Individuals who are looking for alternative ways to invest without homeowner responsibilities such as maintenance and renovation would truly benefit from condo investing. Buying a condo unit and renting it out is a lot different from buying and renting a single-family home.
If you feel that this is the type of investment that would suit your needs and demands, here are the top three things you need to carefully look at for your first condo investing venture.
Overall condo unit inspection
Much like buying a home, you will need to conduct a thorough inspection of the condo unit before you decide that you really want to purchase it. Although you can do the inspection on your own, it’s best that you hire a professional inspector to ensure that every area and corner of the unit is inspected. Plus, a professional inspector knows the signs of damage and wear and tear that may not be easily obvious to you. Listing all the areas and things that need repair may help you get a better deal from the seller. You can use it to propose a discount on the total purchase price or demand the seller to do the necessary repairs before you pay the full purchase amount.
All financial statements
To ensure that you are taking the right route with condo investing, you need to carefully study the financial statements of the unit you are considering buying. Basically, you’ll need to look at the expenses that you will be paying for at the beginning of your investment – which includes buying the condo and any other renovation or upgrades that it needs – and throughout your investment, which includes ongoing maintenance costs and monthly association fees.
You may also want to look into the condo association’s reserve funds and find out whether or not there is enough to cover any unscheduled or emergency repairs. If not, you will have to pay for these from your own pocket, which may negatively affect your profits.
When studying monthly association fees, make sure you consider the unit’s percentage interest and calculate whether or not you’d still make profit if you plan to rent the unit. If possible, work with a certified accountant to be sure that you won’t miss any important financial detail.
What you need to specifically review in the condo unit’s legal documents are the exact dimensions of the condo unit that you will be purchasing, the building features and amenities that you are entitled to exclusively use (i.e. balcony, parking space, etc.) as well as those that you can use along with other condo building owners (i.e. gym, spa, entertainment room, conference areas, etc.)
To find out more about condo investing, contact Jerry Pinkas Real Estate Experts now.
Jerry Pinkas Real Estate Experts
604 N. 27th Ave
Myrtle Beach, SC 29577
Helping you ensure a profitable condo investing.