Anonymous wrote:

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

I am not the PP you are addressing but yes, the 2 BR is always the better deal if you are looking at for rental potential. I was told this by every real estate agent. I think if you can get a 1BR super cheap and the bulk of the rent was going to be profit to you, then your good but 1BR are just a harder rental/re-sale market. I think exceptions might be in areas veyr close to Metros but I even recieved the adivce to purchase a 2BR when I was looking at places in Ballston and Claredon.

I am the PP who said you should look for a 2 BR or even better a 3 BR. I say that because you will have an increased market of people who want to either rent or buy when you want to sell. In general, there are always more people looking for multiple bedrooms than one bedroom, families, roommates, people who want space for overnight guests, office space, plenty of reasons. Why limit yourself? Go for as much space as you can afford.

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? 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.

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

I am not the PP you are addressing but yes, the 2 BR is always the better deal if you are looking at for rental potential. I was told this by every real estate agent. I think if you can get a 1BR super cheap and the bulk of the rent was going to be profit to you, then your good but 1BR are just a harder rental/re-sale market. I think exceptions might be in areas veyr close to Metros but I even recieved the adivce to purchase a 2BR when I was looking at places in Ballston and Claredon.

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.

Yes, they can. It is extremely common.

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.

Laws may vary by state, but where I'm from they absolutely can.

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.

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

What is the potential for apprecition? What is the $140k price in relation to what it was worth in the past? If you do buy, I would recommend not buying a one BR

Anonymous wrote:Could pay cash. If there was a mortgage involved 25% down, it would be another $500 or so a month out. Say $1000 out; $1,500 in. Meaning $6000 p.a. return on $35K investment, or 17%. Sounds pretty attractive to me. Which begs the question, why isn't everyone doing it, thus driving the prices up.

Don't forget there are others costs. Maintenance, repairs, renters who might not paid, and taxes on your earnings. But, yes it can be a good investment.

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.

Could pay cash. If there was a mortgage involved 25% down, it would be another $500 or so a month out. Say $1000 out; $1,500 in. Meaning $6000 p.a. return on $35K investment, or 17%. Sounds pretty attractive to me. Which begs the question, why isn't everyone doing it, thus driving the prices up.

I don't know, you don't mention monthly mortgage payment. Dis you just pay cash?

I always look at my rental condos on a monthly basis, ie, rent 2100, mortgage and taxes 1250, condo fee 250. Making 600/month.

OP here. Thanks for the clarification. By can someone explain the economics of this, I mean the relationship between rent, outgoings and purchase price in these instances.

p.a. = per annum

What's pa?

Looking at the cheap end of the condo market. Taxes plus HOA fees would be less than half the cost of rent in some areas. Eg. $140k for 1br condo. HOA + taxes 4k p.a. Rental potential 18k p.a. Gives you a gross return of 10% p.a. Can someone explain the economics of this.