January 12, 2020
|
Post type:
Industry & Regulations
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Author:
Boris Mordkovich

Condo vs. Free Standing Property For Your Airbnb - Pros and Cons of Each

Condo vs. Free Standing Property For Your Airbnb - Pros and Cons of Each

As people consider which property to get for their short-term rental, they’ll inevitably come across two types - a condo or a free-standing house (e.g. single family). In this article, I want to talk about the positives and negatives of each type, as well as explain why we never go for condos ourselves.

Condo:

Pros:

  • Low maintenance - there’s a management company already in place, so if something breaks, you always have someone to call.
  • Good locations - it’s easier to find a condo in or close to downtown areas vs. a single family house which tend to be a little further away. Although not always.

Cons:

  • Extra cost - the condo fee can be quite high and take a significant chunk out of your cashflow
  • Tend to be smaller - we typically prefer larger properties, whereas condos typically tend to be smaller (1, 2 or 3 bedrooms). Although not always.
  • More susceptible to complaints from neighbors - you tend to be closer to your neighbors and, oftentimes, they do not like if there are short-term guests coming and going so close to them.
  • More restrictions - as there is a homeowners’ association overseeing the entire property, you typically will find more restrictions imposed on you.


Free-Standing Property:

Pros:

  • More control - you have more control over your space and do not have to answer to an HOA
  • No HOA expense - this can improve your financial bottom line.


Cons:

  • More maintenance  - when something breaks, it’s on you as the property owner to find a solution. It can be a bit stressful for new homeowners.
  • More susceptible to complaints from neighbors - you tend to be closer to your neighbors and, oftentimes, they do not like if there are short-term guests coming and going so close to them.


What’s Our Take?

Personally, we strongly prefer free-standing properties for several key reasons:

1. We do not want to put ourselves in a situation where the HOA decides that it doesn’t want short-term rentals. 

2. Over time, we’ve begun to focus more on larger properties and those that need more work which brings us to free-standing multi-families as the preferred type.

Can you be successful with a condo as a short-term rental? Absolutely - plenty of people do it and see fantastic returns. However, it’s worth thinking through the pros and cons before you determine which one is right for you.

If you have any questions, feel free to email us at hi@buildyourbnb.com. We would love to hear from you!


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