If you’re considering a property investment in Woodinville, then condominiums are one option that you will probably see fairly often. With a variety of developments around the area, you can invest in new condominiums, or an existing building depending on your preference, or work on your own. However, it is important to consider whether or not buying and selling condos is a good idea. We will go over tips from local Woodinville property managers, outlining the pros and cons of selling your property out as condos, so you can choose the best option for your needs.
Pros of Investing in Condos
One of the biggest things with selling condos is that you can make your money back, and quickly. By selling units, you can usually see returns, or break even, within a year or more, especially if you start pre-selling condos before they are ready. This allows you to quickly make your money back, and usually with a decent profit, so that you can start on a new investment. Because this is the primary benefit of condos, you can consider them if you mostly want to slightly increase your capital, add to your portfolio, and gain experience, without waiting years to see a return.
Condo Fees – You can usually continue to earn a small fee off of condos through condo fees, where the owners pay a small fee to handle management, repairs, maintenance, etc. This will get you a very small profit over time.
Cons of Investing in Condos
Long Term Maintenance – While you will make the bulk of your investment back immediately, you will be responsible for long term maintenance and management. This means taking care of the grounds, the lobby, and any community property that you did not sell.
Taxes – You will also have to pay taxes on the property that still belongs to you, as well as on any fees you collect for the property itself.
High Fees for Individual Condos – If you’re planning to purchase an individual condo and rent it out yourself, for a low-cost investment, you will face heavy taxes, fees, and other issues, which can greatly reduce profits, meaning that it takes a long time to pay off.
No Control Over Tenants – If you have rowdy or bothersome tenants in a normal rental building, you can easily evict them. Not so with a condo, where the tenants own the property. This can be a hassle.
Should You Invest in Condos?
Usually your best bet is to invest in rentals, because they generate long-term income for more time, and therefore hold more potential for return. If your goal is to make your investment back as quickly as possible, you can consider selling as many units as is necessary to make up the cost of purchasing the building, and rent out the rest, but keep in mind that many people purchasing individual condos are looking to rent the property out themselves, as a small real estate investment.
Condos can be a good idea, and can help you make returns more quickly. For small investors, they provide a way to get into the property investment world while spending less investment capital. That aside, this business module isn’t always as profitable as other options, so you should go into it with care. Plan, research all of your options, and make sure you are getting the best for your money before you make a decision.
If you need help with Woodinville condo management, contact SJA for a free consultation.
The discussion herein is of a general nature only and is not to be construed as specific legal advice, which requires the establishment of an attorney-client relationship and fee agreement. SJA Property Management does not provide legal services.