The pertinent question on the minds of many people looking forward to investing in a condo unit is whether such is a sound investment decision. Well, it is if you have information such as you will read here. Like any other investment, never delve blindly into condo buying.
Here is how you should do it:
The location of the condo will determine whether it will sell at a good price in future, or not. That is why you need to do your research carefully. If you want a condo that you can rent out to make some money in future, buy a beachfront one.
Such is always going to have a tenant in summer. You may also consider buying a condo in a location that has development projects coming up in the future. A condo near a college is good as there will always be demands for it. If the condo block is located near, but outside a thriving urban center, buy it.
Look for financing
Unless you have the money and you are paying cash for the whole amount, you will need to look for mortgage financing, same as you would for a regular home. In fact, it is recommended that you get a preapproval first before you start looking at available condos.
Dedicate enough time to look for financing because most traditional mortgage lenders have no loan products that are designed for condos. You can also check out loans from the FHA- Federal Housing Administration. Note that the condo that you want to buy should be on their approved list. One of the requirements is that at least 80 percent of the condo units in that community are occupied by their owners.
Do your math correctly
If you are buying a condo to rent it out and make money, well, you need to know that it is a good investment. For example, if you buy a condo unit for $75,000 and the maximum rent that you can get from the condo is $450, the math does not sound so appealing. However, if you buy a condo for $60,000 and you can rent it out for $700, that is more appealing.
You must also consider the property taxes, the months that the condo may not have a tenant, advertising costs and so on. When you do the math and you get an annual yield of about 8% on the $75000, that is not too bad. You can live with that. Do the math before buying.
Find options that suit your needs
Just because a condo community has a swimming pool, recreational courts, gym and other amenities, it does not mean that you will need them. For example, if you are a senior, in your 70s, the main things you want are security and the grounds and exterior maintenance.
You can ask a real estate agent whether it is possible to find a condo that meets your needs so that you do not have to pay too high fees and not get to use the amenities.
Get help from a real estate agent
No matter how well you know real estate matters, a real estate agent will always be many steps ahead of you. The reason for this is that they have big networks of realty companies, sellers, buyers and real estate attorneys. Thus, their help can be priceless and it can help you get the most out of your time.
You will also find their advice to be priceless. They know the market trends, they know any developments slated for the future and they know who is selling what you need. If you would like to save time, engage the help of a real estate agent.
If you want to invest in a condo unit, the above-mentioned tips should help you get the best deals. Always look out for best condos for sale in the city you want to live in. Say for example, if you are from Santa Monica, you can find a Santa Monica real estate agent to get help to pick an affordable but beautiful condo unit in Santa Monica.