The question stems from some markets being difficult to access because of capital constraints. Would it be wise to target desirable markets even if it means buying a condo? Or target a cheaper tertiary area and buy a townhome or a sfh
What are some considerations with buying a condo?
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Personally, I would never buy a condo as an investment. There is no way to guage the future supply of condos. Sure, your condo could be in a great spot, but 5 years from now, two more buildings are built right next to you. Supply doubles and now your unit is the oldest of the three buildings available. No thanks.
New construction lifts the prices of nearby older assets.
Townhouse or single family all the way! I owned a few condos and it was a nightmare.
For most recent example there is a pending law suit in FL because a condo management firm tried to force the owners into an $80 million special assessment. HOWEVER, the owners found out that the the $80m reserve study and a renovation quote were provided by a brother-in-law of the condo management company owner. Subsequent quotes from other firms came back around $40 million. This type of fraud happens all the time with condo associations and more frequently with smaller amounts in the budget that no ones questions e.g. kickbacks on landscaping contracts, mother-in-law accounting services, you name it..
The condo associate is usually ran by management companies that do not care with zero audits or oversight. In turn significant yearly budget increases and/or special assessment occur ( which if you do not pay, results in a lien + attorney fees 2 or 3 times multiple ). Imagine this, 25% of condo owners in distress - what happens to the condo association budget and required reserves? Insurance, water, common area maintenance and other expenses are re-distributed to the owners who actually do pay (and it's the money those owners never see back) while the management companies charge absurd amounts of money for accounting, construction oversight, the junk-fees list is infinite...
Read the condo association by-laws and condo management contract. It's PRO condo management company while the owners have limited to no rights. You have to sue a management company to get anywhere ( I've done it twice and won both time but lost the money due to lawyer fees, not worth it )
To me: although less capital intensive to purchase, owning a condo is quintessential with (1) constant headache and (2) less capital growth rate than a townhouse or single family
>quintessential
That's not how you use that word, quintessential means "a prime example of", not "synonymous".
thanks for that, I am forever in your debt
Are you the jerkoff who went into my post history and hit me with 12 MS?
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