Hi All,
I work for a property investment firm, I thought I would make that clear from the start – I'm not trying to sell anybody anything.
For my own personal research and to better my knowledge of the market and what investors are looking for. How do you feel about Condominium developments over Freestanding Duplex/Triplex Houses in the US?
Given the fact that with a house, you are liable for rather large Maintenance costs if (for example) the roof cracks – wouldn't your yield be absorbed by maintenance fees?
I have associated on the ground in the US sourcing good deals mainly for people who want the hands off approach, I look after more than 9000 active investors so always keen to get feedback.
Thanks all and happy investing
James
[email protected]The renovation required to bring a distressed house in the USA up to rentable level is more of an unknown quantity than a condo.
And if you are in Australia attempting to do that, it’s a much bigger task. A condo generally just requires cleaning of carpets or replacement, a bit of a fix up here and there, perhaps a coat of paint. Sometimes the hot water service needs replacement or the washer or dryer has been taken and a prospective tenant will request one.
So they are less hassle.
That said, the potential capital growth over the longer term is going to be greater with a single family home or townhouse than a condo.
If you have a good relationship with a property manager in the US, they can organise renovation…. it just depends on what you feel comfortable with.
Yes, a house potentially has more maintenance but you’re not paying HOA fees with a home like you are in a condo complex.
If you are planning on investing in a condo, make sure that the HOA is in good health and has a sizeable slush fund for fixing the unexpected. We’ve been advised that a well run HOA in a largish complex should have at least $500K or more accessible for maintenance work if it’s needed.Hello,
We deal with a range of properties – some with high HOA fees and houses with no HOA. I think it depends on management – both HOA and in-country manager.
Regards,
Steve
I pretty much agree with what Steve is saying above – I am the President of a real estate firm too, so just like James, I have an ongoing interest in this question.
Many foreign investors (and some U.S. based too) really balk at the idea of paying HOA fees, although there are distinct advantages to doing so as well. Most of the times the HOA will look after all common areas as well as maintaining a certain level of security, something that can really help you save money in the long run, as well as some communities will also offer a tenancy sourcing service etc.
Off course, in some cases the HOA is way too high in relation to what is being offered, and in some cases the HOA is more or less bankrupt, in which case it won’t provide much assistance anyway.[
Please e mail me @ [email protected]We lend on a lot of these assets and I can give you some insight to your question.
For the entire audiance
In a downturn Condo's become the hardest asset to sell. The HOA's many times go broke. Back in the 80's there were restrictions placed on the developments that required a certain amount of Owner Occ before US backed loans could be used on the project. Those rules loosened along with everything else finance gonig into the 2000's.
I would be happy to speak with you off forum about small multi family as well.
Right now for the deals available on Single Family Homes – I believe it is a much smarter play to invest in Houses rather than Condos.
Hey Dan,
In Australia, there are few reputable websites that investors use such as http://www.residex.com.au. That website tells you a lot of the Australia property market in the past quarters (e.g. 3 months, 6 months etc). Do you know such website in the US that provides the same service (e.g., history of capital growth, yield return, media rental return, median house price).
Thanks in advance.
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