Why Buying Condos for Investment is a Good Idea

Posted by Stephanie Alexander on July 13th, 2021

It seems that more and more people are buying condos for investment in various cities from across the globe. Data suggests that many are showing interest in new condos for sale now than ever. You have heard that real estate is the best kind of investment to build wealth. However, you may be wondering why condo investments have risen in popularity in recent years.

Here, we will look into some of the main reasons why buying condos for investment may be the soundest financial decision you have made to date, and why new condos for sale may serve as the ideal place to start investing.

What is a condo?

A condominium, which is sometimes referred to colloquially as a “condo,” is an individual unit or property that is privately owned by an investor or individual within a dwelling of other suites. As such, condo owners will inevitably share many common areas, including, but not limited to, exterior gyms and hallways, as well as elevators, garages, and pools.

While it is common for condo units to be found within monolithic high-rise buildings, it is also possible to invest in detached condominiums in certain areas, should you prefer the option.

We should also note that condos tend to be far less expensive than most of the single-family homes on the market, particularly detached homes. Ergo, condos serve as the ideal solution for people who want to invest in properties that are very low maintenance, as well as properties that are affordable and that can be found in urban areas.

As such, the square footage of your typical new condo is smaller than a free-standing home or townhome in the community. This means you will not only be able to save quite a bit on your initial investment but will also need to spend far less time and money on maintenance and repairs down the road.

Condos Require Less Work and Maintenance

Regardless of whether you choose a resale condo or a prefab suite, the result is that you will end up spending less on maintenance, as well as repairs, down the line. Conversely, if you decide to invest in a detached home, then you may need to spend thousands on a few upgrades or updates before you can rent it out to recoup your losses.

If you don’t want to spend hundreds — or thousands — of hours and dollars updating your newly acquired domicile, then going with a condo is the ideal route to take.

If you opt for a pre-construction condominium, then there should not be anything to fix or update at all, at least for the foreseeable future, as it is launched onto the market as a freshly minted property.

 As for a resale condo, you may need to spend some time and money on some interior repairs — i.e., patching, painting — especially if it has been in use/on the market for several years or decades. However, you still won't have to worry about the external components of the property.

Condos are in High Demand with Renters

Most condos are built in small spaces, and, as such, tend to be far more affordable when compared to most of the detached homes that are available on the market today. For instance, while a two-bedroom house and two-bedroom condominium will yield a similar amount of rent per month, the two-bedroom condo will bring in a superior return on your investment, mainly due to its lower purchase price.

If your main goal is to maximize your return on investment, then it may be more financially lucrative or beneficial to invest in new condos in sale, vis-a-vis single-family homes.

The condo lifestyle also includes many benefits that many working millennial professionals look for. For example, most archaic apartment complexes do not include extra perks, such as a pool, sauna, gym, or tennis court, all of which may be included as part of your condo investment if you are fortunate.

Condos tend to be built near entertainment venues, such as trendy restaurants, stores, office buildings, and exciting entertainment districts, allowing busy and active people to do the fun things that they want to while also getting where they need to faster and more conveniently.

Condos are Cheaper than Detached Homes

Those who are new to real estate investment and want to see a quick return on their investment should look into condo purchases, as condos tend to cost significantly less than single-family homes.

In addition, they are just as easy to sell/flip as a conventional townhouse or single-family home, especially given how living quarters are limited, further increasing their demand. However, to optimize your return, and the probability of success, you should look into condos that are situated in bustling areas, with room for potential and growth.

In other words, certain gentrified parts of a city may yield greater returns, and your condo acquisition should appeal to as many different demographics as possible to increase the probability that it will sell at a high price.

In addition, your condo investment will likely pay great dividends in just five years. That is, appreciation rates of real estate properties in the city, as seen over the last 25 years, demonstrates appreciation rates of roughly 5% to 6% per annum.

If you are willing to wait a few years before placing your condo purchase on the market, then you can enjoy the fruits of your labour with unrivalled net profits.

Buying Condos Can Be a Great Decision

If you are new to the world of condo investments, then it would be best to speak to a real estate broker and investors in the complex that you are interested in to get a lay of the land before you put pen to paper.

You should also consider how long you intend to hold onto the property, as well as any internal or external factors that may positively or negatively impact the real estate value of the condo.