This is the million dollar question in corporate housing: What makes a better corporate rental, a single family home or a condo? The answer isn’t always clear because there are needs for both. However, consider these factors when making your decision:
Single family homes typically require extra upkeep and maintenance (especially if they’re older). They require regular yard maintenance, exterior painting, roof repairs, etc. On the other hand, condos only require maintenance within the unit as the upkeep of the exterior and common areas are maintained by the HOA and are part of the monthly assessment. Condos create reserves from HOA fees to manage major exterior updates or repairs (ie, a new roof).
Single family homes come with monthly costs like trash, heating, water, lawn mowing, etc., each needing to be paid separately. The good part is that some of these costs (heat, water) will fluctuate depending on the season and occupant (vacant, one person vs. four people living in the home, etc). Condos require you to pay a monthly assessment regardless if someone is living in the unit, however, most condos include heat, exterior maintenance, trash, building insurance and water in their monthly assessments.
Single family homes, no doubt, take more time to manage and require a more active, hands-on investor because there are more things that require upkeep and maintenance in a home than in a condo. For investors will little time to dedicate to the process, a condo can be a worry-free way to go.
Rental rates are generally determined by the area you live, however, if you live in a condo that is 30% investor-owned, your rate will be determined by the pack. A single family home can vary in price and cash-flow better, on average. And because there are probably more condos offered as corporate rentals, they may take more time to find a renter as compared to a single family home.
While resale value depends on the location, single family homes typically are easier to resell and hold their value over the long-term. A condo building with 500 units may have 10+ units for sale at any given time, making it difficult to sell your home at a competitive price.
These are just some considerations to make when deciding the right type of corporate housing investment property for you. Obviously there are numerous other factors too – so be sure to do your homework and take a “gut” check to find out what kind of investor you are and what type of property works best for you.