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I wouldn't. But, more important than the number of renter occupied units, are the number of units owned by the same person or entity. If there were a lot of REOs in the building, it's possible an apartment company negotiated low prices for many units in the complex, which may have more or less turned it into an apartment complex. When a large chunk of units are owned by the same entity, that entity effectively controls the association, which is a much worse problem.
I looked at some lofts for sale and as I was touring the building the property manager stated that the building is over 50% renters.
Would you buy in a building that has 50% of it's units being rented?
I am sure the units are being rented out by loft unit owners.
Most likely not. The interests of renters and absentee landlords, on the one hand, don't line up well with occupying kwners. This usually translates into a lower quality of life for owners.
I would, and actually intend to do so within the next year. It is a good thing as far as I am concerned, in the respect that it keeps the HOA fees from getting out of control.
Although it does depend on the size/location/intent of the buy. In my situation we are talking a 1 BR condo that I intend on renting out after I cease living there.. If I was buying a nice 1200 square foot condo I intended on living in forever, I might be concerned.
Typically it would need to be an all cash purchase so you should be able to get it for a big discount because banks will not lend in a less than 50% owner occupied community. The only problem is you will only be able to sell if you owner finance or find and all cash buyer unless you wait until the owner occupancy rate comes up over 50%
The lack of financing, or at least affordable financing, on a unit with a high % of renters really takes down the value. I'm an appraiser, and the complexes we have in our market with high %'s of renters are usually among the lowest priced units out there.
Most condo mgt companies try really hard to not allow the % to exceed a certain thresshold in order to maintain values. Once you force buyers to pretty much have to have cash then you've eliminated the majority of typical buyers and values will react accordingly
Completely depends on what market segment you are talking about. I.E. Places like Manhattan, where everyone is renter because to buy in the city is expensive....it may work out for you. Depends on the demographics, Economics, Area.
As RE Agents say..location location location...and while it may not apply in your case since you want to buy, you may want to rent it out later so the numbers should be strong for that, likewise, if you may need to sell, you will need to "pitch" that idea to a potential buyer.
If its in an area/city..where rentals are quite common (major metro in the US)..then may be worth considering, if not...I personally wouldnt...only because I wouldnt want to deal with the transient population.
I looked at some lofts for sale and as I was touring the building the property manager stated that the building is over 50% renters.
Would you buy in a building that has 50% of it's units being rented?
I am sure the units are being rented out by loft unit owners.
No, I think that would be a poor investment in most cases.
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