the short term, people looking to acquire a condo as an investment must realize that it will be a long term commitment to see equity gains. If you have the stomach to wait for a long period of time for your investment to bear fruit, then right now might be a good time to seek out a condo. However, if you are looking for short term gains then the condo market is sure to disappoint.
Can a condo be a good investment opportunity? Absolutely! However, not everyone is right for this type of approach to securing a solid financial foundation. You need to have sufficient capital, have high tolerance for risk with your investments, and understand that this is not the same get rich quick scheme of the early part of the decade. If you meet these guidelines, make sure that you take your time with research and overall due diligence. In the long run, a condo investment can result in positive cash flow and an increased net worth for the right investor.
Learn more about this author, Charles Merrifield.
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