Explain this - price of condos

[Anonymous]

Anonymous wrote: As an owner of investment properties I have never remotely been interested in buying a condo, I started out with townhouses and moved into Single family homes when I could afford it.

Others say that only condos do cash-flow. In other words, you cannot rent out an $ 800k SFH for 2x the rent for two $ 400k condos.

[Anonymous]

Anonymous wrote:
You also asked why everyone was not doing this and I understood your question as to be asking why everyone who had 140K in a savings account would not buy a condo outright to rent because of the positive cash flow. Well there's liquidity for one. Another reason is leverage. Why not put $140k down on a SFH in a good area that is appreciating?

I'm not the PP you quoted, but I think she asked why don't more people invest in rental property, not why don't people buy properties outright instead of with a mortgage. I think the answer has to do also with the hassle of finding and dealing with tenants, managing the repairs, paperwork, etc.

[Anonymous]

I only buy and rent condos. I make friends with the maintenance people. It's turn key. Too busy to deal with single family homes and maintenance. Plus you can get higher rent with condos for your money. Way more.

I always thought the only people who rented sfh were people who couldn't sell and rented by default.

Maybe the sfh poster lives outside DC. In DC a sfh is like 840k for a cheap one.

[Anonymous]

Anonymous wrote:I only buy and rent condos. I make friends with the maintenance people. It's turn key. Too busy to deal with single family homes and maintenance. Plus you can get higher rent with condos for your money. Way more.

I always thought the only people who rented sfh were people who couldn't sell and rented by default.

Maybe the sfh poster lives outside DC. In DC a sfh is like 840k for a cheap one.

Nope, all in the DC area, and all very expensive SFH. All purchased as rentals, not rented by default. Making plenty of money on them. Condo's we have never considered. If it works for you, great.

[Anonymous]

In the end a percentage point return is a percentage point return. If I could make 10% p.a. in rental return I would be happy so long as my capital value wasn't decreasing. But frankly it's hard to imagine how the values of these places could fall further unless the bottom fell out of the rental market. Or am I missing something?

[Anonymous]

Yes, you are missing the ton of work needed to manage the rental properties versus just investing in the stock market or municipal bonds. For many people time is money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Some condo HOAs don't allow rentals, or otherwise restrict them.

The reason why is, if a condo has more than a certain percentage of renters, future buyers won't be able to get a mortgage. Not being able to get a mortgage on a condo in the building would drastically reduce the pool of future buyers, and crash the prices.

A condo association cannot disallow an owner from renting property they own.

It is true that mortgage lenders do look at the % of investor owners in a building.

In the condo we own in NYC it does.

[Anonymous]

Anonymous wrote:PP, prices are about 40% below bubble highs. You would recommend not buying 1BR, but rather 2BR?

Addressing the first part of this question- my SFHs are not 40% below what comps were going for at the height of the market. When they were at the lowest value, a couple of yrs ago they were about 10% below the value at the height of the market. Now they are close to the height and there is very little for sale in my very sought after neighborhoods. Can you say that about the condo? How about the competition in the rental market? You don't want something that will take months to rent. Also is it a landlord favorable jurisdiction? Is it going to take you 6 months plus to get a non paying tenant out of your property? If the answers to these 3 questions are yes, go for it. I favor SFHs and always will now that I can afford them. Like I said earlier I had to start with THs and it was a very long hard road. Just reading the messages on this site can give you a lot of insight on what people want. People complaining about neighbors, noise, smoke, pets, parking, crime. If you are an owner of a condo and your tenant tells you they are moving out because the people upstairs make too much noise or they don't like the cooking smells on the floor, can you fix that? Get yourself a couple of good real estate investing books and read them. Sure a condo is a place to start investing, but if you have a large amount of cash you might want expand what you are looking at.