The main purpose for buying a condo is to have a place to live for themselves and their loved ones. The good thing is that many individuals have begun to recognize that buying from the top condos in a particular location may serve as a great real estate investment option that generates long-term income.
As you purchase a real estate property, especially a condo unit, you will have both a primary residence and an investment property that generates income either through passive income or by flipping the entire unit for a greater price. Read on to know more about the three (3) most common ways to earn through real estate.
Passive income through condo ownership
Generating passive income in real estate typically takes the form of long-term residential rentals, which entails purchasing a property, specifically a condo, and renting it out to tenants. Furthermore, running rental properties can be an incredible resource of monthly cash flow, and yet keep in mind that being a condo owner is not a completely passive way to earn income, as it requires consistent effort.
1. Short-term rental
In today’s world, short-term rentals are the most appealing and evident option for travelers. It can provide a more comfortable and arranged ambiance than a hotel generally does. If your property is in a popular vacation destination, a short-term rental property is an excellent way to produce passive income.
2. Pre-selling and Re-selling
If you own a condominium unit, pre-selling and re-selling are common strategies to create passive income in real estate. For developers, pre-selling implies marketing their units to buyers before the condominium’s development process begins. This means that condos are sold before they are finished, and developers can compensate those who buy their pre-selling units by allowing their first pick from their inventory of properties. Buyers must, of course, select the flats with the best possible location and amenities.
Real Estate Investment Trusts allow the public in general to acquire shares in real estate properties such as houses and lot, rent to own houses, residential complexes, and other huge properties without needing to spend significant amounts of money or manage the everyday operations of these companies. Small investors, such as overseas workers and ordinary middle-class people, can engage the real estate market with little money by using REITs.
A condo is a tangible and stable investment
Somehow you’ve heard the old saying that seeing is believing. This statement may be applied to certain events in your life, such as choosing a condo as a real estate investment. In contrast to seeing markets go up and down on your phone, you can barely touch, or decorate the walls and furnishings in your condo. More significantly, you as the condo owner and your family may live and function in the condo. The more you invest in a condominium in a city, the more you will gain from your condo.
If you would prefer to reside in a city, for instance, your area is where the airport is just a few streets away or 15 minutes away! As a result, it is great for regular travelers and professionals that want or need to fly. It’s a doorway to unique experiences and meeting individuals from various walks of life. You may visit the neighboring provinces, which are only a boat or vehicle journey away. Without a question, a condo is one of the best methods to invest in during the epidemic since they are steady and crisis-proof. They are long-term investments that can grow in value over time and are less unstable than other investment possibilities.
Pros buying a condominium
Condo owners may encounter some advantages in condo ownership that renting does not offer.
1. Across the globe, rents are continuing to increase. The majority of your housing costs are frozen when you buy a condo with a fixed-rate loan.
2. Owning a condo allows you to generate income through home equity.
3. Condo owners may be able to obtain tax savings that renters are not.
Homeownership is one of the most important methods for individuals and families to maximize revenue. Much of the country’s home values are continually increasing. As a condo owner, you have an asset that is increasing in value year after year. When investing, you will most likely gain more money than you invested.
Furthermore, condo owners do not have to worry about costly structural repairs or building maintenance. Exterior maintenance is handled by the homeowners association (HOA). (However, you will have to pay monthly HOA dues for this convenience.)
Cons of owning a condo unit
Although condo ownership will bring you good benefits, there are still drawbacks in owning one. It’s good to know about them before you purchase your condo.
Whether you’re buying or selling a condo or a single-family home, there are major expenditures involved. A down payment of at least 3.5% is required when purchasing a condo. A traditional loan requires a 25% down payment if you want the lowest interest rates and lowest monthly payments. Closing costs, which can be 3% or more of the loan amount, must also be paid by condo buyers.
In addition, homeowners must consider monthly fees such as property taxes and insurance. When you rent, your sole upfront expenditure is a security deposit, which is typically equivalent to one month’s rent. This can make renting more accessible to anyone who does not have a lot of money.
Start investing in real estate through affordable condominiums
Have you decided if you’d like to be a home owner or a real estate investor? Finding the right property for your needs is crucial whoever you decide to become. Just make sure to look fo a property that suits your needs and give you the best value for your money since real estate property purchases usually deals with big amounts.
Check out Asterra, a condominium brand which could answer both your homeownership and investment plans in real estate at an affordable price. Asterra is currently on pre-selling which could mean an advantage for you. Visit Asterra website and its official Facebook page for more details.