If there was any time that is the best time to invest in a condo it is now. In May of 2020, condo sales dropped by more than 50%. They dropped again in June of 2020 by over 30%.
When sales go down, prices tend to follow. If you’re asking yourself, “Should I get a condo?” this might be the perfect time.
Before you make your final decision about condo investing in Washington, DC, keep reading for some good reasons to invest in a condo.
#1 Condominiums Appreciate
Normally, a condominium will appreciate in value. They are well maintained and people in cities are always looking for low-maintenance house options. Condos in Washington, DC are selling at lower prices now, though, so that could mean a higher return on your investment.
If you are looking for a low-risk investment, a condo can be a good choice. You can live in it or you can rent it out. Whatever you decide, if you give it time, you’ll likely see the value of your real estate investment go up.
Many people start buying condos and renting them before they even buy a property to live in. Having rental condos can increase your income and help you save money for a house.
Buying rental condominiums can also be a good retirement strategy. If you have several rentals with good tenants, the rental income will supplement your retirement income. Alternatively, you can sell your condos when you’re ready to retire.
#2 Renters Love Condos
When vacancy rates on rentals are high city-wide, it can still be fairly easy to find renters for condo units. Condominiums are usually in good neighborhoods and most have security features. Many condo buildings have other perks as well.
This can make it easier to price them high and get higher-quality tenants. Since maintenance fees in condo buildings cover most major repairs, you only have to worry about the upkeep of the unit.
#3 Invest in a Condo for a Better Neighborhood
People generally don’t want to buy condos in undesirable neighborhoods, so no one builds them there. One of the biggest condo pros is that you can purchase real estate in a neighborhood where you may not be able to afford to buy a stand-alone house.
#4 Condos are Popular Among Millennials and Retirees
There’s a huge market for condos because there are two major groups that like to live in condominiums. Millennials and retired people love the convenience of condo living.
Retired people are often looking to downsize. Once their children have started lives of their own, there’s no need for a big house. Condo living is ideal for anyone that likes to be close to amenities or have them right in their own building.
Millennials are looking for living options that are both affordable and close to all of the attractions of city life. They don’t mind living in smaller spaces to be close to their desired lifestyle.
#5 You Can Liquidate Your Investments Quickly
If you decide that you want to invest in something else or if you need money quickly, it’s can be easy to sell your condo. If you invest low in this market, you can make a profit and move on to bigger and better things later.
If you invest in a condo, you can use it as the start of a rental investment portfolio. Over time, you build equity, and that increases your net worth while allowing you to purchase other properties when you decide to sell.
Are There Drawbacks of Condos?
If you are going to invest in a condo, you should know there could be some cons. Some of them are minor but others are things you should know about before you buy.
Because the condo association includes maintenance and general upkeep, you may not have the ability to decide when they are completed. You will have to work with the condo association to make sure tenants get adequate notice.
You can’t pick and choose which amenities you pay for. Some of the amenities that are included in condo fees may be things you or your tenant never use. That means you’re paying for things that aren’t benefitting you.
Renters or condo owners that live in their units may have to deal with their neighbors’ noise levels. Other condo dwellers may live beside you, above you, and below you. You should expect a certain level of noise from neighbors.
Condo units may be smaller and have fewer storage options. Some condo buildings have outside storage or storage options in other areas of the building. However, this means that getting to your stored items may not be convenient.
Not all condos cover every necessary repair or maintenance in the condo fees. If you have to get repairs that are not covered, you will have to pay for them out of pocket. This is especially important if you have renters.
Finally, living in a condo is not like living in your own house. The condo association decides things like what noise levels are acceptable and whether they allow pets. If you don’t like others making those decisions for you, this can be a drawback.
Before you buy a condo, make sure you look into the insurance rates. Your condo association may have higher deductibles with less coverage. Look for insurance companies that specialize in insurance for condominiums to get the best rates.
You can also reduce insurance costs by raising your deductible. Consider installing an alarm system that works with a service outside of your condo building, too. This can also help decrease your insurance rates.
Investing in a Condo Is Good Experience
Even if you don’t plan on owning many properties, investing in a condo can be a good experience that will teach you life lessons. You learn to manage money, develop communication skills, and it will prepare you for buying a house.
Check out the condo analysis report on our website for more in-depth information on investing in a condo.