High floors vs low floors in Condos

Author: Financial Awakening Blog

If you still haven’t read Step 1 – Plan ahead. Imagine where you are when you retire, I highly recommend you to read it first.

condo

condo

When it comes to condo pre construction investment, there is one decision you always need to make: Whether to pay for the premium and purchase a high floor unit or save the money and purchase a low floor unit. The answer would depend on what you need and what are you future plan for the unit. Let’s first look at the pros and cons of high floor and low floor respectively.

High Floor in Condos

Pros:

  •  better views: the high floor you are, the further you can see.
  • quieter: you will hear much less noise from the road and street. You will also hear less plumbing noise from other units
  • more privcy: less people will be able to peak into what you are doing.
  • Higher resale value: the premium you pay will be justified when you resale your unit

Cons:

  • lower ceilings compare to lower floors
  • more wait time for elevators
  • harder to exit when there’s emergeency fire

Low Floor in Condos

Pros:

  • Convenient: can take either the stairs or eleveators
  • Cheaper in price
  • can exit easier if there’s emergency fire

Cons:

  • Higher risk of burglars
  • less privcy: people can see what you are doing when they walk by the street
  • Noisy: can hear the noise from street much louder

As I said before, whether higher floor will benefit you or not depends on your plan. Due to the fact that higher floor will most likely get the same rent as a lower floor, if you plan to purchase and rent to get cash flow passive income, it is going to be harder with a higher floor. However, on the contrary, if you are planning to purchase and hold, then higher floor will grant you a better resale value.

It is not a good idea to leave your unit empty while waiting for it to appreciate. So unless you are super rich and do not care about the cash flow at all, then it is a good idea to get a balance between appreciation opportunity and positive cash flow.

You can calculate how much you can afford by calculating the total expenses and compare it with the rent. With this method, you will know which floor is the highest that you can afford, which still produce positive cash flow. You can then lower the floors a bit to create a safe margin.

People will pay more for higher floors in new condos, but not so much for old condos (20+ years). It is a good idea to sell your condo

 

 

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About albert

I am an investor that want to achieve financial independent by the time when I retire. I plan to achieve this goal by planting more passive income sources. One of the easiest and best know passive income is through real properties. It is an art to create a portfolio to achieve this goal. I will share my thoughts and findings so that more people will be able to benefit from it. You will learn more about financial planning, retirement planning and how to earn more passive income. You will experience financial awakening which will change your life forever. Please feel free to comment and add your thoughts and findings to share. You can subscribe my RSS feed, and visit my facebook fanpage. Enjoy. Don't forget to like my page. I hope all of you will experience Financial Awakening and start planning.
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6 Responses to High floors vs low floors in Condos

  1. online portfolio analysis says:

    Thanks for the advice. I mainly invest in the stock market but I have been thinking about getting into real estate for some time. so I will put your tips into practice and see what happens

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  4. Palacio cluster house says:

    this high floors vs low floors condos information is fab and it is a great blog with highly accurate information content.

  5. Carlos says:

    Is it better to buy a high floor on a beachfront condo vs a midlevel floor, for example a 19 vs 8th floor. Since the view is of the ocean, the 19th floor one may only give a water view vs the 8th floor one may allow you to see some of the beach. Which one has a higher resale value and rents easier?

    • albert says:

      If you are considering the resale value, I will have to say the 19 th floor.
      It can be noise on the beach during the day and high floor in waterfront is always better.
      However, if you are considering the positive cash flow, you will have to make some calculation.
      Higher floor cost more and in most case it will negatively affect your cash flow. If it generates negative cash flow, then I would say no.
      If you need to pay $100 per property per month out of your pocket, how many properties can you accquire? People die in the long run. Beware.

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