Investing in a condo can yield stellar returns if done right. As with any investment, various factors influence your particular outcome. The location and market conditions in your area are some of the top determinants. But overall, condos are beginner-friendly for new real estate investors. That’s because:
- You are typically buying new, so less repairs.
- You pay condo fees, so you’re not responsible for maintenance and upkeep.
- Urbanization is increasing, which means condos are in high demand.
- Smaller spaces are becoming much more accepted in the renter community.
- Condos typically offer a range of amenities that attract renters — pool, gym, spa, etc.
- You’re more liquid because resale demand for condos is high, which gives investors good exit strategy if they need to sell.
- Condos are typically cheaper than single-family homes, so barrier to entry is lower.
- New development condos typically have a generous deposit structure, so you don’t need to put down 20% immediately.
- Your interests are looked after by the elected condo board, who help guide the day-to-day management of your building.
For investors looking for an entry-level investment, or more experienced
investors looking to take advantage of demographic changes, condos are a great investment. Condo investing comes with some advantages over single-family homes. These make them ideal for savvy investors seeking a higher rate of return and an easy time managing their properties.
Some of these advantages include:
- Renters have a shared sense of community
- The purchase price is lower than for single family homes
- Equity and tax advantages – no transfer tax on a brand new condo
- You can fetch a premium monthly rental for your new condo unit
- Renting out your condo is cheaper due to shared building maintenance costs
- The rules governing condos benefit landlords and limit tenant bad behavior
- Homeowner rules and property management services also make managing condo properties easier for investors