A condo is a very large investment. For one, it costs a heck of a lot of money – and in many cases, your purchase will be costing you more in the first few months as you pay off loans and fix the place up. However, as property investments go, owning a condominium is a good way to increase the value of some of your equity, and if the condominium’s board of owners allows it, you could be putting some of that money to work by renting your condo out.
Like any big purchase, however, it’s important to be extremely mindful of the cons before you jump on the pros of a purchase as a reason to buy anything in the condominium market. If you feel like you’re ready to make a big property decision in your life, it’s important to know whether or not getting a condominium is really what you want – not just now, but three, five, ten years from now as well.
So let’s go over six very simple reasons why rushing to buy a condo is never a wise move, even at the sight of what seems like a great deal:
- A Condo Is A Long-term Investment
Don’t go into a condo buy thinking that the price tag you see is about as much as you’ll have to afford. Condo owners, regardless of whether they’re paying mortgage or not, still have to pay monthly maintenance fees and premiums for fire insurance, etc. It will most certainly take a little while before your big condominium purchase will make you money.
The factors that you’ll be depending on include the strength of the housing market in the near and far future, and the interest for condominiums in your area. If you’re buying a condo in order to watch its value rise for a resale later on, or to rent it out to couples and families in the area, then you’ll do best to speak with a professional investment advisor about what options are safest for you and your money.
Otherwise, buy a condo to live in it. And if it’ll make you some money in the future, great. In fact, you can mostly count on it unless your area’s housing market takes a huge dive. However, just because the value of the property will go up in a few years doesn’t mean that you’ll be watching the cash flow into your pocket a month or two after your purchase.
- You Should Be Renting, Not Buying
Just because everyone’s itching to buy doesn’t mean you should be, as well. Sometimes, it’s a whole heck of a lot wiser to pay a monthly fee to rent a condo than it is to pay out a huge amount of money and take out a hefty loan in order to own a condo – and there are a few reasons you may want to rent instead of buy:
- You’re not planning to stay in a condominium. Condominiums have minimum lease contracts, but owning a condo means owning it, period. While this means you can rent it out for a permanent passive income, renting out a condo doesn’t always mean “passive income”, and for every month you go without a tenant, you’ll be paying fees on a property you don’t even live in, not to mention the cost of upkeep outside of the building’s common area maintenance fees.
- You want to save money. While it’s a sound idea to own a condo instead of renting it if you want to be saving money in the long-term, in the short-term the opposite is true. You’ll be spending a lot more money buying a condo than you would be renting it if you’re only going to be staying for a few months, or even just a year or so.
- You may be starting a family. While it’s more than possible to raise a family in a condominium, most people would agree that it’s wiser – and healthier – to get a cheaper house or bungalow to raise your kids. Couples moving out of rented apartments might look to a condo as the next step, but the fact is that saving your money for a nice house if you’re planning to begin a family may be the better course of action.
- The Market Is Good – And That’s About It
As per Global Property Guide, the condo index in Bangkok is up a whopping 14 percent, signifying real economic recovery – and according to the World Bank, Thailand’s GDP is up again since its decline from 2012 to 2014. While the housing market may be good in some of Thailand’s current up-and-coming markets, such as its new government-subsidized economic zones and growing suburbs, that alone should not be enough of a reason for you to get into buying a condominium.
- You Could Be Buying A Lemon
There’s nothing wrong with buying a condominium – that’s not the impression we’re leaving – but rushing a condo sale can leave you with huge costs one way or the other. A “lemon” in any market is a product or property with hidden defects and problems not obvious during the sale – and in the case of a condo, not getting the condo inspected and approved first could mean you’ll be stringing additional costs onto your purse to cover whatever damages these hidden defects might bring out.
- You’ve Got Reasons, But They’re The Wrong Ones
It’s true, if you’re at the right point in your life you may be ready to buy a property and garner some equity for yourself. However, that doesn’t mean that you’re looking for a condominium, per se. Look through sites like DDProperty to find the right property for you, in your price range, with your preferred amenities – whether it’s a house, apartment, townhouse or indeed a condo.
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Condos in Singapore [cover image]