Condo vs Apartment: Knowing the Better Investment through Its Cost and & Facilities

REAL ESTATE INVESTING 101:  CONDO OR APARTMENT?

by Contributor

101 on real estate investing.
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(Jan. 24, 2020) — Condos and apartments are two of the most common types of real estate investments. Know which of these two are more profitable as an investment option.

When it comes to buying investment properties, you need to make a smart decision if you want to see a return on that investment. The good thing about investing in real estate is that you have so many options. The market is highly diverse that there is an opportunity with every property you invest in.

It remains true as long as you know how to manage it and the market you are targeting. But whatever property you choose to invest in can have a significant difference in terms of your returns potential.

Two of the most popular types of property for investment are condos and apartments. Most real estate investors start with this (aside from single-family homes) if they expect to have a good return in the long run.

Are you considering these two? You have come to the right place as you will learn in-depth about the investment potential for each of these properties.

Condo as an Investment

A condo, short for condominium, is one of the most popular forms of housing today. It is made of a single unit within a building. These units are sold separately and you can have your deed or title for your unit.

The Cost

The first thing you would have to consider when investing in a condo would be the fees. If you are buying a condo and would want to make money off of it, you have to consider the cost of getting that property in the first place.

The secret to a successful condo investment is to choose one that is strategically located. A good location will increase your chances of being able to rent out the property and to ensure a low vacancy rate.

But of course, you have to take into account the fact that you have to spend more on the amortization of the unit and the association dues. On the surface, there is the illusion that condos are more expensive.

In reality, they are far easier to acquire than apartments. Most condo units can be purchased with a 20% down payment requirement. Once that is paid, you can pay the rest of the package price monthly, which is easier on your budget.

The Facilities

The unit itself is private but there are common areas within the building such as the lobby, elevator, rooftop, community area, and parking, among others. Every unit owner is responsible for the maintenance of these common areas through the payment of the homeowner’s fees.

The facilities and amenities available in a condo unit will also add to the appeal of the property, which makes it easier to find tenants. The more condo units you own, the higher your potential monthly earnings from this investment.

If you are in the market for a new condo, make sure you check out the new condos in North York. To see the price list and what units are available, see here.

Apartment as an Investment

How to choose a real estate investment?
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Investing in an apartment is another common form of real estate investment. It is also one of the most lucrative, especially if you own an apartment building with several units for rent. An ideal location will also enable you to get the best price per unit so you can earn more.

The Cost

Apartment buildings are generally more expensive to acquire or build. Unlike condo units wherein you are only purchasing one unit of a building, an apartment must be built as one. It also means that you need to have a lot to build your apartment in.

If you do not already have one, you must think of acquiring a lot in a desirable location to entice more renters. The cost of building an apartment is quite steep. You have to think about the construction materials you need to get and you need to pay for the construction labor and design.

This can take several months to a few years, depending on how big or small the apartment is. This is a huge setback as compared to buying a condo wherein the developer handles all the construction and all you have to do is pay for the unit you want.

Even if you do not intend to build an apartment, the cost of buying an existing apartment building is not cheap either. You can take out a loan to pay for the purchase of the apartment and this will be very costly. It will take several years before you can recoup the investment you made on the property.

Condo or apartment – which to invest?  (Image Source: Unsplash)

Which is a Better Investment?

What is considered a good investment? In general terms, a good investment is any property you purchase for a lower price than the market value of that property. You need to consider what type of investor you are and how much initial capital you can work with when deciding on a real estate investment.

If you are a newbie investor, buying a condo is a good place to start and learn the tricks of real estate investing. The fact that the maintenance of the unit and the building itself is taken care of on your behalf, then you can eliminate the worries on your part.

The Cost

The initial investment of an apartment is higher than a condo, which makes the latter a good investment for new investors. But when it comes to potential return for investment, apartments make a case because you can rent out many units in one building.

If you can find a condo within a great location, you can position your investment as a potential source of steady cash flow. Other advantages of choosing a condo as an investment include profitable demand.

The Community

The concept of living in a condo appeals to the renter community, especially among the younger generations, making it a good investment. The rate of urbanization is also growing at a rapid pace.

You can expect that the demand for condos for rent will only grow in the coming years. If you are thinking about investing in real estate, now is the best time to choose a condo because it has a promising return potential.

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