Author Topic: Rental income or avoid ridiculous monthly HOA  (Read 2251 times)

LizzyBee

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Rental income or avoid ridiculous monthly HOA
« on: March 07, 2013, 09:16:55 PM »
My husband and I currently live in a condo in a desirable neighborhood. We want to pay it off in 5 years, move, and then rent it out. We could get $1600 a month for our place, but the HOA fees are $375-$460 a month (it includes heat, water, and garbage so the HOA fee is higher in the winter while we're using the heat). The HOA fees will eat up some of our profit so is it really worth it? Should we sell and find a condo or home with lower fees to rent out? We've put a lot of time and some money into making our condo really nice. It has a new kitchen and master bath and cherry floors so it would rent really quickly, especially given the location. Other condos may not rent out as easily.

Another Reader

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Re: Rental income or avoid ridiculous monthly HOA
« Reply #1 on: March 07, 2013, 09:28:03 PM »
What is the condo worth?  If you did not own the condo already, would you buy it at the current value to turn into a rental?  If you were to sell it and take the hit on the selling expenses, could you find another investment that would provide a better return?  How difficult would it be for you to carry the condo if it were vacant and needed repairs while you were paying another mortgage?

These are some of the things I would consider in making the decision.

LizzyBee

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Re: Rental income or avoid ridiculous monthly HOA
« Reply #2 on: March 08, 2013, 11:59:48 AM »
What is the condo worth?  If you did not own the condo already, would you buy it at the current value to turn into a rental?  If you were to sell it and take the hit on the selling expenses, could you find another investment that would provide a better return?  How difficult would it be for you to carry the condo if it were vacant and needed repairs while you were paying another mortgage?

These are some of the things I would consider in making the decision.

Those are good questions. The condo is worth $215,000, but we bought it at $155,000. Our mortgage is 138,500 right now. I don't think we would buy the condo at it's current value since we would make less of a return at the higher buying price. I am not sure if we could find another investment with a better return. I have to do a lot more research on the rental market here in Denver. Considering we won't be ready for a couple more years, we have some time to think about your questions. Thanks for your help!