International Purchaser Decision- Should I buy a house or a condo?
Thinking of buying a vacation home in a foreign country? More and more people with enough savings to buy a second home are opting to invest in real estate in tourist destinations in a foreign country. However, as an international investor, there are many questions you’d want to ask before you shell out your hard earned money for a new home. What do you buy? Do you buy a house or a condo? If you haven’t decided until now, we may have some tips that can help you on the decision making.
Buy on the basis of higher rental income
If there are no restrictions imposed upon you as a foreign investor, you are free to choose the best option, in terms of real estate investment. As your main objective is to earn rental income, it doesn’t make a difference whether it is a town home or a condominium, provided it fetches a high rental income for you. However, there are many other factors that you need to keep in mind when buying a property in a foreign country. While most celebrities and wealthy businessmen prefer to buy independent houses and mansions, there are some like artist P. Diddy who loves to live in an apartment on a high rise building. Other stars such as Adele, Tom Cruise, Kim Kardashian, Britney Spears, LeBron James, Adam Levine have reposed their faith in villas and mansions.
It is the location that is crucial for your investment
It is of lesser significance to your tenants whether you have a house or a condo since what is more important for tenants is if the residential unit is close to all modern amenities or not. Before buying a property, check on its location. Do not buy a house even if you are getting it at a lower than market value price, if you will not be able to rent it out easily. This will lead to, having to reconsider the rental amount, which will compromise your goal of earning a higher income.
There are recurring costs associated with condos
Condominium owners are required to pay condo maintenance fees annually. This fee may run a few hundred dollars or even more depending upon the shared amenities provided by the Condominium Association. There is no such fee payable to house owners.
Compare the price rise of houses and condos
If you have finalized the location where you are buying property, the next thing to do is to compare the trend of price rise of condos and houses in the area. This will give you an idea of the kind of appreciation in value that you can expect in near future or in the long run. After all, you expect a decent return on your investment, don’t you?
Set your attachment to a piece of land aside
With a house, you own the piece of land over which it is constructed. In the case of a condo, you do not get to own the land. If you are attached sentimentally to owning the land and the house, it is better to go with a house than a condo. Though the good thing about condominiums is that they are usually placed in the center of a business area, where there would be more possible lessees.
A good thing to keep in mind is that condos start to lose their value once the market starts to go down. In comparison, house prices remain largely unaffected by any downtrend in housing market conditions. Take a decision in this regard depending upon your unique circumstances, but always remember “Location is key.”