Many of the investors and real estate professional have expressed negativity about investing or owning a condo in Northern Virginia area. On the surface biggest concerns many of them have is high condo fee. However, in order to understand if a condo is a right investment or not there is more knowledge to acquire before making a decision.
Analyzing if Condo is a BAD or Good investment:
1. Condo fees- Yes, they are unusually higher than the HOA fees. However, some of the condos do include utilities, fine amenities, secured access to condo building and insurance. It will be a smart idea to still carry a personal property insurance to insure your personal belongings. If you break down those expenses, you may get true cost of condo fee. That should help you if the condo fee is insanely high or an average for an area.
2. Ratios- I think this is a biggest concern and number two reason why the condos are labeled as BAD investment. If the condo has a higher investor ratio it may be non-eligible for various types of loans which could reduce the buyer pool while selling the unit. In addition to higher investor there is a risk of defaults and that could result in increase in condo fee or a special assessment. What to do about it? Get the ratio and financial health information about the condo prior to considering submitting an offer.
3. Maintenance- I think this piece contradicts over the above anxiety for some of the buyers. Buyers who don't want to deal with exterior maintenance condo could be an easy living for them. I have buyers who travel intensively for work , or seniors who have downsized to a condo to avoid dealing with annual maintenance of the home. Just like knowing the financing health, you should get details about what is covered under the condo fee. For instances windows and patio or deck maintenance could be still unit owners responsibility.
4. Competition- If you are an investor and thinking about renting the unit you should do an in-depth market analysis of the competition. Not just comparing the unit to other units within the condo building but the market saturation of the other condos available in the area and the apartment buildings that you will be competing against.
5. Location- Even though there may be a huge competition, higher ratio of investor to ownership if the location of the building is prime location it may be worth an investment in a long run. The definition of the location could be convenient to public transportation, walkability to various amenities, type of the condo building (example 55+ community and so on. Understanding what your lifestyle calls for and the renters in the area you may want to consider investing.
Bottom line: Don't presume what is a general opinion. Do you math on numbers, understand the pros and cons, learn as much as about the market and its competition both in near future and present. Discuss your concerns with your local Northern Virginia real estate agent.
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