You must have heard one of the elders you know saying never put all your eggs in one basket. It is a quite famous proverb that has been passed on for generations, and there is a good reason why. Diversifying your investments is always a smart move, no matter what you are investing in.
The same can be said when it comes to investing in real estate. Many people choose to invest only in single-family homes, but there are other options out there that can be just as lucrative – if not more so.One option you may consider is investing in a condo. But are condos a good investment? Let’s take a closer look.
What Is a Condo?
You can think of a condo as a type of housing that is like an apartment, but with some key differences. For one, when you purchase a condo, you actually own the unit. This means that you\’ll have a deed to the property, it\’s similar to purchasing any other type of home. With an apartment, on the other hand, you are simply renting the unit from the apartment complex.
Another difference between condos and apartments is that condos usually come with a lot of amenities. These can include swimming pools, gyms, laundry facilities, and more. A really important distinction between owning a condo as opposed to an apartment is that condos are usually part of a larger community. That means there will be rules and regulations you\’ll need to follow, which your condo associations will enforce.
For example, you might have to adhere to a certain dress code when using the community pool, or there might be restrictions on how loud you can play your music. It all just depends on the condo complex you live in.
Why do people invest in condos?
Now you know a little more about what condos but wondering, “is condo an asset“ at all? You still have to share ownership of the property with other people! Condos offer many potential benefits as an investment, even though you have to share ownership of the property with other people.
Here are just a few of the benefits:
1. They Can Be More Affordable Than Other Types of Properties
One of the biggest advantages of investing in a condo is that they can be more affordable than other types of properties, such as single-family homes. This is especially true if you are planning to buy a condo in some major city. The price per square foot is usually going to be lower than what you would find with a single-family home.
2. There Are Usually Less Maintenance Concerns
Another benefit of investing in a condo is that there are usually less maintenance concerns. This is because the complex will have someone on staff whose job it is to take care of all of the common areas, such as the swimming pool, gym, and laundry facilities. Obviously, you’ll have to take care of the unit you own, but that’s about it. No need to worry about the common areas.
3. Condos Usually Appreciate in Value
Seeing a hike in the value of a property is nothing new and condos are no exception. This means that if you purchase a condo today and sell it a few years down the road, you are likely to make a profit. Of course, there are risks and no one can guarantee that the value of the condo you purchased will increase or decrease. But, if you do your research and purchase in a desirable location, the chances are good that you will see an increase in value.
4. They Can Be Rented Out for Profit
Just like with any other type of property, you can rent out your condo to generate a steady sidde income. You can charge tenants a monthly fee to live in your condo, which can help offset the cost of your mortgage. Whatever the balance remains, it will become your passive income. However, you need to check with your complex first if there are any restrictions on renting out units.
5. Condos Offer a Sense of Community
Who does not want a sense of belongingness and community? Condos offer just that. Purchasing a condo means you will be living close to your neighbors and forming long-lasting friendships. It is easier to create a sense of community in condos than in other places because people are more open to socializing in this environment.
6. They Can Be a Vacation Home
Imagine having a vacation home that you can use whenever you want to get away for a few days. And, when you\’re not using it,simply rent it out and generate some extra income. Investing in a condo is a great way to make this happen. Not only will you have a place to stay whenever you need a break from everyday life, but you\’ll also be able to make money while you\’re not even there. Talk about a win-win!
7. There Are Often Amenities Available
As we mentioned earlier, one of the main differences between condos and other types of properties is that they often come with a lot of amenities. These can include swimming pools, gyms, laundry facilities, and more. These increase the desirability of the complex, which can lead to higher rental rates and resale value.
8. They Can Be Located in Desirable Areas
When it comes to owning properties, location is everything. And, mostly condos are located in some of the most prime and desirable areas. For instance, you can find condos near the beach, golf courses, ski resorts, and other popular tourist destinations. If you purchase a condo in one of these locations, you will have no trouble finding tenants or buyers when it comes time to sell.
Purchasing a condo can be a great investment. They are often more affordable than other types of properties, appreciate in value over time, and can be rented out for profit. You should, however, do your research to make sure you are getting what you expect.