With the recent changes in the real estate industry in Bukit Batok EC and an increase in the number of people buying condos, you may be wondering if investing in a condo is right for you. In this article we’ll cover some of the basics to help you decide if it might be worth your while.
What Is a Condo?
A condominium (also known as co-op) is a housing unit that shares common amenities with other units. While this sounds like a great idea for saving money on utilities or even just having a place to hang out when you aren’t home, there are many things to consider before deciding to buy a condo.
There are three main factors to look at when considering whether to purchase a condo:
The cost:
The average price of a one-bedroom condo in New York City is $1,300 per month. If you live in California, the median rent in San Francisco is $4,700 per month, so you can see why it would make sense for someone who lives in the city to invest in a condo rather than pay the high rents.
Location:
Location is one of the most important factors when purchasing a property. You want to ensure that you will have access to transportation options, schools, restaurants, entertainment venues, etc. When choosing a location you should also think about how far away from your job you want to live. Will you need to travel back and forth to work every day? How long does it take to get to places you enjoy going?
Community:
A condo isn’t only a house—it’s a community. This means that you’re part of something larger than yourself. You will likely share your building with people who are similar to you, and they may have different interests than yours. This can lead to interesting conversations and friendships!
When considering whether or not to buy a condo, take time to do research on the area and consider what you want out of your investment. It’s better to find out too late that you don’t want to be in a particular neighborhood than to discover you were wrong all along.
Before you start shopping around for a condo though, we suggest checking out our list of resources and articles to learn more about condominium investing.
Should I Buy a Newly Built Condo?
While owning a newly built condo is usually more expensive than renting a pre-owned apartment, it can still be a good option depending on your circumstances. There are two main advantages to buying a new condo:
You can customize your living space: If you have a specific design in mind, or you know exactly how much square footage you want in your condo, you can go ahead and purchase a brand new one. Some developers offer incentives such as free upgrades, which can allow you to upgrade your kitchen or bathroom without having to pay extra fees for improvements.
Your condo has been freshly painted: If you buy a new condo, you won’t have to worry about mold or mildew growing in your walls! Also, since you’ve purchased a brand new condo you can rest assured that any damage caused by water leaks or faulty wiring is covered under warranty. This is especially important if you live in an older building where repairs are difficult and expensive.
If you’d prefer to buy a condo that already exists, however, you should weigh the pros and cons.
How Do I Know if a Condo Is Good Investment?
Before you spend any money on a condo you should first consider what kind of return you’d expect to receive. Here are some ways to figure out how much you could potentially earn off your investment:
Investment Return:
If you invest in a single property, you can calculate what percentage of the value of that property you could potentially return. For example, if you bought a 10% down payment loan on a condo with a market value of $500,000, you could expect to have $50,000 returned after paying back your loan and closing costs. To determine how much money you could possibly recoup, divide the amount of the loan by the total mortgage value of your condo. So if you invested $50,000 into a condo with a loan value of $500,000, you could expect to make a profit of 20%.
Interest Rate:
Interest rates affect the overall return on a condo. As interest rates rise, the amount of money you could potentially make off your condo decreases. In order to calculate how much money you could expect to make off your condo each year, take the annual rate of interest and multiply it by the years you plan to own your condo. For example, if you plan to hold onto your condo for 15 years, then divide the interest rate by 12. That way you can estimate how much money you could potentially reap off your investment after taking inflation into account.
Inflation:
The last factor we’ll discuss today is inflation. Inflation refers to the general rise in prices over time, and it’s a big concern for investors. As inflation rises, the return on your condo diminishes because your dollars aren’t nearly as valuable as they were before. This makes it harder to recoup the money you invested and increases the likelihood that you’ll lose money instead of making money.
We hope this information was helpful! If you’re interested in learning more about investing in real estate, check out these resources:
- Real Estate Investing 101 [Broken URL Removed]
- RealtyTrac
- RE/MAX
- Realtor.com
- Zillow
- Yardi
- Yahoo Finance Real Estate Guide
For more information on investing, check out our post on the best sites to watch stock prices. Happy investing!
