Home Buying in 01830>Question Details

Fw4christ, Home Buyer in 01830

I am thinking of purchasing a one bedroom condo, renovating it slowly while living there and re-selling in 2-3 years. The potential to make a decent

Asked by Fw4christ, 01830 Tue Feb 23, 2010

profit is there. My concern is that a one bedroom might not sell quickly. Secondly, the condo association stipulates that the units cannot be rented out. Therefore, I would be stuck, if it doesn't sell. Any suggestions?

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Hi there- In today's bad/low condo market, you could get a 2 BR unit for not much more than a 1 BR unit. So as you said, the 2 BR unit will sell much easier later (and at a higher price).
Definitely check out the condo bylaws; you'll need to be able to rent it out if needed. Paying for 2 mortgages can lead to ruin very quickly.
Also, make sure that anything you do within the unit is allowable under the condo bylaws as well. Anything that touches or changes the exterior of the Unit you cannot alter.
If you'd like any other help, please let me know. Thanks,

Ken L.

PS- Also make sure you aren't too loud doing renovations while people live above/ below you and all next to you as well. Not quite as easy as a SF property...
0 votes Thank Flag Link Sun Mar 14, 2010
Not being able to rent your unit can be a real problem. I wouldn't recommend buying this for that reason. If something changes in your life, or job circumstance, being able to rent your home might be the only way you could manage to make your payments.

I like the idea of building equity through updating, so long as you are, uh .... good at it. Some people shouldn't be left alone with a paintbrush if you know what I mean :-)!
0 votes Thank Flag Link Sat Mar 13, 2010
I didn't read others answers so they may have said this already BUT.... Make sure condo is in a good state regarding FHA or more than likely....you will not sell it easily or for a profit. At least in my area, condos are having a difficult time selling and have lost value.

If they have the stipulation that it cannot be rented back out that may change the pic a little but I would not bank on it making much money. Long term.... okay, IMHO, short term... not a good choice.

I would rather buy a dumpy house and fix that up but that is just my personal perspective.

Good Luck!!!
Web Reference: http://www.di4homes.com
0 votes Thank Flag Link Fri Mar 12, 2010
Look at the blog below. It shows how to see if buying or renting makes more financial sense for you. Pay attention to the amortization tables. The first 5 years kill you.
http://www.trulia.com/blog/dan_chase/2010/01/does_it_make_mo…

Expect to see house prices drop for at least 2 more years. Buying could really hurt you.
The site below shows you a lot about this.
http://www.housingpredictor.com/massachusetts.html

The record downturn in housing prices, however, is still going on in Massachusetts, but homes values aren't falling as rapidly as they were. The inventory of homes and condos has also dropped, showing that markets are on the mend. However, another wave of foreclosures projected to hit in the early part of the year will act to send housing prices lower as bankers slash asking prices to get the surplus inventory sold.
0 votes Thank Flag Link Fri Mar 12, 2010
As real estate agents we need to be cautious that we do not overstep the legal bounds of our licenses. For instance agents cannot give legal advice unless they are also a licensed attorney. Appraising the value of a property also requires a special license. That makes your question difficult to answer directly. It is ultimately up to buyers to do their own due diligence to determine if any property is a good investment and whether or not the risk of buying is acceptable to them.

A good starting point for you is to attempt to determine the current fair market value of your candidate property. One way to do this is to hire a licensed home appraiser. You can find licensed real estate appraisers at this state website:

http://license.reg.state.ma.us/loca/locaprof.asp

However, this will likely cost you several hundred dollars. As real estate agents we cannot appraise a property for you, but we are allowed to provide you with data and informatio on currently listed and sold properties. By providing a buyer with sale prices of comparable properties that have recently sold a buyer can make a more informed decision on whether the asking price is in line with the current market conditions. Many buyer agents, including myself, will do this for free. If you are currently working with a buyer's agent ask them for a comparative market analysis on the property.

If you are new to buying properties to fix and resell for a profit, I highly encourage you not to rush into it and make any rash decisions on a purchase until you have a detailed plan. Read some real estate investing books, network with other investors, and talk with accountants and finance professional, etc.

A positive thing about your plan is that if you have trouble selling it down the road, you would still be able to live there and get the utility of the property as opposed to having an empty house with no rental income on your hands. I hope that this helps.
0 votes Thank Flag Link Fri Mar 12, 2010
Another thing to consider about the stipulation that the units cannot be rented is that a 100% owner-occupied condominium complex would be very desirable to some potential buyers. It might even make financing in some situations easier for some potential buyers. Giving up the ability to rent the unit is a tough choice though.

- Rich Rosa
http://www.buyersbrokersonly.com/rosa.htm
Mobile: 978.835.5906
0 votes Thank Flag Link Fri Mar 12, 2010
I can understand that the potential is there--however, the risk is there as well since you will not have the option to rent the unit. The condo association is making an attempt to keep the absentee landlords out and property values up. Unfortunately we've seen many condo communities that become primarily rental properties, and it's usually not good.

Also, as a Haverhill native, I can tell you that location is everything, and even moreso in Haverhill. Where is the unit located? What kind of storage comes with the unit? Parking? So many variables... It may be a good investment, however, we have no way of knowing where property values will be in 2-3 years.

You are welcome to contact me with any questions about this, or other units in the Haverhill area. Take care,
Valerie


Valerie Cloutier, Realtor®
MA & NH Real Estate Services
Accredited Buyer Representative
e-PRO Certified 2008 & 2009

E: Valerie@SNHhome.com
C: 603-965-5197 (mobile/text)
O: 800-746-8448 x424 Toll Free

Innovative Realty
Londonderry NH 03053
Web Reference: http://www.SNHhome.com
0 votes Thank Flag Link Tue Feb 23, 2010
It's hard to know how much profit is really there if your numbers are based on what might happen in the future. Each condo is different. I would never buy anything that you might have difficulty selling.

When you're looking for a mortgage call me @ Salem Five Bank - the lowest rates and the best service - 781-389-8026.
0 votes Thank Flag Link Tue Feb 23, 2010
Everything revolves around buying it right.... is it the right price for the condition location and what it is..... One bedroom condos sell all the time. Yes, a two bedroom is more desirable but in many cases a one bedroom is less money.

A condo that can't be rented out does inhibit you in the future. Life changes so does the real estate market, it would be nice to retain the right to rent it if need be. Run your numbers and see if it makes sense.... of course there is also no crystal ball about where the real estate market is headed.
Web Reference: http://www.thehousewiz.com
0 votes Thank Flag Link Tue Feb 23, 2010
Hello Fw4,

Location, location, location...everything depends on location. Where are you considering your purchase?

Jessica Harvey
0 votes Thank Flag Link Tue Feb 23, 2010
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