Invest in Real Estate
Center City Condominiums
Allan Domb’s Key to a Successful Investment Portfolio
Over the years, many people have decided to add real estate to their investment portfolios, with Center City condominiums being their investment of choice. Many bought anywhere from 10 to 40 investment condominiums in Center City. As a result of their performance, numerous buyers have shifted their investment focus from mutual funds and the stock market to Center City condominiums in core neighborhoods.
In fact, one investor recently did an analysis and determined that the $350,000 they invested ten years ago in condominiums is worth about $1,000,000 today and produces an annual income of $60,000. They also did analysis that showed if they had invested the same $350,000 in the stock market over the past ten years it would be worth approximately $450,000 today with no real annual cash flow. Let me say that again…the condos produced $550,000 of equity greater than their stock option and produced the annual cash flow of $60,000!
By no stretch of the imagination do I qualify as an investment advisor, but with respect to the experiences of many real estate investors, it appears there is a case to be made based on people I have helped in the past.
Many real estate investors whom I have helped are no longer gainfully employed, either due to retirement or old age. Yet, they happily rely on their real estate for to supplement their income stream to finance the lifestyle to which they have become accustomed.
The bulk of the fifty or so investors I have helped over the years to create their nest egg in Center City condominiums have fared extremely well. Their portfolios continue to produce a steady income, while effectively protecting themselves from the damaging effects of the current economy (the bad markets are affecting everyone, but not to the same extent).
Victims of the financial swings on Wall Street should explore the possibility of switching their allegiance to sensibly purchased real estate investments—like Center City condos—while riding out the current storm.
I am the perfect example and believer in what I have written here. My conviction to stick to a plan and implement it is evidence that I believe that real estate is, in the long run, the safest and surest path toward financial security and independence.
If you or someone else you know is interested in learning more about investing in real estate, please call me at (215) 545-1500 or email me at domb@allandomb.com to schedule a time that we can meet and discuss this program.
Frequently Asked Questions
Philadelphia is a primary market which means people will always need to be here for their employment. When times are tough economically people give up second and third homes but continue to need to live close to where they work.
The core neighborhoods in Center City Philadelphia have historically fared very well in both strong economies as well as in economic downturns. The home values in these neighborhoods—specifically Rittenhouse Square, Society Hill and Washington Square—are down on average about 15% from the height of the market in 2005. More peripheral neighborhoods such as Northern Liberties, Queen Village and Graduate Hospital were hit a lot harder because people who would normally consider these neighborhoods were able to get into the core neighborhoods due to the softer prices and lower interest rates.
Conservatively, condominiums appreciate 3% annually. Between 1996and 2005 home values increased about 300%. This was both unhealthy and unsustainable.
Condominiums are typically good investments when bought in great locations at reasonable prices. When you own a multifamily property or a single family home, you not only have to maintain the inside of the unit(s), but also the common areas and the structural and mechanical aspects of the property. In a condominium, you pay a condo fee that covers all of these issues as well as many of the potential maintenance issues that a tenant could have within the unit.
Economically speaking, by owning multiple condominium units in different buildings, you have your eggs spread out in different baskets. Vacancies hurt a lot more in multifamily properties and single family homes where you are dependent on only one rent or a few rents to cover the cost of ownership.
Additionally, condominiums tend to be more desirable and achieve higher rents per square foot than both multifamily and single family properties. They are typically maintained at a higher standard due to the oversight of a condominium association and often have more amenities than other types of properties.
From a convenience, economic and desirability standpoint, condominium units in buildings in the best neighborhoods have performed very well.
