Posted on: 26 April 2016
Buying a condo can be a great investment if you approach the purchase properly. Before you select a property to build your investment portfolio, there are a few things you will need to consider. Use this list as a guide to help make the buying decision that makes the most sense for your current and future finances.
Estimate Monthly Cash Flow
When it comes to buying condos, there are a number of expenses you'll need to weigh against the potential rent you will receive from a tenant. You'll need to cover the cost of the mortgage, taxes, regular property upkeep, and the homeowner's association fees. This is why it is important to examine the average rental prices for apartments and condos in the area before you purchase. You will need to make sure that you can charge a monthly rental fee that covers your expenses and still provides you with profit. If you will be hiring a property management company to take care of the property for you, it is a good idea to check the rates of local management companies so you can work that cost into your monthly expenses as well.
Examine The Complex
It isn't enough to buy a condo for sale that is in good shape. You also need to make sure that the condominium complex is also beautiful and managed well. You want your property to appeal to excellent tenants, so be sure to take a tour of the entire complex. Look for features of the property that can help make your condo desirable. Some of these features might include:
- Tennis courts or playgrounds
- Swimming pools
- Public meeting or event rooms
- 24/7 security
- Gated entrances
- Walking paths
Determine The Homeowner's Association Covenants
In addition to knowing how much the HOA fee is, you should be comfortable with the homeowner's association covenants. The covenants are regulations that guide how your property can be used. You may be restricted from placing plants on balconies, or from placing Christmas decorations on doors and windows. Some HOAs are very restrictive, while others are a bit more relaxed. If you have an HOA that restricts a lot of customization of the home, you may have a difficult time finding tenants. Ask to see the complete list of covenants before you buy so you can be comfortable with the rules that will govern your condo.
Condos can make excellent investments, but you'll need to carefully inspect the building, property and HOA agreement. Once you have determined that the property is right, talk to an accountant to make sure you can get the right type of cash flow out of the property. All these steps will help you to find the right condo to build your investment portfolio. Visit http://www.bestclarksvillehomes4u.com for more information.Share