Re: Are condos and townhouses good rental properti - Posted by Frank Chin
Posted by Frank Chin on February 20, 2001 at 18:51:30:
I owned both types and here are pros are cons
Maintenance in common areas handled by management company or condo owner volunteers.
1- Renters in some cases must be approved by Condo Board, which meets once a month. You may lose potential tenants who wants to move in quickly. I was able to quickly rent to a tenant one time who was waiting to be approved at a condo.
2- If your tenant has nosiy neighbors, he’ll complain to you, you complain to the board, and the board writes a letter to the other condo owner. You get the picture.
3- If the proportion to non owner occupied units goes over 50%, the property quickly deteriorates. The absentee condo owners does not want high maintenance fees. I own a condo where they restrict absentee ownership to 25% and condo prices goes for 50K to 75K. Prices at a neighboring building with over 50% absentee ownership was selling as low as 10K.
4- Condo board may make special assessments on major improvements which may occur at an inconvenient financial time for you.
5- You depend on the condo board to make sound financial decisions. Sometimes they fall asleep at the wheel and major assessments might have to be made to replenish reserve funds. I owned a condo once where the association was $15,000 in arrears on their utility bills, at the utility threatened to cut off services. Fortunately, the fact came to light soon after I sold the condo. The new owner wasn’t very happy.
From my standpoint, there are many more things you’ll have to watch out for when renting through condo ownership.
With a house, you pay the bank and taxes, and the tenants pay the utilities. Very simple. You decide when and how to do the repairs repairs. You don’t have to wait for a condo board to approve your tenant.
You do all the repairs. But with proper screening, have the tenant do it for you.