Those interested in purchasing an investment property in Illinois may originally believe that buying a single-family home is the best choice. However, purchasing a one-bedroom condo as a real estate investment can be an extremely profitable option.
The benefits of investing in a condo
There are several reasons why buyers should consider one-bedroom condos as a viable investment choice. First, condo owners are not responsible for taking care of the unit’s landscaping or for handling basic maintenance tasks, such as fixing clogged drains or repairing holes in the walls. Instead, maintenance services are included as part of the condo’s contract. This prevents condo owners from needing to take time out of their schedule to take care of any maintenance requests put in by the tenant.
Secondly, condos are typically a less expensive option than most other types of real estate, like single-family homes. For those in the process of considering their investment choices who do not have a large amount of capital to put down upfront, a one-bedroom condo may be a beneficial place to start.
Finally, one of the struggles many property owners face is finding a renter to occupy their investment. However, as opposed to a single-family home or a larger property, it is typically much simpler and faster to find a renter for a one-bedroom condo.
Making a successful investment
When buying property, there are several different steps those interested in purchasing a one-bedroom condo should take to ensure their choice to invest in this type of real estate is successful. These include the following:
- Calculate an anticipated annual rent amount—A realistic annual rent amount should include expenses for landlord insurance, homeowner’s association fees and mortgage payments. Investors should also plan on subtracting about five percent from the condo’s annual rent figure to prepare for extra repair expenses and a possible vacancies.
- Find out how many units in the complex are occupied by their owners—To ensure investment stability, it is better to purchase a condo in a complex where a high percentage of units are occupied by their owners.
- Perform a thorough inspection of the complex—Before purchasing, investors should analyze the overall condition of the complex to ensure that the property is properly cared for.
- Read through the entire homeowner’s association agreement—This will give buyers more information about what their responsibilities are as the owner of a one-bedroom unit.
Although one-bedroom condos can make a beneficial business investment, the choice to purchase one of these properties should be carefully considered. Those interested in purchasing this type of real estate may benefit from speaking with an attorney who can provide information about the current market and strategies to use during the buying process.