Posted by TomC (Md) on May 30, 2000 at 15:42:22:
Sheik,
You bring up a good point about depreciation. When you rent a property, depreciation partly offsets rental income. But you can only depreciate improvements, not the land itself.
With a condo, as much as 95% of the value can be attributed to the improvements and can be depreciated over the 27.5 years. The greater number of stories per building, the lower your percentage of land value.
TomC
Condos - Posted by Gary - Northern Virginia
Posted by Gary - Northern Virginia on May 30, 2000 at 09:21:19:
I have heard that Condos don’t make great investments because they don’t appreciate. However, I’m just starting out and I own a condo that I’m renting at a profit. There is basically nothing for me to do except cash the check every month. The COA dues are set for ten years in advance. Also, last I looked, a few of sold for about 15k more than I paid. I’m saving money for future carpet, etc.
My question is: Am I missing something? Seems that they are great hands off rental properties, if purchased right.
Re: Condos - Posted by Sheik
Posted by Sheik on May 30, 2000 at 14:22:13:
I just bought one for $48K. Needs about 5K fixup. FMV is about 67K. Will rent for about 1K/month. Personally I think they are great for rentals (cashflow + depreciation etc).
I am new to this area - maybe others will give their opinions as well.
Sheik
Re: Condos - Posted by TomC (Md)
Posted by TomC (Md) on May 30, 2000 at 13:32:32:
Hi Steve:
I have a couple of rental condos in a really nice complex. Both have a small positive cash flow like yours, and I am looking for more.
I have seen very little appreciation, but I consider that a trade-off for the “hands off” aspect of ownership.
I joined the board of directors after buying the 1st one. Seems that very few people want to invest 3 hours a month in the association, so getting on the board was easy.
What’s nice about being on the board is that every month I get a copy of the collections report that shows me which unitowners are behind in their condo fee payments. Those are the ones I have pitched “subject to” with no $ down solutions to.
One of these owners did agree to sell to me for the amount they owed on their mortgage, but did not want to have the loan stay on their credit report. I bought that one with conventional NOO financing.
No takers yet with no $ down, but my presentation is getting refined - Bet I get 1 or 2 before the end of the year!
TomC