Condo conversion can be a profitable real estate investment for any real estate investor. Any investor can make enormous amounts of profits in a very short time-frame.
There are 3 different types of condo conversions:
The first type of condo conversion is a conversion involving change of use. This type of conversion is the most complicated and frustrating conversion which needs a huge amount of time, knowledge and money. This type of conversion involves turning a church, a factory or a manufacturing plant into a residential unit.
The second type of condo conversion is a conversion with the same use. This type of conversion is the easiest conversion whereby the existing residential building is turned into a condo.
The third and last type of condo conversion is a conversion which involves additions. With this type of conversion, you need to create a common area which can include a lobby, recreational room, indoor/outdoor swimming pool as well as some new floor plans to add a new structure.
There are 4 main important reasons why the city and developers will allow condo conversions. The first reason is to sustain the neighborhood’s context, scale and heritage. Secondly, a condo conversion needs minimum demolition, less landfill and less material. Thirdly, condo conversion planning does not need many changes. The fourth and final reason is because condo conversions are very easy to market because usually the existing tenants would love to own it instead of renting.
There are also 3 main obstacles in condo conversion;
The first obstacle is the limitations in making any major changes in the structure including height, floor plans and so on. The second obstacle is any additional costs such as levies by the city and approval costs. The third and finally obstacle is that environmental studies can reveal many surprises.
There are a few legalities to follow in condo conversion;
The first legality is that each unit needs its own independent title and has to be registered as a condominium/strata corporation which has to follow the existing laws of the land. The second legality is that reserve funds are required by law which must be in the form of liquid cash. The third and final legality that new home warranties do not apply on converted condos.
Alongside the obstacles in condo conversion, there are restrictions in condo conversions as well. The first restriction is that each city is required to maintain a certain number of rental pools. An average city likes to see 25% to 40% residential dwellings available for rentals.
The city will be very hesitant to convert existing rental pools into condominiums unless otherwise there is a surplus in the rental pool. The second restriction is that the tenants’ rights can block or restrict turning any building into a condo conversion. The third and last restriction is that heritage or historical buildings may or may not be converted into condos.
Throughout our two day intensive condo conversion apprenticeship, you will learn the step by step process of how to locate these condo conversion opportunities and how implement them by using the governments or other people’s money. To obtain more information about our upcoming condo conversion apprenticeship please send an email to [email protected]
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