The Portland area has a lot of investment condominium buildings or complexes that are perfect for investing whether you're looking to rent out the condominium or have it is the second home. There are tricks to buying an investment home however that differ from a traditional sale, or a home in which will be your primary residence. The first bit of information is to know what you're getting into. Make sure you're really ready for an investment. Are you doing it for the rental income or just to have a nice second property gaining equity that you can use from time to time?
Investment properties can mean different things to different people. Are you looking to build a portfolio and have rental income or simply buying a second home for yourself?
If you're considering purchasing and investment condominium for rental income purposes you need to find the right home, understand the maintenance on the property (interior and exterior) dealing with tenants, collecting rents and managing the property. It can be a lot of work but well worth the time and energy if you find an appropriate property that meets your needs and provides cash flow on a monthly basis. Having a good real estate agent that knows the area and the type of property you're looking for is extremely valuable.
Things you need to consider when purchasing an investment condo for rental purposes:
- The income can be inconsistent, especially if the turnover is high. Finding a good renter can be difficult and if you have to repair, clean or replace between each renter, it could get costly.
- Are you going to manage it yourself or hire a property manager? Property managers typically charge between 7% and 10% of the rent each month to manage the property, find a renter, organize repairs and cleanings.
- Consider all the costs. If you have to finance the investment property you will not only have the mortgage but taxes, homeowners dues on the condominium building, insurance and any repairs or maintenance that the property will need.
Related: Condo Buying Cheat Sheet
Personal Second Home
If you're purchasing a home for your own personal enjoyment as a second property there are some stipulations and requirements to financing. Unless you're purchasing the property cash out, applying for a home loan will need at least a 20% down payment or more, above average credit history and score and enough income to maintain your current mortgage, taxes, insurance plus the second home. You may also have different insurance owning a condominium in a particular area than a single-family home.
Another thing to consider when purchasing a second home is the resale value. Are you buying home because it's cheap or you buying it for future resale value? Is the home located in a risky area? Is it an up-and-coming neighborhood where values have projected to rise? All of these things take consideration and again, a qualified and experienced real estate agent will be able to help you with all of these questions.
Related Post: Buying an investment condo out of state
For more information on purchasing an investment condominium in the Portland area please contact our office at any time. We have lists of investment properties that might suit your purpose would love to schedule a showing or discuss numbers and if buying a second home make sense to you.