When you buy a condominium apartment or townhouse, you are investing in a person as well as a property.
Your unit will only generate monthly income for you if you have a dependable tenant, and you will only have a dependable tenant if you buy the kind of unit that your tenant wants to rent.
Different types of tenants have different needs.
Seniors, for example, look for a building with elevators, security, en suite laundry, indoor parking and amenities.
University and college students look for buildings close to their schools and public transportation.
If the basement is unfinished and perfect for keg parties, all the better.
Young urban professionals look for buildings close to arts & entertainment, shopping and public transit.
Couples with young children look for townhouses near schools, parks, daycare and work.
Naturally, there are pros and cons to every kind of tenant.
If you consider the types of tenants mentioned above (seniors, students, young professionals, young couples with families), you'll appreciate that some of them tend to be long-term tenants while others rent for only a few years.
Some will take care of your unit while others might trash it.
Some will pay their rent on time while others might be chronically late or even miss a month or two.
The type of tenant you want determines the kind of condo you buy.
Your type of tenant will determine if you invest in a condo apartment or a condo townhouse, whether you buy a unit downtown or in the suburbs, and whether you buy a unit with one bedroom or four.
Your primary goal in searching for a suitable investment condominium is to look at every property the way your future tenant will.
This means finding an apartment building or townhouse complex that already appeals to your type of tenant.
It also means finding a building or complex that has a condominium board that allows you to buy a unit and rent it out.
Not all condo boards allow owners to rent their units.
And if they do, some boards have quotas for the percentage of units in the building or complex that can be rented.
Your due diligence as a condo investor and landlord starts with a type of person, not a type of property.
Before you create a spreadsheet and start calculating cap rates and gross rental income, sit down and think hard about the kind of tenant you want.
You'll save yourself a lot of grief, and a lot of money, too.