While most people wait until they have made their second purchase to start investing in real estate, this could be a missed opportunity because sometimes there is no reason to wait. If you can afford to buy a condo, now might be the best time for you to buy an investment property and become a landlord.
While condo developments can be found across the country, investors often look for prime spots such as Scottsdale’s housing market, in Arizona which is set to keep up its healthy pace this year. If you are looking to invest in Arizona real estate, you will discover magnificent condos listed for sale in Scottsdale. It is strongly recommendable to work with a real estate agent who can find you an adequate property. A realtor can offer you info about property values and get you familiar with the current trends. What is more, a real estate professional may also be able to help you find good tenants.
Here are a few reasons why purchasing a condominium as rental property could be a great investment.
1. Condos are easy to rent
Renters have become the majority population in cities across the United States. The idea of owning a home is not that appealing to younger generations. For many, the American Dream no longer includes home ownership. The number of owners across many markets is failing to keep up with the number of renters. Owning a rental unit like a condo is a great way to make money as a property owner. Condos are usually easy to rent out in great locations because Individuals get to rent homes in a place that would otherwise be out of budget.
2. Fewer maintenance and repairs costs
As a strata condo property investor, you are generally not directly responsible for maintaining the building or making any necessary exterior repairs. The strata property manager will be dealing with such matters including any exterior maintenance and repairs as well as landscaping, trash and snow removal.
3. Condos are reasonably priced
Condos usually cost significantly less than a single-family home in the same area. Property investors should pay attention to the values in the geographic area, the cost of living, and the homeowners association fee.
Buying a condo for investment
If you are ready to consider condo investing and acquiring a rental property for the long run, follow these steps:
- Contact a local real estate agent: Consult with a local real estate agent, as they have valuable local expertise that will help you make informed decisions on the investment potential of any condo you may be considering in their market area.
- Research rents in the area: Tell your real estate agent that you want to know what the rental rates are for real estate in your target area. Looking for a desirable building with a low percentage of units classified as rental within a specific development will give you a larger pool of potential renters which results in a more stable investment.
- Calculate rental property cash flow: To determine your ROI, calculate the return and divide it by the total cash investment. It might be possible to get monthly cash flow. When calculating rental property cash flow, take into account resale value and tax advantages.
- Take care of preliminaries before making an offer: Before you rush into making an offer on that perfect condo, determine how much you can afford to spend. Schedule an appointment with a bank representative. This will help you understand the financial details that are involved in purchasing the unit and establish a budget according to your income level. Many sellers do not accept an offer without a loan pre-approval letter.