Real estate investors interested in Tampa and the surrounding Bay Area have a lot of options when it comes to property type. We have a lot of residential neighborhoods with single-family homes and we also have a lot of older and newly constructed condo communities.
One of the questions we’re always asked by potential investors is: should I buy a house or a condo as a rental investment?
Certainly, there are pros and cons to each. When it comes down to investment options, however, we always recommend a single-family home over a condo. Let’s talk about why.
Why You Might Invest in a Tampa Condo
Condominiums are usually more affordable than single-family homes, especially for the location. This is Florida, and condos are popular. When you invest in a condo, you’re not only paying less than you’d pay for a house, you’re also providing potential tenants with a lot of great amenities. By investing in a condo, you’ll be able to offer your tenants access to:
- Security gates or personnel
Most condo communities have walking paths and special events. You’ll find that some Tampa residents are looking specifically for condos.
Why You Might Avoid Tampa Condo Investments
Almost all condos in Tampa are governed by a condo association. This is similar to a homeowner association, or an HOA. The condo boards make all the rules for the community, and not all of them are friendly to rental properties. You might find that the association tries to discourage rentals by placing limits or restrictions on when you can rent out the condo that you buy.
Some condo communities have waitlists for turning a home into a rental. There might be only a limited number of condo units that can be rentals. If that’s the case, you could find yourself buying the condo this year but then having to wait two years to rent it out. That’s a lot of lost rental income.
Often, condo boards will also want to review the rental application you collect from a potential tenant. It can take them a month or even longer to review and approve that application. Very few tenants will be willing to wait that long to find out if they were approved for their rental home.
Finally, there’s the matter of building maintenance. Water flows downhill. What do we mean by that?
In the more than 30 years that we’ve been managing properties in Tampa, we have dealt with so many water leaks in the condo properties we manage. When your neighbor three condos above you has a pipe burst, you’ll find your unit flooded. We once worked with a landlord who had her condo unit flooded three times in four years because that upstairs unit continually had plumbing problems.
There’s also the noise factor. Condos share walls, and there are going to be noise complaints either from your tenants or from your tenant’s neighbors. We had an owner who ultimately decided to sell her condo because a condo board member kept having her tenants cited for disturbances.
Condos also come with association fees and sometimes, unexpected assessments. What you save in your purchase price can easily be eaten up by these extra costs.
Investing in Tampa Single-Family Homes
We prefer single-family homes. There’s a larger investment upfront, but you’re likely to earn more in rent. Your property will definitely appreciate faster. You might even find larger maintenance bills (at some point you’ll need a new roof). But, you have more control over your investment property. You also attract tenants who are likely to stay longer. That saves you a tremendous amount of money on vacancy and turnover costs.
If you’d like to talk more about why we recommend single-family homes over condos, please contact us at Hoffman Realty. We’d love to discuss your investment plans in the Tampa real estate market.