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Is This A Good Time to Invest in a Crofton Condo?

Crofton MD Real Estate Q & A

Rent SignQ.  Is this a good time to invest in a Crofton Condo?  Do you think it will be hard to rent?

A.  There was a similar question posted on Trulia earlier this week, about buying a condo in Odenton, and several real estate agents offered responses.  This is one of those “opinion” questions, and there’s no right or wrong answer – just different perspectives, depending on the experiences of each responder.  The following answer to this question is based on my clients’ experiences, particularly during the down real estate market of the ’80’s:

In general, this is a good time to buy real estate because prices and interest rates are low.  And rentals usually go quickly in the greater Crofton area. 

There are three other things for you to consider:

1.  Buying a condo in this market may not be the best investment, since condo and HOA associations are struggling right now.   So many units are either bank-owned or simply not paying their dues…  As a result, associations may be unable to pay for routine maintenance, needed repairs, and other obligations such as management fees and liability insurance. 

It’s extremely important for you to carefully review the association’s financials when you receive your condo resale package from the property owner.  If you’re satisfied with the financial condition of the condo association, you’re not out of the woods yet…

2.  Condo financing may be more difficult for you than financing a detached home.  You can check with your favorite lender to determine if the condo you are considering is on the “approved” list. 

3.  I wrote a blog post in 2009 titled Selling Rental Property is All About the Cap Rate.  It applies no less to buyers of rental property, so you may wish to click through to read it.  This will help you evaluate the numbers, from an investor’s perspective, before you purchase any property for rental.

There’s actually one other thing to consider, as well:  Will your Crofton condo purchase be part of a 1031 Exchange?  If so, I can help you with that.  Just give me a call at 301–346–2923 or email me, using the “contact” tab at the top of this blog.

Copyright 2011.  Margaret Woda.  All rights reserved.

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