Real estate is a business that has great money making opportunities. One of the most attractive types of real estate investing are condos, but they too have their own good and bad sides. In this article, we will go over the pros and cons of investing in condos.
Contents
Pros
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1. They cost less than other property
The first obvious problem one faces when buying a property is the overall price of such places. This is especially important for beginners. With a limited budget, you can only look for real estate that is affordable to you at that point in time. You should never invest in something you cannot afford to pay and cover. Condos are perfect if we consider all of this, as they are much less expensive than houses or business space for example. You will also rent a condo easier than anything else, especially in a city like Toronto. Visit this site for more about this.
2. Passive investments
People often stay clear from real estate thinking it requires a full-time job approach. It is not easy being a landlord as there are many different people out there. With this in mind, condos are the easiest way of renting real estate, and this kind of work is accessible to first-timers and those with other full-time jobs. Most condo owners do not have to worry about costs covering mowing, curb appeal, pools, painting the outside of the building, common areas, and so on. These are covered by services and paid by the tenants of the building. Therefore, condos are a great passive investment as you do not have to do much.
3. High demand
When starting a business, you must think about how many people want your service. With condos, it is easy because the demand is always high, especially in bigger cities. In addition, the higher the demand goes, the higher you can charge per month, resulting in more profit and more real estate. College students, workers, and young families constantly look for affordable housing, meaning it is a gold mine. Lastly, the better your location, the higher the demand!
Cons
Source: Mashvisor
1. Restrictions
Since they rely so much on amenities, some have strict rules and restrictions in place. Often, a building does not allow renting, while others have special rules for renting. Because of this, it is crucial that you check potential rules the building has, or will have, before purchasing a condo.
2. Investment return may be limited
Investing in real estate is done to make money, and because of this, considering everything is necessary. Condos generate lower return income on average than houses and workspace. Still, they cost less, so this is still good. Next, you should always include the bills and fees into the rent, so that you get pure profit from your tenant without any money lost. When or if you decide to sell the condo, a problem you will face is that the value does not hold, and you will not get nearly as much as you paid for it.
As you can see, there are generally more pros than cons, and we recommend starting with a condo if you want a career in real estate. It is important to plan for everything and consider all of the factors before making a major decision in such a line of business.
