Is it wise to buy a condo to rent out?

[Alexandoy]

Our family friend bought 2 condo units in a suburban town that is near a school. The condo units form part of his investment that he will rent out to potential tenants in the vicinity. The school is actually a college and there are foreigners who are studying there. Good prospect are the foreign students. When he advertised the condo units, there were many interested. However, all the prospects are asking about the parking space. Our friend did not bother to buy a parking slot because it is expensive costing $20,000 per slot (he has 2 units so the cost of the parking slots is substantial). Anyway, since he couldn't buy a parking slot aside from the exorbitant cost there is no more available slots so his condo units are idle for more than a year already.

That is a costly mistake of our family friend. Now he is selling his condo units but there are not takers either due to the lack of parking space. I am posting this topic to serve as a lesson for those who have plans of buying a condo unit. Check all the needed requirements by the potential tenant before you make the purchase.

 

[kayode10]

It is a wise decision to buy a condo in order to rent it out to make residual income. Condo is recommendation for those who are just getting started with real estate investment. Condo does not cost huge amount of money to acquire. It also gives you the opportunity to start any money with real estate investment fast.

 

[Deleted member 28127]

In this case, it becomes a business and you have to pay VAT and fee for rental earning for the state because you buy something to earn money from rental. There is a difference between personal use and commercial use.

 

[Setho]

I am going to see that this is going to be particularly dependent on the particular situation that is on ground between you and the person who is willing to sell the property . For example somebody might be having a very good property but he is in need of a high liquidity in order to solve another different problem and that is a very good opportunity to snap of the property for cheap. You can then be able to concentrate on anything else the product and getting small amounts of money for a long time. I will not advise you to get the property if it is going to require that renovation.

 

[Caramelle]

Those parking spaces usually do not form part of the unit rental. Potential renters would have to pay extra for those expensive parking spaces. Thus, the unit owner who does not have them can still arrange for parking with other owners or with the condominium association. It's not a logical reason to give up on the business. However, It's not just the concern for the parking space that should be considered when leasing out a condo unit. Besides the monthly unit rental, the renter will usually pay for the monthly condominium associations fee which is almost half the rental price. This is probably worth it if the condominium is located in the big city which is very near the renter's place of work. In which case, the renter will likely share the rental unit with a co-worker or a friend to save on transportation and accommodation costs.​