3 Tips to Increase Your Home Value for Reselling

Whether you are a new homeowner or a seasoned vet, increasing your home’s value is a no brainer. There are several improvements you can make that will attract buyers like honey when it comes time to sell your current property. Check out these quick tips for increasing your home’s value and come up with a plan for renovations that include some items from the list. Start with a plan for the home value you want to achieve. Then meet with a professional home inspector to determine the value of your home as it stands. Finally, consider the cost of these upgrades and whether or not they will bring significant value to your home.

  1. Heated Floors

Heated floors are by far one of the best upgrades you can give your home regarding finding a buyer for it later. Buyers love to hear a home has heated floors because that means the home is a comfortable space to enjoy. Heated floors add more value to homes that are located in harsh winter environments. If one of the reasons you’re considering selling your home is because you hate winter, consider this upgrade for yourself. It might just make you fall in love with your house all over again.

  1. Home Elevator

For the aging baby boomer populace, living in comfort often means limiting themselves to a single-story home. That’s not always feasible, which is why the home lift business is booming. Home lifts are not the clunky elevators from the 80s that you’re picturing. Most modern residential elevators are custom designed and modular so that they can be moved. Pneumatic lifts like the elevators featured in The Jetsons are now a reality, too. They’re a bit more expensive than the traditional lift, but their quiet operation and ease of use makes them a very attractive option for homeowners. Home elevators add value to a home by making the upper floors of the home easier to access. A home lift makes moving furniture and accessing the upper floors a breeze. Baby boomers who refuse to live in multi-story homes because of those awful chairlifts will want to speak with a lift professional today.

  1. Upgrade Your Kitchen

If you have to choose just one house in your home to remodel to increase its value, choose the kitchen. The kitchen is an integral part of any home that sees use day after day. Prospective buyers will appreciate a modern, updated kitchen with new appliances. The cost for updating your kitchen might be minimal depending on how old your home is. Consult with a professional designer or contractor to determine your options.

As you can see, there are many additions you can make to your house to make it more valuable. These upgrades may even make you want to keep your home once they’re finished, if you were considering selling in the first place. While kitchen improvements are a sure-fire way to add value to any home, you can also consider looking at upgrading the bathroom, too, depending on your budget.

Do Condos Provide a Good Return on Investment?

When it comes to real estate investing, most people think of single-family homes or apartment buildings. But condos, with their low purchase prices, make real estate more accessible to first-time investors.

Some people start investing in condos and never stop.

The question is: do they provide a good return, or are you better off going with a different type of property?

Location is Everything

Location is everything in real estate, but if you’re investing in condos, it’s even more important. Condos perform better in some locations than others.

For example, an oceanfront condo in Myrtle Beach will likely have a steady stream of renters, and its desirable coastal location may help the value appreciate quicker than the average condo. In some cities, condos are the only properties that provide oceanfront views and out-the-door beach access. These same principles also apply to major metro areas, like New York City, Los Angeles and Chicago.

With that said, condos in major cities will naturally come with a higher price tag and may not be as easily accessible for beginner or even more experienced investors.

Consider All of the Fees Involved

When you invest in a single-family home, you have to consider property taxes, utilities and maintenance costs.

With condos, you also have to consider HOA fees. Yes, there are also many homes that come with HOA fees, but generally speaking, condos have higher fees. And these fees can increase over time. It’s not uncommon for HOA fees to be $300-$400 per month.

There is an upside to paying HOA fees. You no longer have to worry about maintaining the lawn, exterior of the building and the roof. If the community offers amenities, like a pool and gym, these can be major selling points for some tenants.

Some communities prohibit owners from renting their units, so you’ll need to go over the bylaws with a fine-tooth comb.

HOA fees may not be a problem if you can find a small community in which all of the buildings are for sale. If you were to purchase all of the units, you would become the HOA. But you’d also be responsible for maintaining the exterior, lawn and everything else that a conventional HOA would take care of.

Choosing the Right Unit

Some condo investments may be better than single-family investments. It all depends on the market, the location and the building. Certain units within a building are more desirable and will rent more quickly than others. These units will likely sell for a higher price than other units, too.

These are generally condos that are on higher floors, have better views and/or have a better layout.

Condos are often more liquid than single-family homes. Because of their lower price points, they tend to sell quicker, and there are usually plenty of buyers to go around. In many cases, these types of sales can close more quickly than with single-family homes.

It’s difficult to say whether condos provide a good return on investment. It ultimately depends on your investment goals, the individual unit in question and the location. At the right price and in the right location, a condo can provide a better return than a single-family home.

 

 

Investing in Canada’s Real Estate Market Just Got Risky

Canada’s real estate market was going strong, providing substantial returns on investment for investors until the market started to take a downturn. We’re seeing a lot of areas experiencing major declines in home prices, and Vancouver’s home sales have fallen their largest percentage since the Great Recession.

Home sales in the region fell 42.5% in November, and a major issue is that 1.2 homes are being built for every new resident.

Just 1,608 homes were sold in the metro area last month, and this accounts for the lowest sales for the month since 2008.

Toronto is also facing a decline in housing sales, which have fallen for the eighth straight month. New listings are down 26%, but home prices are remaining steady. This is giving investors some hope that they will not lose out on their investment.

Toronto’s sales and prices have started to stabilize after a major drop earlier in the year, and some investors suggest that the decline in sales is due to a lack of new listings.

Should Investors Pursue Canada’s Real Estate Market?

Sales in Toronto are down 15% compared to the same period a year prior, and home prices are rising at a slower pace of 3.5%. There’s still money to be made in the market, but investors are opting to invest in other markets, primarily in the United States, where prices have remained strong in some regions.

Iowa’s market, for example, is expected to remain rather strong, with appreciation rates of 7.7% in some cities, including Mason City and Pottawattamie county. But new home sales in the U.S. fell to a 2-½ year low in October, so investors will want to remain cautious in the U.S. as well.

REITS are also an attractive option due to the market slowing in the U.S. in some regions, as inventory issues start to subside.

The top Canadian REITs include:

  • RioCan
  • H&R REIT
  • SmartCentres
  • Canadian Apartment Properties REIT

REITs offer a safer investment than purchasing real estate because they include portfolios, and this means that they have rent and income that is derived despite the market’s current sales lull.

RioCan, for example, is an investment trust that has 289 retail properties and leasable space of 44 million square feet. Enterprise value for the REIT’s portfolio is $14 billion, and the dividend for the company is 5.9%.

REITs may provide less of a return on investment than purchasing, remodeling and reselling properties, but the massive portfolio size and lease space make them less risky when the market drops.

Investors will want to remain cautious when investing in Canada’s real estate market due to the current sales drop in many regions.

While prices have remained relatively stable, if inventory levels continue to grow, we may see a lot more competition in the market, pushing prices down. With sales slumps occurring, it may be better to wait for economic indicators that the market is on a path of sales recovery before diving into a market where the sales have been steadily declining in recent months.

Norma Walton, 8 Reasons That Receivership Sales are Always at a Discount

Unfortunately I am something of an expert on receivership sales.  Back in 2013, my ex-partner petitioned our real estate portfolio into receivership without notice to our lenders. As a result, almost every property was sold via receivership or power of sale for a significant discount off the fair market value, all in a rising real estate market.  During that process, I became painfully aware of the eight reasons that Receivership sales are always at a discount.

Reason # 1:  Negative Publicity

Placing a property under receivership requires a court order.  Court proceedings are public.  As a result, there is publicity surrounding receivership sales.  When someone hears that a property went into receivership, the perception is usually that there must be something wrong with the property.  Generally receivership sales are ordered when there is controversy and contention between warring factions, be they partners, a lender and borrower, or family members.  This perceived stigma detrimentally impacts the property.  Negative publicity will reduce a property’s value.

Reason # 2:  The Process

In a private sale transaction, typically one buyer negotiates with one seller to purchase a property.  Receivers don’t have that option; they must run a sales process.  This usually means offering the property to market for a specified period of time with specific advertisements in specific publications, a real estate listing, and an offering to customers of the Receiver’s firm.  Receivers generally want to review all offers at the same time.  This tender process is a disincentive to a lot of potential purchasers.  Potential purchasers prefer to deal one on one with the seller of the property.  Most purchasers don’t want to be put in a competing arena with other purchasers.  Hence the process that Receivers need to run turns away many potential purchasers.

Reason # 3:  Uncertainty

Obtaining approval for a Receivership sale requires a Judge’s approval.  The Judge has a number of competing interests to address and if one of the parties objects to the sale, that objection often delays or stops the sale from being approved.  As a result, there is very little certainty in putting in an offer for a property being sold via receivership.  Until the sale has closed, the sale may be cancelled at any time.  This lack of ability to plan causes many purchasers to not bother offering in the first place.  The end result is so dependent on forces beyond the purchaser’s control that it discourages some purchasers from buying.

Reason # 4:  Higher Deposit Requirements

Receivers want certainty even though they cannot offer the purchasers certainty.  As a result, they usually require at least 10% of the proposed purchase price to be tendered with the offer to purchase during the tender process.  Generally the deposit cheque must be certified.  Hence a purchaser, before knowing if his or her offer is even going to be accepted, has to go to the bank and obtain certified funds for 10% of the proposed purchase price just to offer.  This is a major disincentive for many buyers and thus reduces the pool of potential buyers.

Reason # 5:  Complex Purchase Agreements

The standard TREB or OREA form is fairly straight forward.  Once you have dealt with it a few times, it is user friendly.  Not so with receivership forms.  Offers to purchase through receivership are typically at least four times as long as the OREA form.  They are full of legal language explaining all of the ways the Receiver can exit the deal and everything that must occur before closing.  A prospective purchaser usually requires legal advice just to understand the agreement before he or she can sign.  The need to seek legal advice before offering is a disincentive and reduces the pool of potential purchasers.

Reason # 6:  No Warranties or Representations

A Receiver cannot give warranties or representations.  As a result, a purchaser of a property under receivership takes the property “as is, where is”.  That means the purchaser must be comfortable with more risk than in a normal private real estate transaction.  A Receiver cannot represent the rents being collected on a commercial property, for example, nor can he or she warrant the status of the building systems in any capacity.  They guarantee nothing!  That reduces prices because purchasers must shoulder more risk than in a private sale transaction where there are almost always representations and warranties.

Reason # 7:  Lack of Specific Property Knowledge

The Receiver did not purchase the property.  They generally have not run it very long if at all.  They are not real estate experts.  They generally don’t understand the strategic buyers of a property or its highest and best use.  Their expertise is in accounting.  As a result, the property is generally not marketed as effectively as it would have been if a private owner sold it.  The person who bought it can usually market it better than a Receiver.  This lack of expertise reduces property value.

Reason # 8:  Firm Offers are Preferred

Receivers have to go to Court to recommend that a Judge accept a purchase agreement.  This takes a lot of coordination, effort and paperwork.  As a result, they ideally want to present firm offers.  Otherwise the purchaser could exit the deal after all that time and money is spent to secure approval.  Receivers generally won’t accept anything other than firm offers from purchasers.  This puts purchasers in a position to have to waive all conditions even though they may not have a good sense of the property and its perils.  Having to provide a firm offer instead of a conditional one always discounts prices.

 

Our real estate portfolio was sold at 70 cents on the dollar in a rising real estate market.  Watching that process made me acutely aware that it is a legal fiction that fair market value is ever achieved through a Receivership sale.  The eight reasons listed above guarantee that Receivership sales will always trade at a discount.

6 Ways to Pay for Unexpected Home Repairs

Emergency home repairs always pop up at the most inconvenient times – and almost always when you’re already in a financial bind. Coming up with the cash to pay for these repairs can feel daunting, but there are ways to cover to cost of these unexpected repairs. Here’s how:

1. Government Loan Programs

The government offers loans to assist with home repairs. The Limited 203(k) and FHA 203(k) allow borrowers to refinance or purchase property with additional funds for repairs and upgrades.

The Title I Property Improvement Loan program, which is offered by the Department of Housing and Urban Development, can also help with repairs. These loans are FHA-insured and issued by lenders. They’re a great option for homeowners that have little equity in their homes. Loan funds can be used for major repairs or even appliances and other items that will make the home “more livable and useful.”

The U.S. Department of Agriculture also offers a program that can assist with home repairs. The USDA Section 504 Home Repair program assists homeowners with very low incomes in rural areas improve, repair and modernize their homes. Grants are available to homeowners aged 62 and older.

2. Homeowners Insurance Claim

Some homeowner insurance policies also include repair emergencies. Check your policy to see if your insurer offers this coverage.

If your home’s roof, for example, is damaged by a recent storm, the cost to repair or replace it may be partially or completely covered.

3. Use Service Coupons and Financing

If you don’t qualify for a loan or grant program, shop around local service providers to see if any offer coupons or financing. If it’s a major repair, you can often find local companies that offer to finance the work through a third-party lender.

Most providers will have coupons that help reduce the cost of repairs and services. A discount may be all that you need to make the service more affordable.

4. HELOC

A home equity line of credit (HELOC) used to be one of the most popular ways homeowners covered the cost of home repairs. These lines of credit allow you to tap into your home’s equity to cover major repairs. Just keep in mind that the loan is backed by your home, so make sure that you can afford to take out this line of credit.

5. Disaster Relief

If the repair is disaster-related, you may be able to get assistance from relief organizations like the Federal Emergency Management Agency (FEMA) or the Red Cross. FEMA will often cover the cost of emergency repairs that homeowner’s insurance policies won’t cover.

These funds are only given for major repairs to restore safe and sanitary conditions.

6. Credit Card

A credit card may be the first thing you consider using when you need to cover emergency repairs. While credit can certainly help get you out of a bind, it should be considered as a last resort. Your available credit may not be enough to get the job done, and a high interest rate can have you paying off the repair for the next decade – or two.

3 Things to Look at When You’re House Hunting

House hunting can be an exciting experience, but it’s also one of the most stressful things you’ll do. After all, buying a property isn’t something you do every other week – it’s a huge investment and something you’ll have to live with for years to come. If you’re concerned that you don’t know enough about the real-estate market to make an informed decision going forward, you’ve come to the right place. Here we’re going to look at a few of the things you need to look at when you’re house hunting, so you don’t get stuck on the superficial details like the color of the paint, or the furniture in your living room.

Location

Location is probably the most important thing you can examine when it comes to making real estate choices. After all, while you can change the way your home is decorated, and you can add extra rooms if necessary, you can’t just pick your house up and move it to another part of Canada if you get tired of the view. Knowing exactly where you want to live in advance will help you to narrow down your choices a lot faster, as you’ll be able to browse listings of Toronto condos by neighborhoods, rather than just visiting every home in your price range. Remember to think about how close your new home will be to work, and any other amenities you need, like a school for the kids!

Size and Floorplan

Finding the ideal home can sometimes feel like a bit of a balancing act. You need to find a property that fits with your budget, but you also need something that’s big enough both for your current family, and the family you plan on having in the future. Think as practically as you can about things like size and space. For instance, you probably don’t need two bathrooms if you live alone. However, you can’t get by with two bedrooms if you have four kids. At the same time, don’t get carried away with the dream of having a bigger home. While a larger space does give you more room to play with, you will have to pay more for things like electricity, heating, and of course, your overall mortgage expenses.

Resale Value

Finally, even if you adore your new home and you’re planning on staying in it for as long as possible, there’s a good chance that you will want to sell it someday. With that in mind, it’s important to ensure that your property has plenty of resale value. Consider looking into the amenities being built in the local area that might add additional value to your property. Alternatively, you can also think about asking your real estate agent for insights into what kind of prices other homes have sold for in the area. Remember, buyers often look for plenty of light and plenty of storage when they buy a new home. With that in mind, it’s a good idea to look for as much of these two things as possible when you’re buying your new property. This should increase your chances of a quick sale later on.

 

In-depth tips for beginners in real estate investing

Real estate investing is a niche which is not suitable for everybody because you need to have a specific set of skills in order to reach success. Apart from the fact that you need to master entrepreneurial skills in order to understand exactly how the market works, which investments are advantageous for you or not, and all the principles of finances, you also need to be a motivated person who does not give up when the challenges of the business might come across your way and have the courage to take risks in order to gain more. Real estate investing is a journey with ups and downs depending on the market and you can only succeed if you have all that it takes to find a suitable strategy to overcome any tight situation.

Know the market

First of all, when thinking about investing in real estate, you need to make sure you carefully do your research. If you want to become a successful entrepreneur who gains a lot of money from his or her investments, you need to be aware of the fact that good luck is not enough. All the knowledge and trends of the market, customer behavior, and the niche need to be a language which you understand completely in order to make smart investments which bring you a considerable profit and to avoid making bad investments in properties which will just won’t sell.

Buy properties to rent them

When investing in real estate, you need to be aware of the fact that there will be challenging moments when you will whether not find a good opportunity to invest in and gain more profit or the market trends will decrease the value of the properties which you own. Even if you consider investing in house flipping only, which means buying properties at a smaller price depending on the opportunity you come across with and selling them for a higher one, you need to make sure that you also have a sustainable cash flow. Sometimes, buying and selling properties is not bringing you any monetary advantage because of the mortgage rates, which means that for a while you will avoid making new investments since they do not bring you any profit. For moments like that, you need to have a constant cash flow in order to be able to remain in the market and not lose everything which you have worked so hard for. Any smart and precocious entrepreneur investing in real estate should know the importance of rental properties because they are the most secure way of making money even when the market seems to work against them.  

Work with professionals

If you want to be successful in real estate investing, you need to create a team of professionals to work with. All the people you choose to work with are going to contribute to your success or your failure, so, you need to be extremely careful with the people you choose to collaborate with. From mortgage lender, private lender, real estate broker, real estate closing agent, property inspector to electrician, plumber, and painter, you need to find the best ones in this niche and hire them. Even if the costs of their services might be higher compared with other ones from the market, you should choose to focus on the quality because the good work they do will have a huge influence on your success.

Make smart investments only

Apart from having the necessary knowledge and skills for the niche and market, success in real estate investing is mostly a matter of taking the risk and succeed with good luck. However, taking risks should be done with a strong and carefully planned strategy in the long run. Surely, you cannot foresee everything that can happen in the future with the property which you are planning to invest in because this depends on the trends of the market which are continuously changing. However, there are some things which you need to consider before making an investment which might be a risk. So, you have to make sure you understand the risks before taking them. For example, you have to make sure that before you buy a property for flipping it, you check everything about it in order to avoid being fooled and buy something which will make you waste your money. Make sure the property is in good condition or that the improvements you need to make will not leave you without any profit. Also, you should consider getting an asbestos inspection from a specialist for each property that you buy because it is a hidden problem of the old properties which might bring you problems in the future to sell or rent it. Asbestos is a dangerous and toxic construction material used before which can cause numerous health problems, so the buyers will definitely say no to a property which would put them and their families in danger.

Improve the properties

When buying or renting a property, considering the fact that it is a big investment you make for the long run, each of us wants to make sure there is no damage which might cost us a fortune to fix or to choose a good property which is advantageous from every point of view. You need to understand customer behavior in order to know exactly what they are looking for when buying or renting a property and improve the properties in order to satisfy their needs and expectations.

Have a backup fund for bad days

When investing in real estate, you will definitely have to deal with bad days when the business will not bring you any profit for some time. In order to be ready to deal with those situations without going broke, you need to consider right from the beginning to create a backup fund which will help you go through these bad days and stay on the market.

Build your network

Like any other business, real estate requires you to know the right people in order to get the best opportunities which will bring you a consistent profit and success. Right from the beginning, you need to build your network with professionals who have a strong influence in the real estate niche. So, choose your clients, business partners, and real estate agents wisely.

 

Flipping a house. Cartoon woman in overalls, with construction tools standing in front of a house divided into before and after renovation parts

How to Estimate Repair Costs When Flipping a House

Flipping homes can be a lucrative business, but it can also be a bankrupting business when poor decisions are made. Knowing how to identify a good investment opportunity and accurately estimate the costs of repairs can help you avoid financial ruin.

Here’s how to estimate repair costs when flipping a home.

Home Repairs, General Contractor and Subcontractor Costs

The first thing to consider when estimating repair costs is the home itself. Is the home a serious fixer-upper, or does it only need a few repairs?

Keep in mind that there may be hidden repairs that you won’t know about until after you start digging into the project. We’ve all seen fixer-upper shows on TV where they take a sledgehammer to the wall and find decades-old mold.

Create a budget repair sheet, also known as a cost estimate form. These forms are essentially spreadsheets that will track the repairs needed in different areas of the house. As you walk through the home with your general contractor, make note of the things that need to be repaired.

You may not be able to spot the mold inside of the walls during the walk-through, but a budget repair sheet will allow you to at least estimate the physical repairs.

Material and Labor Costs

Once you have a list of estimated repairs needed for the home, you can begin building a list of materials and estimated costs. Additionally, you need to consider labor costs.

First, let’s look at materials. One way to estimate the cost of materials is to record a high and low price estimate for each item. Once that is complete, add the two totals and divide that number by two to get average cost.

Here are some examples:

  • Paint: High – $1,200; Low – $1,000
  • Doors: High – $400; Low – $200
  • Tile: High – $1,200; Low – $700
  • Carpet: High – $2,500; Low – $2,000
  • Windows: High – $400; Low – $300

On the low end, the total is $4,200 and on the high end, the total is $5,800.  The total comes to $10,000. We’d divide that number by two to get an average of $5,000.

If there are major repairs, such as plumbing work or roof issues, you may need to gather several estimates from local professionals to determine these costs, as the figures can fluctuate wildly. Additionally, as Miranda Home Services explains, you want it fixed quickly at a price you can afford.

Additionally, you’ll need to figure in the contractor’s and subcontractor’s fees. It’s important to remember that you’re not just looking for anyone to get the job done. You want to hire a contractor who is well-rated, will get the job done right and will not just abandon the project mid-way. If you plan to sell the home, it must pass inspections and impress potential buyers. Poor craftsmanship will show through and turn away potential buyers.

Expect to pay more for a good contractor, but the peace of mind and quality work is worth the cost.

Utilities, Insurance and Taxes

In addition to repair costs, you’ll need to consider the costs of utilities, insurance and taxes until the home is repaired and sold. These costs should be relatively easy to estimate and included in your total repairs estimate list.

Marketing Tips For Property Management Companies

Property management marketing techniques have rapidly changed in the past ten years.  Newspapers, radio spots, TV commercials, and telemarketing techniques have been rendered nearly obsolete by digital media.  

Today’s successful marketing campaigns operate on a different wavelength; the digital highway of the internet.  Here is a brief look at some of the most effective digital marketing tips for property management companies today.  

Learn the basics of keyword marketing

The keywords and phrases you work into your digital content should be strategically formatted to help Google identify what your content is all about.  The goal is to find a way to determine the words most searched by web users seeking services/products similar to what your business offers.

The best tool for keyword research is Google Keyword Planner.  Get your marketing content to the next level of effectiveness with this fabulous textual tool.  The right keywords can mean the difference between 500 and 5,000 views per day.  

Cater everything towards mobile media

Mobile access to the web is  more prominent than ever before, and your digital content should take factors such as those into account.  Optimize everything you post online to fit the display format of the smaller screen of a mobile device.

The easiest way to take a step towards mobile optimization is to integrate media queries into your design coding.  Media queries will automatically detect and augment your content to fit the screen of the mobile device currently viewing your organization’s digital information.  

Work social media into your marketing plan

Social media should always be a part of your marketing plans.  Your business website should be the hub of your social media push, second only to your actual social media profiles.  

Work all of the most popular social media networks, and use social media sharing icons throughout your business website design.  Take a look at this property management website.  The placement of their social media sharing icons is ideal.  Web users need the ability to share on a whim.

Check out what the competition is doing

Before you lay out your digital marketing plan, it’s beneficial to do a bit of research on what the competition has to offer.  This is not to say that you should copy exactly what others are doing to grab the attention of consumers.

Use the information you find during your research to formulate your own well-rounded marketing plan centered around the benefits of property management services.  

Learn the ins and outs of SEO

Search engine optimization is a collection of concepts which will help you form more directly focused and effective digital content.  Learn how to get your digital creations at the top of the results list when web users search relevant terms to your organization.

Single Family Home vs Condo: Which is the Better Investment?

If you’re planning to invest in real estate, you may be wondering whether a single-family home or a condo will provide the best return. Both have their pros and cons, but ultimately, it comes down to your personal preference, the market and the location.

There are several things to consider when deciding which option is best for your investment portfolio.

Investment Return

Condos have long been favored by investors because they’re low maintenance and affordable. The idea is to park your money in the property with the idea that it will appreciate over the years without you having to spend a fortune on maintenance. Ideally, you would sell the condo in the future for a substantial gain.

If you’re buying with the prospect of renting, the fair cash-on-cash investment return tends to be higher with a condo compared to a single-family home (4-7% vs. 3-5%).

Just keep in mind that in the future, when you decide to sell, you may not see the substantial gains you were hoping for. Many potential homebuyers would rather not pay a higher sales price and then pricey condo fees on top of that.

Of course, this doesn’t apply to every market. Myrtle Beach, a hotspot for condo investment, was the second-fastest growing metro area last year. A growing market means a healthy economy and, usually, higher real estate prices. Location has a significant effect on an investment property’s return and appreciation rate.

Tenant Turnover Rate

When renting property, tenant turnover rate is an important thing to consider and will have a direct impact on your income stream. Whenever a tenant leaves, it’s up to you to find a new one.

Finding a new tenant can be a lot of work. It means having to take calls, show the property, do a credit check, pay for advertising and draft a lease. Even if the previous tenant left the home in good shape, you’ll still need to make some minor repairs, like carpet cleaning and paint.

Apartment and condo units, unfortunately, have higher turnover rates (usually every other year). With single-family homes, tenants tend to stay longer.

Of course, if the condo community offers excellent amenities, your tenants may stay longer. And if you can target people who prefer condo living, you may boost your chances of a longer-term stay.

Maintenance and Repairs

One attractive selling point of a condo – aside from its lower price – is the fact that they are low maintenance. With a condo, you pay an association fee that covers the cost of maintaining the exterior of the building.

If there are problems with the roof, the association will take care of it. They take care of mowing the grass, too.

With a single-family home, you’ll be responsible for everything. That includes the home’s exterior, the lawn, the roof, painting, landscaping, etc.

It’s much less work owning and maintaining a condo.

HOA

Speaking of the association, condo owners pay a monthly HOA fee for maintenance of the building and grounds. It also covers maintenance of amenities, like pools and gyms (another nice perk of condo living).

But with an HOA, there are restrictions – some very strict. If your tenant breaks the rules, you’re the one that has to deal with the fallout.

That being said, these same rules are what help the community maintain its image.

These are just a few of the many things to consider when deciding whether to invest in a condo or single-family home. Both can offer great returns if the right opportunity presents itself.