Property Management for a Condo
Condominiums and Luxury apartments in Denver are being built at a feverish pace to keep up with the demand from buyers as well as renters. The big difference between condominiums and any other type of home is that they are built in a complex similar to apartments. The complex structure provides community living as well as amenities such as an HOA, pools, grill areas, and indoor/outdoor shared spaces. Houses usually have more upkeep associated with them, what with the yard, fencing, roofing, ect. Condominiums offer more flexibility and freedom from typical housing responsibilities and for the most part they are more affordable than a traditional home in the Denver area. First time home buyers and Millennials are also buying more condominiums, according to Denver housing statistics, mainly because the unemployment is low and Millennials are recognizing the value of buying instead of renting. With this information in mind, you may consider buying an investment property in Denver. We here at High Point Property Management would just like to share a couple points you should consider before buying the perfect Condo.
What is required to get a loan from a lender? In today’s economy there are more stringent restrictions on condos then single family homes. If you are planning to get a loan from a bank or lender they sometimes have a prerequisite of a 20-25% down payment and require you to live in the unit for a specified amount of time. If you are a first time buyer and intend to live in the home before renting it out, this shouldn’t be much of an issue. If you are only looking to purchase the condo for investment purposes, make sure you are clear on the lender’s requirements.
Investing in a Condominium
Is this a long term investment? Condo’s are shown to appreciate more slowly than a stand alone home, meaning they start to gather a significant amount of value after 5 - 10 years. There are also rental caps on some condo developments you should watch out for. Based on which condo development you buy from, there can only be a specific amount of units specified as rental units being used by investors who are not living on the property. This cuts down on high resident turnover and leaves enough properties on the open market for buyers not considering investment, just a place to call home.
How familiar are you with the HOA? A Homeowners Association, or HOA is extremely common in most condo developments especially for the Denver area. While they can be costly, it is important to become familiar with what they offer in value and the number of services they take care of on the property. The services can cover everything from water and trash to security and maintaining the common areas. If you decide to have the tenant pay for the HOA fee it is always best to roll that fee into the monthly lease rather than a separate payment to the HOA.
Who will manage the property for you? Let’s be honest, not having to worry about managing rent checks, tenants, and advertising when the property is available would be that much better for your piece of mind. So let High Point Property Management do the heavy lifting for you!