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Old 01-04-2009, 11:32 AM
 
30 posts, read 88,174 times
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Good day to all,
i red often in forums that is better be far from buy a condo conversion as an investment.
Why?

Many Thanks

Lilit
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Old 01-04-2009, 01:08 PM
 
34 posts, read 125,792 times
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Usually it is cheaper since the building is already standing and was built when costs were lower. Also if you were living in the unit before the conversion alot of times you get a discount. In todays market it is hard to tell. Also what kind of neighborhood is it in,,,getting better or worse
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Old 01-04-2009, 01:27 PM
 
Location: Orlando, Florida
43,856 posts, read 47,399,111 times
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I thought there was more condo's who were now going up for rent since it is hard selling them these days. However, I would think if you did find one in conversion, you may be able to side step those high HOA costs.
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Old 01-04-2009, 03:57 PM
 
Location: Orlando FL
1,065 posts, read 3,922,833 times
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It's pretty universal that condo-conversion properties are NOT great investments. They were built much more cheaply than a purpose built property, very little sound insulation, upgrades, or real solid structure.

The HOA dues are usually VERY high from a variety of factors ranging from an under capitalized reserve for replacements such as roofs, to massive numbers of foreclosures because they were all converted and sold at the peak of the market of way more than they were worth, to just plain bad management by the "developer" that converted them and may still own a significant portion.

Almost all of the condo-conversions I have seen lately have dropped to being worth less than 100K for larger units and in some cases much less than<50K when they were sold for upwards of 300K just a year or two ago. In my opinion they are only worth purchasing if you can get one for a VERY good price, where it makes sense to just rent it cheaply and cashflow it with a LARGE ROI. You still must be very wary of HOA issues because a severe problem with the HOA can cause the property to be worth near $0 quickly. As always with Real Estate of course, nothing is 100%, there are one or two condo-conversions that would be worth purchasing.
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