Many first time investors are considering condo investing. According to them, condos are the easiest to maintain among all types of real estate properties. Maintenance is governed by the homeowners’ association (HOA), the cost of which can be added to your monthly payment. HOA’s have a fixed amount so you as the investor don’t have to worry about any increase on this fee.
To ensure you succeed with your condo investing, here are 4 essential aspects that you need to keep in mind.
- Your target market determines the condo’s location and size.
To help you find the most suitable location and size for your condo investment, you first have to determine your specific target market. To whom would you prefer to rent your condo unit? Are you looking for long-term tenants like young professionals, families, or retiring couples, or do you want to rent it to short term vacationers or tourists?
Both types of tenants require different locations and/or size of a condo. For long-term tenants, you need an average-sized condo unit that is located in a safe and secure neighborhood and near to public transportation and employment including commercial businesses and industrial corporations.
Short term tenants, however, require a large spacious condo unit with lots of sleeping area. If possible, furnish the condo unit with lots of sofa beds, beds, and sleeping mats as these are what vacationers will mostly need. Keep in mind that they want to rent your condo so they have somewhere comfortable and safe to sleep and rest for the night after a long day of touring and sightseeing.
- Rent should be more than your monthly expenses.
Profiting from condo investing relies on how you calculate the monthly rent that your tenants pay. Of course, it should be more than your monthly expenses so make sure you include every fee that you are required to pay for every month or year and include these when calculating the rent. Among the primary expenses that you need to include in your calculation are the HOA dues, additional maintenance fees, mortgage payment, and annual taxes. It also helps to consider the financial condition of your target market and ensure that the rent will not be too high for them. Also, compare your rent with your competition and make sure your rent fee is on the same level as theirs.
- Hiring a screening company to help you get tenants will benefit your condo investing greatly.
Although this may not seem as a priority expense and it may not bring you immediate benefits, hiring a screening company greatly helps to ensure that you get quality tenants, those who pay on time and are not destructive. This is most especially helpful if you are looking for long-term renters. You want those who are looking for a permanent home near their place of work as well as those who have a stable employment. If you fail to screen your tenants properly, you may end up with tenants who will give you a lot of headaches and cause to pay for a lot of repairs in the condo unit.
- A management company will help you look after your condo when you live far away from the unit.
If you have your eye on a condo unit that is far from your permanent residence, you can consider hiring a management company to look after the condo unit. There are lots of service companies that provide this service along with marketing your condo unit in the neighborhood, ensuring the unit is clean when renters first arrive, checking the unit for any damage before the renters check out. This is most especially helpful when considering short-term renters.
Call Jerry Pinkas Real Estate Experts for more information on successful condo investing.
Jerry Pinkas Real Estate Experts
604 N. 27th Ave
Myrtle Beach, SC 29577
Your partners in successful and highly profitable condo investing!