Why are condos sometimes considered risky investments?

There are pros and cons with condos.  With a condo there are many factors that are outside of your control where as single family homes, multifamily or commercial offer much more control.

The condo association can increase dues, limit renting, poorly manage the units (meaning loss in value for you) and there really isn't much you can do.

The resale can be an issue later as well as condo buildings that are under 51% owner occupied will not be able to get financing with FHA or VA or those that are not on the list of approved condos because the association didn't file the 100+ page application.  


For me it boils down to control.  With a other property types I can control maintenance, marketing, loan types offered in a resale or not have the issue with an association when it comes to leasing.  All which are negatives to a condo for an investment.

Condos do enjoy a lot of the same benefits as single family homes in regards to renting, cash flow generation, hedging inflation and the numerous other reason to invest in real estate.  If you are in a condo heavy market then this may not be a bad choice for you, however, always consider the cons listed above before making this leap.