Condos, Apartments, or Houses - Which Gets You The Biggest Return On Investment?
Are you interested in getting started with real estate investing but you can’t decide if you should invest in condos, apartments, or houses? If so, you’ve come to the right place!
Real estate continues to be one of the best investments to make because you can earn passive income from your rentals every month while building equity.
Even though real estate investing is a smart move, the reality is that you can also lose money fast if you’re unprepared for the upkeep or costs.
In this article we will provide you with a breakdown of which properties make the biggest return on investment.
Should You Invest In A Condo?
The first type of property that we’re going to look at is the condo.
In 2021, you can find condos almost anywhere in the United States. They are typically part of an HOA so owners don’t have to worry about landscape maintenance, roofing, or repairing other ‘communal’ areas.
Condos are in most cases easy to renovate and keep in good condition but they can also come with problems. Since condos share at least one wall, there may be the occasional clash with neighbors or overlapping maintenance issue such as a widespread leak.
Maintenance can become an expensive problem for condos, especially when it comes to pest control or plumbing.
Cost is certainly a reason to consider investing in a condo because, in 2019, the average price of a condo in the United States was about $30K less than a single-family home. (Source – Quicken Loans)
Before investing in a condo, make sure you research the history of the unit to find out who has managed it in the past. You want to have confidence that you can rent the property immediately and not be faced with having to invest more money just to get it in rent-ready condition.
Are Houses A Smart Investment?
Let’s face it: most people enjoy living in houses because there’s nothing like coming home to an actual house, but are they good real estate investments?
Houses are smart investments that they can be found everywhere across the United States. This presents a huge opportunity for investors who are just getting started and don’t have an existing portfolio in a specific location.
For example, the median list price for a home in Arizona is close to $323,000, while the median list price for a home in California is $712,430. This difference in cost represents an opportunity for the real estate investor who may not be able to afford to buy an investment property in California but can afford a property in Arizona.
What About Investing In Apartments?
The last property type to potentially earn a return on investment is apartment complexes (multifamily properties).
Like condos, it’s possible to find apartment buildings in most cities around the world. Their construction has increased dramatically in the last 50 years.
Multifamily properties can be more costly to invest in initially because you’re purchasing more than one unit but having multiple units under one roof means that they can also be easier to maintain and manage.
With all of your units in one location, you can focus on sending one maintenance team to one address, rather than sending multiple maintenance teams to your various properties around town when they need repairs.
Return on investment can be higher with apartments because even if you have one vacancy, you can count on continuing to earn income from your other occupied units.
The key to success with owning a multifamily property is hiring an experienced property manager because this will save you the time of having to manage the property yourself and help you to earn passive income from the property.
Also, make sure that you do your due diligence before investing in multifamily. This includes viewing the current rent roll, property taxes, and expenses for the property, just so you can confirm that it will make sense financially.
Contact GoldenWest Management
At GoldenWest Management, we specialize in providing property management services for investors who own houses, apartments, and condos nationwide. We have almost twenty years of experience managing boutique portfolios across the California, Nevada, and Arizona areas.
To learn more about the property management services that we can offer you, contact us today by calling (866) 545-5303 or click here to connect with us online.
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