There are many benefits to owning a rental property, but perhaps it is time to sell. The first thought may be to sell the building as-is to another landlord. On the other hand, owner-seller may turn a more significant profit on their investment by converting the apartments to condominiums. A lucrative and successful conversion requires careful consideration and planning, which they should do before making their final decision. Here are some issues to weigh.
Schedule a building survey
Condos involve private units and common areas used by residents. It makes sense to get an accurate map of all the units and common areas. Not only will this help determine each unit’s value, but it can also avoid disputes with neighboring landowners or between new buyers.
Calculate the conversion costs
Rental units may have functional but not high-quality kitchens or bathrooms that homeowners often desire, which means upgrading the units before taking them to market. The units can also be divided or combined to fill a need depending on the market. The owner may choose to build out common areas with amenities. There will be other new costs, including loans to do the work, new property tax assessments, a more expensive insurance policy, and other expenses.
Texas and municipalities here in the metroplex have regulations regarding apartment conversions. Common examples include the number of units in a building. There may also be laws regarding the sale to current renters willing to buy their unit or the protections from evictions that tenants may have.
Get some help
Discussing this potential sale with a realtor can be helpful to understand the condominium market better. It is also essential to work with an attorney versed in local real estate laws and regulations and recognize potential legal snags. They can also draft the contracts and handle negotiations when it comes time to sell.