I’m looking to invest in a residential rental property, and trying to decide between a condo and a single-family home. Which one is a better real estate investment?
As with all real estate investments, it depends—on the particular property, location, market, and other factors, such as the annual return you expect on the investment, or cap rate.
Some of the relative pluses of single-family homes over condos include:
That said, some condos are better investments than single-family homes, including the following:
If you are going to live in the condo yourself and the low-maintenance lifestyle that condo ownership presents is worth the added cost to you, you may want to buy a condo versus a single-family home. But if you are looking to use a property as a college fund for the kids, retirement fund, or additional income generator, your money is much better served looking into opportunities for single family homes, multi-family homes, or commercial real estate.
by: Matt Larson