If you own an apartment building, you may stand to earn more money by converting it into a condominium. On the other hand, it may not be a good use of your investment if the competition is stiff or the location is not conducive.
A successful conversion requires analysis and planning. Here are some things to consider before you make your final decision.
Condominium governance
According to Mashvisor, you should think about the structure of the association that will govern the condominium community. In many cases, the governing body consists of residents, but another option is an appointed board of directors.
Building survey
A condominium consists of individual private units and areas common to all residents. To avoid boundary disputes later, you should have a detailed map of the entire property clearly delineating and identifying each separate area. This requires a building survey to create accurate drawings.
Conversion costs
Once you have all of the units and common areas clearly delineated, the next step is to determine how much it will cost you to have the conversion done. Condominium residents expect more from property that they own than from rental units, so you may have to do some rehabilitation and probably some upgrades. Those are just a fraction of the total costs, though. You may have to refinance your building, and there may be a new property tax assessment.
You must also comply with Florida state law as it relates to informing your current residents when the conversion is going to take place and giving them options for extending their current rental agreements if desired.
