Condominiums are out of vogue. Tons of these homes are in foreclosure. Values are badly depressed. This is a golden opportunity to win instant real estate cash flow. Investors can move now to grab quick real estate cash flow, long term wealth, and properties with few support headaches. Condominiums can be a superb investment if purchased for the right price and held for the long term.
As a home owner, condominiums offer tremendous advantages. The building exteriors are not your responsibility. The landscape is not your responsibility. Often the properties offer superb amenities and location. To own, manage, and maintain a condominium is a much lower overhead activity. Instead, rely on the condominium community homeowners association to take care of most of the issues that you would normally face with any other type real estate investment. All you must be prepared to assure occurs is that the unit is rented, that you can manage any necessary evictions, that you are prepared to collect the rent, and that you have services and suppliers to maintain the interior of your unit.
Before buying a condominium, you should plan to have adequate reserves to meet the items described above including HOA fees, debt service, etc. A conservative assumption of three months reserves offers significant security. Increasing reserves gradually to 6 months full expense and debt service offers even more security but requires no immediate action.
Next, reach out to foreclosure sources. Major savings on your condo purchase exist in the market place on a retail basis. Some condominiums are trading at 50% or less than their peak values. Foreclosed properties offer an average discount of an additional 27%. Moreover, because the foreclosed unit is a condo the potential unit damages and cost to place the property back in rentable condition are much more contained than a similar single family or even townhome unit.
Finally, have your loan preapprovals in hand if you intend to close with debt. Even better, if you can approach as a cash buyer likely greater savings of 5% to 10% are possible.
In some areas, condominiums on a retail basis offer positive cash flow of 10% or more on a cash basis and 20% or higher on a debt leveraged basis. In a metro area like Washington, DC, your monthly free cash flow after expenses could be 1/3 or more of the rent or $500 plus. Investments like this are a great way to earn financial freedom in a very short period of time.
Springleaf Residence at Upper Thomson Road by GuocoLand (Singapore) Pte. Ltd. and Intrepid Investments Pte. Ltd., Near Springleaf MRT. 940 residential units.
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