Condos are Risky

Condos come with a little bit of more risk and the reason for that is that they are tied to the other properties in the existing neighborhood because when you talk about a condo complex, every single unit is typically the same and there are two different variations or a maximum of three different variations. But the problem that you have is you cannot do anything to improve that property. Everything looks the same from the outside, the only thing you can do is interior but you are not going to get a ton of value when it comes to changing the interior unless you put gold-plated walls in. The problem that you have is if someone else lowers their price, it automatically affects your value because there are not enough differentiating facts.

Let me give you an example. In most neighborhoods, there are no two homes that are exactly identical and if somebody has a property for selling and they lower the price, someone else may not have to lower their price in order to sell their property because there are enough differentiating facts when it comes to the property itself. The floor plan is a little bit different because there are differentiating features when it comes to the property itself. But when you are talking about condos, there are no differentiating features other than the color of the paint or other than the carpet that is being put in or the color of the tile, which most buyers are not going to pay a lot of extra money unless it is a new bill to get some of those features. The only thing that you can do is compete on price. You have got more risk with condos because you are competing on price and anybody else that changes price in the neighborhood is going to have a direct impact. When you are selling condos, you need to be the cheapest condo out there, Period.