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Book Review: How to Invest In Condominiums
12 02 06  12  26
-------- The Simple Way to Self-Service Real Estate
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How to Invest in Condominiums by Andris Virsnieks strongly suggests people who want to get their feet wet in real estate should concentrate on well managed and maintained condominiums in attractive areas, and have it managed by a real estate management company. The premise may sound as a no brainier to most people, but he goes deep into why that is the preferred, easier way to get started, and the one that will most surely get you to a nice net worth buildup. This is an enlightening book for potential Real Estate investors even if not comprehensive. Not for first time buyers, and certainly not the only book you may want to read if you are about to become an investor.
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The section explaining why Condominiums are the preferred real estate choice and the one comparing Condominiums vs. Stocks, Bonds, Apartment Houses, and other investments are great. If you must only read only one thing in the book, this must be it.
He is a strong advocate of purchasing properties where you can pay a management company to do handle all the hassles, and still get a good positive cash flow. Buy only if the price is right is something he strongly advocates – and not only if it is a fair price in the current Real Estate market, but if it is a price where you will be able to manage your property without too many sacrifices, or with a mounting loss that will take you years to get over with. On today’s economy, it is very difficult to achieve this, and if you follow the book’s advice, you may be tempted to avoid purchasing investment real estate property right now – which may not be such a bad idea in some situations. If you can’t manage an investment, you better purchase one you can really manage.
The book presents also the idea of upgrading your home a bit, but keeping the old one and renting it out. That is the easiest way to get into investment real estate markets nowadays. Houses have appreciated so much that it is very easy for people to have a mortgage that doesn’t represent what most people would have to get in a mortgage if they bought today. This is the first strategy we tried, and it has worked nicely. Don’t sell your own condominium, just move into another and rent the old one.
Some other important ideas discussed on the book: How to select the right condominium? Should I get into a negative cash flow situation? How to do well in those situations? Buy condominiums only on places where you would like to live. How to make sure the condominiums become cash cows.
One thing to be careful about is that the author tells his story of how he amassed a fortune in Condominium Real Estate. It is not a study based on thousands of landlords, and almost poses itself to be contradicted by a different Real Estate Investor that had followed a different strategy. I am holding in my hands another book which advocates the opposite: buy rental houses. We have to be aware that different market conditions may allow for both, and many other, strategies to co-exist. You just have to find a working one and stick to it. |
