Condo vs. single family home which is a better investment in Austin?

Asked by Sue, San Jose, CA Sat Jan 26, 2013

I gather condos go for $50K-$70K and rent for $700 vs. a home might sell for $120K-$160K and rent for $1200. It seems like there is a better return on the condo vs. home.

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Eric Hegwer’s answer
Eric Hegwer, Agent, Austin, TX
Sun Jan 27, 2013
This is a great question, and one that frequently comes up among my investors.

I've got a spreadsheet that can calculate the best investment based on a number of criteria including:

Down payment
Interest rates
and a lot of other parameters

or - Give me a call if you just want to chat -

Eric Hegwer
A JB Goodwin Agent
1 vote
x, , Austin, TX
Thu Feb 7, 2013
Great advice from other Realtors below - a single family is the clear winner - especially because condos are limited in their return by other sales in the building as well as being increasingly difficult to finance.

I'm with Juice Homes in Hyde Park/Central Austin. If you have time, please stop by our Homebuyer Q & A Session on Feb. 13th at 6pm. It is a fun way to learn as you'll hear what others are asking and of course you'll be able to ask any questions of your own - no obligation whatsoever - it's a learning forum not a sales pitch!

I'll have a loan officer from University Federal Credit Union available to answer financing questions too - really important info for buying. Q & A is at Juice Homes Office at 508 E. 53rd St. #103 (53rd and Duval) on Wednesday at 6pm - hope to see you.
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0 votes
JOSEPH E JAR…, Agent, Austin, TX
Sat Jan 26, 2013
Sue, overall, a single-family home is a much better investment than a condominium. First off condominiums are the first type of property to drop price wise when the market is bad and the last come back up. Also they typically have an HOA fee which not all homes do. Also your assumption that you get a condo for $50-$70,000 is somewhat correct, however that will be in an undesirable area or in very poor condition. A condo in a decent area that will bring the proper rent will be more toward $100,000.

All in all, single-family homes trump a condominium typically, however you should also consider multifamily units such as duplexes, triplexes, and fourplexes. With a duplex for example, even if you lose the rent on one side, you have rent on the other side help support the mortgage and overhead.

Since I am an investor myself and also help many investors, I would be happy to discuss your short and long-term goals and work with you at no cost if you are not yet working with a Realtor. I also have some great lenders who will pre-approve you at no cost to you, and some great inspectors to make sure you know what you're getting into before you make a purchase. Please let me know if I may be of assistance.

Joe Jarusinsky, Realtor/Master Instructor, Keller Williams Realty, Austin's #1 Real Estate Company, Ranked #1 by Buyers and Sellers (JD Power & Assoc. 2012) Call 512-261-4415
0 votes
Susie Kay, Agent, Dallas, TX
Sat Jan 26, 2013

Hands down, single family home is a better investment. A single family is more appealing to renters and will increase in value more than a condo. HOA for a single family home will also be lower than a condo.

Although I cannot say this for all states but I know for sure even in California during the hot housing market in year 2000 - 2006 a single family home increase in value more than a condo. I used to live in CA and still have families there, some in San Jose, so I'm quite familiar with the housing market there, too.

If you ever decide to purchase a home or an investment property in Dallas, please give me a call.

Take care,

Susie Kay, Realtor®
United Real Estate
III Lincoln Centre, 5430 LBJ Freeway #280
Dallas, TX 78240

Servicing your real estate need is my priority!
0 votes
Claire McInt…, Agent, Austin, TX
Sat Jan 26, 2013
Single family is safer bet for a new investor. Single family can typically can be sold more readily. Condos have high home owners association fees and appeal to a more limited market than a single family home. Of course, location, location, location.

Claire McIntyre, Architect, Broker, Builder
MMI McIntyre Associates
Architects, Engineers, Realtors
0 votes
vivianne dor…, Agent, Austin, TX
Sat Jan 26, 2013
No, no, condos don't go for 50-70K unless you want to buy a dump. It's all a matter of location. You can get the same rent for a condo you would for a house if the condo is in a desirable location. I am a condo investor myself and the rent is $1200 for a 2/2 with a garage, nice granite counters and stainless steel appliances. However, condo fee is high, but as an investor you can deduct all your expenses. A home you buy for $120K will also rent for $1200, but it may not be in the greatest location. For a $160K home you may get $1300-1400.

So, you have to decide what type of investment is best for you. I'd be happy to discuss this further with you and should you decide to invest in any kind of property, I can also help you find a tenant.

Vivianne Dordea
Sierra Homes Realty
0 votes
Moe Paknia, Agent, Austin, TX
Sat Jan 26, 2013
Sue, always single family homes are better investments vs condos. It has to do with high HOA cost of condo, $ amount of rent vs purchase price, and the tenants that you get in single famy homes than doncos. Also it has to do with the rate of rerun on invested cash.
If you like more information please call me at 512-468-8788
0 votes
Kristee Leon…, Agent, Austin, TX
Sat Jan 26, 2013
I think single family homes are a better investment. Typically the HOA is lower and less likely to have increases as condos. Single family homes appeal to more buyers which means they attract a wider range of buyers when you go to sell the property. The rental rates depend on the area.
0 votes
Bill Austin, Agent, Austin, TX
Sat Jan 26, 2013
It is more likely that a single family home would be a better investment over a condo in the long run. Monthly rent versus the price is only one factor to consider. I'd be happy to meet and discus the analysis of both.
0 votes
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