Condominium Advantages and Disadvantages

Not interested in the SFR or Multi-Unit investment? Buying a Condo might be right up your alley. Basically, a Condo is an apartment like dwelling that you can own.


Advantages:
1) Very low maintenance requirements (the Homeowners Association [HOA] dues cover the majority of maintenance in the building).
2) Typically are less expensive making for a more attractive entry point for the first time investor.
3) Utility costs like water and gas are often included in the HOA dues.
4) Can have comparable market appreciation in a seller's market.
5) Views are more likely due to multiple floors (penthouse for example), thus adding value and appeal.
6) Smaller square footage available. This may appeal to elderly tenants who want to keep the amount of house they have to clean to a minimum.
7) Some Condo buildings offer concierge services comparable to some fancy hotels.

Disadvantages:
1) People do relate Condos to apartments thus reducing their appeal to many.
2) HOA dues can be very expensive. This adds to the investor's overhead.
3) The square footage is typically on the low side when compared to a home. Large families do not favor Condos over the SFR. This reduces the marketability of your investment.
4) Parking is limited. A Condo is likely to have Tandem parking due to space constraints. This can be a major inconvenience when you have to move your car so the other vehicle can get out.
5) Privacy can be a big issue. Since you share walls with your fellow Condo owners, you will hear the sounds of daily living coming through the walls. Homes (SFR's) offer much more privacy
6) Neighborhood congestion is more prevalent in condominium communities. The density of units in the neighborhood can sometimes make it impossible for friends and family to find a parking spot on the street. There is also data that suggest that there is an inverse relationship between population density and crime. The more dense an area, the greater the crime rate.

Weigh out the Pros and Cons and decide for yourself if the Condo investment is for you. In my opinion, the SFR is the better investment.