How do I assess longer term risk of my rental condos? : ezLandlordForms

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Re 4. R

started a topic over 6 years ago

Hello All! My first post on this forum. We have had a couple of rental condos in the same condo complex for a few years. They are paid off and have been generating positive cash flow. However, I am trying to figure out if I need to sell them now and look for better investments elsewhere. The reason is the overall condition of the complex. It was built in the 60s and its infrastructure such as water pipes, sewer, AC units etc is really old and, it seems, is slowly crumbling. The condo management office lives "paycheck to paycheck", that is, condo fees (that are very high by the way since they include utilities) barely cover their expenses and so they have very little in the way of a rainy day fund. The complex already had one weather related emergency a couple of years ago that resulted in prolonged repairs involving insurance. What I am afraid of is that one day multiple such emergencies will happen that will make the condos basically unlivable for a long period of time. So not only will we not be able to collect rent but we won't be able to sell the units at a reasonable price either. Not sure how realistic this scenario is and how often this actually happens. How do I assess if it's time to sell and find a newer unit in a condo complex whose office manages their funds better? The fact that the properties are all generating income is important so it's tempting to do nothing and hope for the best. But is this the best strategy? We're in Montgomery County MD if that matters. Thanks!

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Adrien L

said about 6 years ago

I say go with your gut! Sometimes taking a risk is worth it in the end.

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Scott H

said almost 6 years ago

Make sure you have insurance that covers lost of rental income if the property becomes unlivable. The only other thing I'd watch for is if there is a large project that could come up that could require a special assessment.