The nation s largest secondary mortgage market lenders, Fannie Mae and Freddie Mac, know this. They prefer not to buy condo mortgages where there are more than 25 percent rentals in the complex because the default risk is so high. If you do not plan to live in the condo, please don t buy one as a rental investment property. The reason is, condos rarely rent for enough to pay the mortgage, property taxes and condo maintenance fee. Also, condos do not appreciate as rapidly in market value as do single family houses.
Condos can be great personal residences, but they are usually lousy rental investments.
And stay away if over 25 percent of the condo units are rented, because the maintenance is often poor. Very few real estate agents want to spend their time doing much of the hard work of selling your home and being paid very little. There are a few reduced-fee franchisees, usually listed in the phone book Yellow Pages, who offer limited service for a lower fee. Some of these discount agents are very successful. Most are not.