If you’re in the market for a condo as an investment property, you may be wondering how to find the right one to fit your needs. Attracting the right kind of tenant can be the difference between a successful investment and one that ends up costing you more than you bargained for, so finding the right condo is imperative.
Here are a few things to look for as you decide on your investment property.
Depending on the type of tenants you’re seeking to attract, you’ll want to consider the property’s location. A condo that is close to public transit, popular attractions, workplaces, schools, or great nightlife can all be sought-after amenities. Proximity to green spaces and recreational opportunities are also desirable features.
If you’re looking to attract young professionals, you should look to invest in a condo near an urban core for potential proximity to their workplace, but also close to surrounding restaurants and attractions. Alternatively, if you’re looking to rent to a family with children, you may want to look for a condo located near schools, parks, and shopping.
One of the biggest perks to investing in a condo is that most condo properties have an existing maintenance company in place to take care of any repairs or issues. You won’t need to spend your evenings and weekends mowing lawns, shovelling snow, or receiving that dreaded emergency call at 2:00 in the morning to repair a water leak. The property management team takes care of all that for you.
As these maintenance tasks are covered under your existing monthly condo fees, you can rest easy knowing your expenses related to the investment are predictable.
Another important factor to consider when looking for an investment condo property are the amenities within the building itself. You’re looking to attract high-quality tenants that will stick around for a long time, so if you invest in a condo building that can attract these tenants, your job will become a lot easier.
Young professionals, for instance, might be attracted by a fitness center within the building which can save them from the hassle and expense of leaving the building to work out. Others may be attracted by a conference hall or entertainment lounge for hosting important meetings.
Every condo property will have a condo board, consisting of current owners, that runs the operations of the building. What to watch out for is whether the board manages the property efficiently and effectively. Not all boards are created equal but checking into the property’s reserve fund to see how it is being managed is a good indicator of a quality condo board.
A well-managed condo will be a solid investment; property values will remain steady or rise as they should in a strong market, which in turn ensures your equity is safe. Tenants will also remain happy and will likely rent from you longer, meaning less work for you to ensure your condo is occupied.
All condo properties should have rules and bylaws that the residents of the building must adhere to. These rules are in place to ensure the quality of life for all residents. Check into what these rules and bylaws regulate and determine if they are sufficient to create a positive living environment for the property. It would also be prudent to inquire about past issues and how they were handled.
As you’re deciding on the condo property in which you plan to invest, be sure to budget for all related expenses, including your mortgage payment, property taxes, utilities, and condo fees. Do your research on how much rent is reasonable to charge for the unit and run it against your budget to ensure your financial goals will be met.
Always consider the unknown; even though your monthly condo fees contribute to the building’s reserve fund, not all major repairs or renovations can be covered by the fund. Owners of condo units can find themselves being served a special assessment, which is their share of the cost of a major change or repair to the building. These special assessments can run in the tens of thousands of dollars, so be sure your budget has the margin to cover any of these potential surprises.
Investing in a condo as a rental property is a solid way to grow your financial portfolio. They’re typically more affordable than other property types and have quite a lot of perks attached that save you both time and money as a landlord. Finding the right condo in which to invest takes some research and planning, but by doing your due diligence, your investment will attract solid tenants and create financial growth for your future.
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