New investment home or condo? what area is best?

[skudr248]

Hey guys,

So just wanted a few peoples opinions and thoughts about what area is best to buy in for an investment type purchase before I go ahead an get a realtor. My family and I haven't quite decided whether a new/newish home or condo is best to flip a few years down the road, family member will be living in it. So far we decided that our budget would be within the 325-400K range, preferably 3bdrms, 2+bath, and would like to stay inside the SE/SW range of the city. Home/condo would have to be quite new and would need a developed basement if it were to be a house. What area's do you guys think is best to purchase in, we have looked at Auburn Bay/New Brighton/Mahogany for example, but still very undecided, is there a better time to purchase? new process for us. Thanks for all the input!

[troutman]

Location, location, location.

My condo in Hillhurst appreciated $100K in 4 years. I don't think condos would do as well as houses in the suburbs.

[Jbo]

As somoeone sho has owned both a house and a condo, my personal recommendation would be a house. Condos have a number of factors that can be a concern.

1) New developments tend to have no reserve budget and get hit with special assessments. Ex. I have been hit with a few thousand dollar assessments a couple times. Older buidlings have reserve budgets, but also have higher risk for things like roof/foundation repairs.

2) Condos tend not to increase dramatically in value, but also tend to decrease quicker.

[Table 5]

What type of investment is this? Are you looking to rent? Or will you be living it in?

Personally, I would look for something that you can maximize in terms of renting, as that market is crazy at the moment and doesn't appear to be subsiding anytime soon. That typically means more inner city than what you're looking for, so you can cater more to the downtown worker crowd. To me a community like Auburb Bay/New Brighton will never be that attractive for many renters unless they work at the new hospital. And if there is ever a crash, that's exactly the type of area where things will go south first.

If I wanted it for rent, I would buy a condo in the inner city. You can get a decent 2 bedroom for 300k in the Beltline, and your rental income will more than pay for itself. I'm pretty sure I could conservatively rent my current place out for $200/300/month more than what my mortgage/condo fees etc are. So having someone pay off your mortgage while also giving you a few hundred dollars a month is pretty nice....and that's without any mention of your property value rising.

[Travis Munroe]

There are so many factors involved.
I have a couple of clients who have some extra cash and want to buy a rental. I know the exact complex I want to put him in which is not inner city but will fetch $1500+ a month for rent with a mortgage, taxes and condo fees being under $1250.
As you move inner city the prices go up but so does your rental potential. Assuming the market doesnt fall apart a 400k property will appreciate more than a 200k property (generally speaking).

If your looking to flip within a few years I would suggest inner city. Condo/Home...whatever suits your lifestyle more. I dont buy into the concerns over special assessments as a condo document review can help prevent a large SA and spending a few thousand over a few years isnt all that bad when you consider the potential for having to replace a furnace, roof, hot water tank, windows, etc on a home!

[I-Hate-Hulse]

1) New developments tend to have no reserve budget and get hit with special assessments. Ex. I have been hit with a few thousand dollar assessments a couple times. Older buidlings have reserve budgets, but also have higher risk for things like roof/foundation repairs.

Stuff breaks on a house too. The maintenance on a house is significantly higher, especially on something you want to sell in a few years. Family is especially good at shirking duties like painting fences or landscaping.... There is way more stuff to maintain on a house vs a condo.

[mykalberta]

As I have recently been on the fringes of a recent sale of a house in the burbs but north of Anderson road.

With a home be aware of a few things.

1 - tenants will ruin a home. When you go to try to sell it you will have better luck leaving it empty for buyers to see than with tenants. I know when I was looking for a house in April any and all houses we say that had tenants were the worst houses we saw. You walk in and you instantly want to turn around and walk out.

2 - their rental income did net them a few hundred a month but it didnt seem like it was worth the hassle that came with the ongoing maintenance.

If you are looking for a home as a revenue property, find a suited home with a separate entrance. Also I wouldnt bother doing any improvments to the home before renting it out as again, tenants will just ruin it.

Personally I would go with a relative inner city condo. It really depends where you think the market will go. Its hard to believe that prices could keep on the pace they have the past few years so if you are thinking if buying to flip in 5 years you have to hope that prices rise faster than what the relator+legal fees would be.

Since I lived in a condo for 7 years I will say watch out for condos simply because the majory are run horribly inefficiently and like with all things, the squeaky wheel gets the grease. The condo will be almost forced to pay for things that only one person brings up simply because not enough people attend the board meetings.

I sat on the board for 1 year and it was one of the most eye opening experiences I have ever had. To see the entitlement that some people have when it comes to common property is mind boggling.

[troutman]

I sat on the board for 1 year and it was one of the most eye opening experiences I have ever had. To see the entitlement that some people have when it comes to common property is mind boggling.

I've seen condo board meetings get monopolized by one person complaining about their $50 problem, when every owner is paying $500/month in condo fees.

[onetwo_threefour]

I know a few people that buy downtown condos furnish them, and then market as executive rentals. It's a bit of a niche market, but they do well and it seems to be a fairly large niche

I know you said a family member will live in it for awhile but if you buy in the right spot, that could be a followup use.