Your FIRST Real Estate Investment: Single Family Home or Condo?

. Attention real estate investors - here's what you need to know when comparing investing in a single family home vs investing in a condo

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Your FIRST Real Estate Investment: Single Family Home or Condo?
0:18 - The real estate investors dilemma
1:07 - What’s the difference between owning a single family home and a condo
2:05 - Responsibilities of investing in a single family home as a real estate investor
3:08 - The risk of investing in a home vs in a condo
4:40 - Getting the most value out of your real estate investment
5:10 - Why real estate investors think it’s easier to start investing in a condo
5:50 - The best way to start as a beginner real estate investor
6:30 - The value of insurance in real estate investing

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The Minority Mindset has nothing to do with the way you look or what kind of family you're from. It's a mindset.

Give the majority $200 and they will come back with a pair of shoes. Give the minority $200 they will come back with $2,000.

Think from the mindset of a consumer and be the provider, that's the Minority Mindset. Don't be the majority. #MIH #ThinkMinority

Twitter: @M2JaspreetSingh
Personal Instagram: @M2JaspreetSingh

This Video:

Video host: Jaspreet Singh

[rthom]

As a first time buyer, I also thought condos would be less of a headache so was leaning towards them. But I ended up cancelling the deal because the HOA's financials were horrible. They literally had less than $1, 000 in their reserves and no budget. Speaking of which, can you do a video on how to assess a condo or the HOA and it's finances?

[skylinec]

I’ve rented out condos, townhomes, and multi family. I’ve had “cool” HOAs as well as the strict PITA ones.

Not mentioning the money that goes into being in an HOA for Monty dues, fines, and special assessments, the level of frustration, time, and energy that goes into dealing with HOAs (even the cool ones) makes me want to avoid any investment with an HOA FOREVER.

For all the talk of having your own business and freedom of being your own boss, nothing destroys that notion when you have to deal with a HOA or member on a power trip.

[alfredor]

Single family home all day. I owned a condo for 5 years that was about 30 years old, with original exterior paint and asphalt. The HOA were thiefs and didnt really update anything except the patio fencing, meanwhile the apartments next to the community get updated and painted differently every 5 years or so. Screw condos and thief HOA companies.

[peterr.]

I think it also depends on how high your property taxes are in your area. At least by me, property taxes are much lower for condo's than they are for homes. This often completely offsets HOA fee's. Also, condo's cost less and can be a better foothold for investors who are just starting out.

[timontran]

I appreciate Jaspreet's humor. This channel is amazing.

[pit]

2 of my 3 rental properties are condos. I include the HOA fee in the rent. Just be up on the bylaws and ensure you’re abiding by them as a “landlord.” My 1st condo was actually my primary res. I started renting it out in ‘08 and wasn’t til ‘16 (when i got serious) that I bought another condo but this time for the sole purpose of renting out.

I like both (condos and single family) but on the SF just wish there was an HOA so the durn grass could be cut! The spring and summers in GA will have you cutting grass 2x a week.

[georgerobinson]

Great video. We all strive for financial independence and better life. It’s not difficult in achieving this through the right investment, living frugally, and budgeting. I’m glad I learned early in life to work hard for financial freedom

[jessicamackeyhomeagain]

I feel like you're gonna make me so much money in the future from me watching all these videos... so you're the only youtuber I watch the ads for. Give a little, get a little. Saving up for my first real estate investment now!! Mogul status here I come, thanks to Jaspreet!!

[bigchev]

HOA also like to do a "Special Assesment" where you have to pay additionally for repaires outside of HOA fees.

[larcm]

I'm so glad I watched this video. I was thinking of buying a condo to rent out. But now I will buy a single family home

[LuigiFan]

Townhouse is the way to go. You can have multiple tenants pricing double or triple the income compared to a single family home or condo

[NHBob]

I was just introduced to your channel this week so I am behind a bit. I have been enjoying your videos, but I feel this one comes up short. If you don't actually run through the numbers between a condo and a single family home you can't develop a true cost and ROI. When looking at a condo there are several things you failed to mention that are important. There are 2 types of condominium styles, garden and townhouse style. Garden style are like an apartment complex and townhouse style are like single family row homes, we live in a townhouse style with a walk out basement with a patio and green space. Condo associations are governed by their documents which you should review before purchase. This will tell you what you can and can't do. The condo association also has its financials available which will tell you what all they pay for, and most importantly what the Reserves are. The Reserves are there to pay for capital improvements and repairs. How much should be in Reserves will depend on how old, or recently the various major systems have been replaced. For example, a roof is a big expense for either a condo or house, if the roof has recently been replaced the Reserves will be down and need to be rebuilt, but this is an expected cycle. BTW the cost of replacing a roof on a condo will typically be less than a free standing home since there will be shared surfaces when it's a condo, the same for siding. In the case of siding, because there are shared walls "our portion" is the front and back, with shared sides. The HOA is a tax deductible expense when an investment property because it is classified as maintenance. With a condo many of the expenses are shared expenses so they are lower than a stand alone building. Another shared expense is homeowner's insurance - the Master Policy which is another cost saving item. Condo associations are run by elected boards, and managed by professional management companies. A good management company will save money for the association through their relationships with vendors that do the work. When you own a single family home you need to deal with all of this yourself, or hire a management company which is an added expense of the single family home. Finally you need to factor in the rent revenue differences. In our area the difference between rents are not that different, but there is a big difference in purchase price that goes against single family homes. In both options you have to analyze future expenses related to when systems will need to be replaced.

[markgaterbondifinancialguy]

I slowly bought all the condos in a HOA. The 27 apartments bought individually cost about $2.2 million less than the appraised land value because the HOA had not maintained anything properly.

[siddhantr.s.]

Great info Jaspreet. I would appreciate if you could make a video on single family houses vs duplex/multi-family / townhouses. Thanks!!

[joefisher]

I freaking love your videos! You're doing a great service to humanity!

[szuberi]

I prefer condos. They are more affordable in price and you have more options when it comes to renting or selling.

[Nsingh]

Anywhere in Toronto and the small towns withing the 30-40 min range east west north or south. The houses are close to one million, but outside of this area still around 300, 000 grand. Condo maybe better idea.

Btw, I read an article the recession is coming soon.

[ReimuandCirno]

There's not really a clear-cut answer, it depends on exactly what and where you're buying. Condos do have HOA fees, but these go toward things you would have to spend money on anyway. The association might be able to negotiate better prices for these services than an individual homeowner could. HOAs typically have a reserve fund to cover expected costs of repairs. If you're an individual homeowner, you should also set aside money routinely in order to afford repairs (roofs for example have an expected life of about 15 years, most people take out loans to pay for them because they didn't save).


Condos have certain location advantages, depending on what you're looking for. They can be found in central urban locations, within walking distance of local establishments like nightclubs. They could make for an interesting opportunity to rent out as a vacation rentals rather than to long-term tenants.


But the HOA could be poorly run, be burdened with bad finances, etc. Should you invest in one? The answer is: it depends.

[johnmike]

I had a house in Texas. The HOA has it out for the developer. Constantly raising the HOA dues for “stuff”. They were really saving money to sue the developer.

Pro tip: in Texas if your HOA is in a law suit, you can’t sell your house till it’s done and you could’ve on the hook for legal fees.

[raph]

I've had a couple of friends who had lots of problems with condos, so I'd probably aim at a house.