Let us talk about condos!
Whether you are downsizing, purchasing a second or vacation home, or just moving to the Valley of the Sun, condos provide a stable, more affordable style of living.
However, there is a lot of confusion when it comes to buying condos, which means that buyers do not always come out ahead on their purchases.
In Scottsdale, Phoenix, Mesa, Tempe, or throughout Arizona, condos are a great alternative to rising home prices, and they can either be a very sound investment, or a complete disaster. Condos also offer you a “buy into” some excellent locations (in real estate we call this… Location. Location. Location) such as Old Town Scottsdale, McCormick Ranch, Arcadia, The Biltmore, Kierland, Mill Ave and Tempe Town Lake, North Scottsdale, Downtown Phoenix, North Central Phoenix, near Scottsdale or Paradise Valley and so on at a discount price compared to single family home prices in those areas. For example, let’s look at Paradise Valley, Arizona. 85253 zip is the wealthiest zip code in Arizona. Just off Scottsdale Rd you have available condos priced in the mid $100K, steps away from million & multi-million dollar homes.
Condos also provide amenities such as gyms, carpools, walkability, parks, get together and meet up events, and a more active and neighbor friendly lifestyle. Are you aware of the insane perks these new luxury condo developments are offering? Holy shiznat!
#1. Always Think Long-Term, not Short-Term Value. Never lose focus.
Yes, condos generally appreciate in value. That’s true of any piece of property—as long as it doesn’t have wheels or come from a trailer park. But, if you’re trying to decide between a condo or a house, keep in mind that a single-family home is usually going to grow in value faster than a condo will. That’s just facts!
Many buyers and sellers do not understand value in real estate. In simple terms… a home’s value depreciates; the land value appreciates. The truth of the matter is that a house is a diminishing asset! That sounds weird doesn’t it? Let me digress… in terms of your home, the actual structure goes down in value over time. The land is what appreciates. Think about it for a second… Pretend you bought a home in Arcadia in 1970 and it was one of those gorgeous amazing Frank Lloyd Wright houses of tomorrow with all the bells and whistles of the time. 50 years later, what do you think that house looks like? Well, let’s just say it looks like it is ready for the bulldozer. Now anyone who bulldozes a Frank lloyd Wright, or any famous architecture design home is an idiot in my eyes.
Even the nicest of condo buildings get old over time. If the building becomes ugly and crappy over time, there’s really no recourse because when you buy a condo you are making an investment into that building. Many times, one must dig a little further and investigate the HOA, HOA funds, who manages and how. The HOA is who keeps the building up to date and every 10 or 20 years the HOA should do major renovations to keep up with the times and keep the building functioning.
When you are spending a lot of money you should always make a wise investment that can earnyou money in the future, instead of settling for something in the short term. A wise condo investment is one that generates income when you are not occupying. You should consider Airbnb, short term, or seasonal lease terms. It’s the only way you will recoup money in a short-term period.
When considering your future investment (9 DO’s and Do NOT’S when Buying Investment Properties in Phoenix (metro) in the property, keep in mind that it’s always more valuable to purchase a house then a condominium in the Valley of the Sun. Because condos come with a lower price tag compared to a single family home then think long term investment, not short term.
#2. A condo it is! Get the best views, the best location, or both!
With a purchase of a Condo, you own the actual structure of the building jointly with the other members of the Association, along with common areas such as swimming pool, tennis courts etc. Individually you own the airspace and interior of the structure, but not the building itself. You and the other members of the Association own the structure together.
Common sense the higher up you go in the building, the more valuable the condo becomes because the view is essentially what creates the value.
One thing to keep in mind, however, is that buildings are hot and fashionable for a brief time, and then they become old and something better comes on the market.
So of course, if you’re getting older in years and you are just looking to downsize to a condominium after owning a house and you’re not interested in resale value, a condominium is simply great. And for some odd reason when you invest in anything, don’t care about future value, hold on to it for a long time, it typically does appreciate, and your money grows.
If your heart is set on owning a condo, then get the best view possible, because in twenty or thirty years the view is what will be driving the resale value. In 30 years when the condominium is old and the building is tired, someone is going to come along and redo the unit but they are going to buy your unit over other units in the building because it has the best view. Here is another real estate saying, “million dollar views”. Scottsdale offers city and desert views, Phoenix offers skyline views, and Tempe offers lake views.
So always go for the view! Think PENTHOUSE
Below I have included my top picks for best condominium building views…
- Icon Silverleaf (Scottsdale)
- Crystal Point Tower & One Lexington (Phoenix)
- Scottsdale Waterfront Residences & Optima Camelview (Old Town Scottsdale)
- Kierland + Plaza Lofts (Kierland Scottsdale)
- Esplanade Place & Residences at 2211 (Biltmore)
- Two Biltmore (Biltmore)
- Edgewater & Bridgeview at Hayde Ferry Lakeside (Tempe)
- Villas at Mountain Shadow (Paradise Valley)
#3. Avoid buying AT THE HEIGHT OF THE MARKET!
This one is much harder to determine because nobody knows when a market is at the top or bottom. We all do our own analysis and let’s be honest how many agents will tell you not to buy? Our Scottsdale-Phoenix-Mesa market is perfect example as you all know we are going through a Pandemic (COVID-19). Before March, our real estate market was extremely hot, including the rental market. Today it’s still moving along but homes are staying on the market longer, buyers are patient, rental prices are dropping, and some buyers/sellers are getting out of the market. This changed in days, not months or years. What I bring to the table says Pesqueira as I also hold a real estate appraiser license. I appraise real estate, in the front lines every day, and I see the value from the core.
Now keep in mind that if you’re buying something at the height of the market, the first properties to decrease in value are always secondary/vacation homes and condominiums.
Single family primary residences are always the last ones to drop and usually drop by a much smaller percentage than secondary/vacation homes or condominiums.
Remember these tips the next time you think about buying a condo in the Valley of the Sun. Always think RESALE!
Below I have included my top picks for condominium living in Scottsdale, Phoenix, Mesa, Tempe…
- Scottsdale Waterfront Residences
- Optima Camelview
- Optima Kierland
- Kirland Lofts
- 3rd avenue lofts
- Two Biltmore
- Esplanade Place
- Residences at 2211
- Portland Place
- One Lexington
- Summit a Cooper Square
- BRIDGEVIEW AT HAYDEN FERRY LAKESIDE
- Lofts at Orichidhouse
- Town Lake
- North Shore
Is a wide open for buying condos. The higher end condos will be located in or around Las Sendas. When buying a condo in Mesa, Arizona focus on cap rates. Mesa, Arizona will give higher cap rates vs other cities. If you are buying as an investment you should try to be around downtown Mesa, near Mess community college, Eastmark, or close to ASU.
Buying, selling, or investing in Arizona Real Estate? Contact us… I/We will find you the right property for your lifestyle, cash flow, future investment or portfolio, and growth.