4 Concerns Before Buying a Condominium Unit To Rent Out

Besides buying a condominium for residential purpose, many purchase it to rent out as a way of investment. However, there are countless units available in the market, and to get yours having a tenant in a timely manner is not easy. Therefore, we have listed down a guideline consisting 4 topics; studying through these would help you to find a tenant faster and gain more confidence in condominium leasing.

The most important concern is in the location, not only in terms of the project’s coordinate but also the unit’s location on the floor plan. A condominium unit that’s appealing usually have some of these characters: close to a mass transit, next to the main road, near lifestyle amenities. The unit’s position on the floor plan is also critical. Avoid buying a unit close to the trash room and select one that offers a great view, perhaps on the high floors, would make your unit more attractive. Study the floor plan to know which direction your unit is facing toward is also beneficial, as you can describe the unit deeper in detail for the property seekers. For example, “the unit is facing toward the east, so the sun would brighten the room in the morning and leave the room cooler in the afternoon.”

Knowing your prospective tenant is necessary and it correlates with the project location. Before you decide to purchase a condominium unit to rent out, consider who your potential tenants are. If the condo is located near an educational institution, your tenants would most likely be students. If it is located at the heart of the city, then your targets are working people and foreigners. Knowing your target group would help you finding the right advertising channel. Broadly there are three channels to find tenants:

Make sure your rent price is reasonable by observing the same unit type in other projects. One way to have a high rent price without overstepping the standard is to have your unit furnished. Besides a higher rent price, a furnished unit is normally more desirable than a bare room; most tenants want a room that is ready to live in. In the meantime, you need to make sure the rent price is not set too low, otherwise you would earn too little as you should. If you can’t come up with an exact number, then leave it to the juristic office who has a standard price and assist you in rent collection.

Besides paying a full amount at once, you could own a condominium unit while repaying a mortgage loan borrowed from bank. In the meantime, say you already have a tenant, you could use the monthly rent earned to repay the mortgage. If the rent earned is higher than the monthly installment, then you would earn a small profit each month; on the other hand, you will be running a loss if the monthly rent is lower than the monthly installment you need to pay the bank. In this case, make sure that you have other sources of income, otherwise debts will be incurred. Before applying for a mortgage loan, you also need to pay a down payment, at least 20% of the unit price, as bank has a limited credit line.

With these four concerns we hope readers to gain more insights and eventually embodied a higher confidence to buy a condominium unit and consequently rent it out for a decent return. Every step is vital, make sure you had the best one.