Real Estate Investing: Single Family Home vs. Condo

From Fox Business:

If you’re considering getting into the landlord game, you might wonder whether it’s best to buy a single family home or a condominium.

Many people say to stay away from condominiums because of all the issues with homeowners associations, and they have a point. However, single family homes have many issues, too, so don’t make up your mind so quickly.

Here are several things to consider in this “Rumble in the Investment Property Jungle.”

Round 1: Investment returns

When you’re buying an investment property, the first thing you should do is pencil out your real estate deal to see if it has fair cash-on-cash investment returns. As a general rule, you’ll find that single family homes typically have lower cash-on-cash returns than condominium properties. So a fair deal on a single family home might be a cash-on-cash return of 3 to 5 percent, while a condominium might have 4 to 7% returns. The condominium will probably take this round, but every property is different, so you need to pencil out your specific deal to understand the returns.

Round 2: Tenant turnover

Every time your tenants leave, you’ll need to re-rent the property. And it’s a lot of work! You have to advertise, take calls and emails, show the property, draft a lease, do a credit check, move the old tenant out, move the new tenant in, etc. And even if your old tenant left the place in perfect shape, you still need to fix minor issues, probably paint and maybe have the carpets cleaned.
Smart landlords know that you make the most money by keeping your tenants as long as possible. Apartment/condo units typically turn over every other year, while single family homes typically have much longer tenancies of three to five years. Clear winner on this round: single family homes.

Round 3: HOA vs. non-HOA

The biggest complaint about condominiums is dealing with HOAs and HOA fees. And while there are many HOAs that are in terrible financial, legal and operational shape, there are also many that are well-managed and in very good shape. HOAs can have strict rules, and if you or your tenant breaks them, you have to deal with the fallout. But those rules also keep harmony in the neighborhood and stops tenants from parking inoperable vehicles, appliances, etc., in their yards as might happen with a single family neighborhood. No clear winner here.

Round 4: Ongoing maintenance and repairs

As a single family residence owner, you would need to schedule and handle all the exterior issues — roofing, painting, landscaping — which is going to take up a lot of your time and energy. These are all tasks the HOA would handle in a condo community. Overall, it’s much less work owning a property in an HOA — and that’s why owners pay HOA fees. It’s a condo “KO” on this issue!
Round 5: Value increase

Many people believe that single family homes go up in value more than condos, but there really isn’t any conclusive proof of that. Most real estate, in a general vicinity, is going to appreciate about the same 2 to 3% per year over the long term. So you should exclude this one as a consideration. For building wealth, forget the appreciation and instead go for the better cash flow as noted above in Round 1.
Summary

So those are some of the items to consider. Either one can be a great investment, or a terrible investment, depending on what you purchase, how much due diligence you do before your purchase and how well you manage the property. Do a lot more research and talk to property owners, and then you can figure out how you will win the heavy weight championship of real estate investing!


Read more: http://www.foxbusiness.com/personal-finance/2012/11/26/real-estate-investing-single-family-home-vs-condo/#ixzz2DMUn4CT6

SOLD IN 15 DAYS, 752 Franklin St., Baton Rouge, 225.234.0022

Incredible curb appeal on this charming cottage in Capital Heights. Shaded front yard with mature oak trees lead up to a covered front porch with swing and a recently painted exterior. Upon opening the front door, the wall to wall windows allow an abundance of natural lighting in the living/dining area and showcase the amazing wood floors. The kitchen includes slab granite counter tops, stainless steel appliances, a gas stove, and opens into the dining area. There are three spacious bedrooms perfect for kids or guests. The master bedroom has updated on-suite bath with tiled shower and large walk in closet. Dream backyard with custom deck ideal for weekend barbeques and entertaining guests. Walking distance to mid city merchants, a walking/bike path, and proximity to Towne Centre are just added bonuses to this wonderful home. Call Tim at 225.301.7467 or visit buyorsellbatonrougehomes.combuyorsellbatonrougehomes.com for more information!

752 Franklin St. 752 Franklin St.

SOLD, 3347 Nicholson Dr, Baton Rouge, 225.234.0022

Walking distance to LSU campus, tailgating, and much more is what you will find in this New Orleans style condo minutes from Tiger Stadium. Two bedroom two bath condo features granite countertops, stainless steel appliances, wood floors, and a balcony with great views of Tiger Stadium. Condo amenties include fitness center, private parking, and secure entrances. This would be perfect for a first time LSU student looking to be involved in all the fun festivities LSU has to offer. Motivated seller...Hurry and hear MIKE roar from YOUR backdoor!! Call Tim at 225-301-7467 or visit buyorsellbatonrougehomes.com to learn more!

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Capital Region 2012 home sales on pace to match '08 figures

From the Baton Rouge Business Report, Real Estate Weekly:

Three-quarters of the way through the year, homes sales in the eight-parish region tracked by the Greater Baton Rouge Association of Realtors are far outpacing sales in 2011, 2010 and 2009—and are only 1.5% off the year-to-date tally from the pre-recession 2008 sales figures. A total of 5,833 homes have sold in the region through September. That's a nearly 13% increase over the 5,174 sales recorded in the first three quarters of 2011, a 15% increase over the 5,069 sold in 2010, and a roughly 11% increase over the 5,241 sold in 2009. This year's tally through the third quarter indicates just 86 fewer sales than in 2008. GBRAR President-Elect Pat Wattam says she expects 2012 sales to match or exceed 2008 levels when the year is over. "I saw the market turn the corner last November, and what we've seen since is a steady continuation of that," she says. While sales figures are paramount, Wattam says she's also keeping an eye on another figure: the months of inventory for the eight-parish region. In September, it dropped to 6.24 months. A year ago, that figure was at 7.69, and it actually reached as high as 10 months around the start of 2012. Wattam says declining months' inventory is a clear sign of an improving market and that she expects it will continue to fall. She says a healthy market is generally one with about five to eight months of inventory. "With East Baton Rouge dropping below the eight months supply point, that means we're in a very, very steady market. It's not a buyer's market, but it's not a seller's market either," she says. "And in Ascension Parish, that number just dropped to below six months. That tells me it's flipping to a seller's market." —Steve Sanoski

This week's poll question: Do you believe the Capital Region housing market has fully recovered from the recession?

Read more from Business Report here: http://www.businessreport.com/section/businessreport0113?utm_source=contactology&utm_medium=email&utm_campaign=RealEstateWeekly#ixzz2CDYfjKYt

SOLD, 15646 Green Trails Blvd, Baton Rouge, 225.234..0022

This New Orleans style home overlooking the lake has everything and more. Beautiful wood floors throughout the large living room with fireplace along with the seperate dining room overlooking the amazing backyard. Completely covered Gazebo with a flat screen tv, swing, and a firepit for chilly Baton Rouge nights. Master suite downstairs is made for a queen with a large walk in closet, custom framed mirrors, tiled shower and much more.Kitchen features a breakfast area off to the side plus granite countertops and a large granite topped island. This home has everything you are looking for and much more so hurry and schedule your showing! Call Tim at 225-301-7467 or visit buyorsellbatonrougehomes.com for more information!

SOLD, 8922 Rue Felicity Ct, Baton Rouge, 225.234.0022

Traditional Southern home located in a quiet cul-de-sac off Old Bluebonnet! This 3 story residence features 5 large bedrooms and 3.5 bathrooms. The lushly landscaped home sits on .6 acres with a custom pool and floor cleaning system, oversized hot tub, and koi pond. Along with the pool and 2 waterfalls, the backyard includes Satsuma, fig, sweet kumquat, and orange trees. There is also a covered work station behind the boat port. Large open chef?s kitchen with granite countertops, two ovens, and brick flooring throughout. Adjacent breakfast area and game room, perfect for after school and recreational activities. His and her offices on separate ends of the house allow great privacy. Floor to ceiling windows allow tons of natural light into the formal living room along with wood-burning fireplace that is perfect for chilly Baton Rouge nights. Sunroom off the living room overlooking the peaceful oasis in the backyard. Two bedrooms upstairs with built-in desks open to the grand 350 square foot balcony. The third story loft would make a perfect media or sixth bedroom. Master displays beautiful dark wood floors with 2 separate his or her closets. The master bathroom features a new standup shower and separate Jacuzzi tub with gorgeous views of the backyard. Entire home is wired with Intercom system that plays music or can be used to monitor individual rooms. Hurry and schedule your showing today because this one won?t last long! Call Tim at 225-301-7467 or visit buyorsellbatonrougehomes.com to learn more about this one of a kind beauty.

8922 Rue Felicity Court