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Although it used to be considered true that condos were a risky investment, this is not necessarily the case any longer. I have invested in 5 condo properties in all, and have made a good profit from two quite different categories of condo ownership.

The first was an office condo, which was still a very unusual concept at the time that I first invested in it. It was so unusual, in fact, I had to contact over 200 lending agencies before I was able to refinance the original loan which had been set at a very high interest rate by the developer. Nevertheless, this property had an ideal location and served me excellently when I used it for my own business. Over the years, there were interesting problems, such as unexpected special assessments for things running from street lighting to legal fees for a multi-million dollar lawsuit against the developers. In the long run, I awoke one morning to learn that a property I bought for $80K was worth well over $200K. I immediately entered into a lease/purchase agreement with an eager tenant and changed from a happy property owner to an even happier lender by carrying back a loan for good tenants with a tried and true payment history.

More recently, I bought a condo to use for a vacation home which had been appraised at $200K when it was new. However, I bought it twelve years later as a bank foreclosure when it was at the bottom on the market. Somebody else lost big on that one! But by the time I closed escrow this property had appreciated in value about $15K and 7 years later with no expenditures for repairs and no assessments it was worth about $160K more than I paid for it. With 2 or 3 properties bring me returns like that, I could have quit my day job, if I hadn't liked it too much, that is.

Because all of the condos I have owned have had owner associations blessed with diligent and trustworthy directors, together we were able to weather all of the storms inherent in community ownership.
However, people interested in condo ownership have to realize that no matter what kind of property one owns there are owner responsibilities. If you have a single family home in the suburbs, you have to maintain the grounds, contract for sewer and other utilities-if you have a condo you have less direct maintenance, but you have to be more political. To protect the value of your property you might have to attend owner meetings, educate other owners of facts of mutual importance, or urge people to vote responsibly for or against assessments or changes in the CC&Rs. If you own a condo, you might not have to love your neighbors, but if you want to profit from your investment, you do have to cooperate with them on an ongoing basis.

However, once all is said and done, it has been my experience that both in terms of the enjoyment of the properties as an owner and in terms of profits realized from subsequent sales, condos can be well worth one's while. Through careful selection of the properties (location, location, and location!) and strict compliance with the adage "Buy Low and Sell High," I was able to earn a better return on my condos than on other properties I have yet bought and sold.

Learn more about this author, Janet Jenson.
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