Converting a multi-family apartment building into condominiums can potentially bring in additional annual income for property owners. If a real estate market is strong, renters could look to work towards paying off a mortgage on a property they would like to own. This way, interest can be written off and they will not be wasting money on rent. For owners, a condominium conversion could involve marketing their existing apartment units as condos or renovating the units to provide more luxury homeowner-based amenities.

Condominium conversion is considered a type of residential redevelopment, or “flipping” project. While home sales have mostly dipped in recent years, new condos are not considered new houses. Instead, they are considered remodeled apartments providing more benefits for owners rather than renters. Condominium converters are a niche group of investors and redevelopers. They consider buying a multi-family apartment building for renovation and conversion to be a shrewder investment than ground-up condominium development. Condominium converters are looking to mitigate costs, and building an entirely new condominium complex is a significant investment that can be avoided. Conversions are financially beneficial for homebuyers – they are more affordable than brand new condo units and typically look just as nice.

Condominium converters must research existing apartment units and secure various items before commencing on the conversion process. They must first purchase entire units, working alongside existing renters to convince them of owning a condo. Crucially, converters must uncover any remaining mortgage loans on the property, which will aid in assessing how many units needs to be marketed to the public.

Repairs are also a consideration – converters must see if any significant physical changes will need to be made to units. Converters usually work with many construction professionals including architects, engineers, land surveyors, and contractors. Some buildings may require the units to have separate meters for water, electricity and gas. A contractor can assess the need for this option, as well as ensure that the conversion processes adhere to building and fire codes regulations. Converters may work with an architect or engineer to formulate floor plans, as well as decide on a name for the condominium community. In terms of aesthetics, some converters prefer to focus on renovating building entryways and hallways, lobbies, and the exterior look of the building creating the presence of a condominium community. Other converters focus on improving the interiors of the units with new kitchen amenities, bathroom fixtures, hardwood floors, and other desirable ownership features. Once these repairs are considered and executed, converters must purchase condominium insurance, which covers the building rather than the individual units. The new condo owners may decide if they would like to purchase insurance on their own unit, otherwise known as homeowners insurance.

Converters should set aside a reserve fund pool to cover any future replacement or damage needs resulting from a faulty roof or compromised plumbing. A lawyer will be necessary for converters to ensure that zoning rules are being met. These lawyers will also draft the necessary condominium documents.