How to Convert a Condo into a Rental PropertyAssociation of Construction and Development
July 17, 2012 — 1,327 views
Converting a condo into a rental property is an ambitious endeavor, but you can make the most of this opportunity. Consider the following steps to successfully complete condo conversions.
1. Contact the landlord
As a real estate professional, you'll want to make sure your client legally has the right to make this alteration. Examining a condo's permits is a great place to start because it gives you the chance to determine if you're allowed to convert a property into a rental.
Additionally, you'll want to reach out to your landlord to let this person know about your client's plans. While you might be permitted to convert a condo into a rental unit, this type of property might have other restrictions that limit your ability to do so. For instance, a housing association may allow only a certain number of units to be rented or require a minimum term for leases. Contacting your landlord can help you avoid any pitfalls during the process.
2. Establish the value of the condo
The real estate market frequently fluctuates, so it might be worthwhile to review statistics from at least a year earlier to determine the value of your condo. While the real estate market might have hit rock bottom in the late 2000s, conditions have shown significant improvement in many areas since that time. When you examine market trends, you'll be able to determine your condo's current value, and might be able to better predict its future worth.
You should also review the prices of similar condos in your area. Checking out what these units charge for rent can help you gain maximum value when you add your property to the market.
3. Examine local and fair housing laws
When in doubt, go by the book - finding out what laws apply to converting a condo to a rental property will help you avoid legal penalties and ramifications. There are federal and state Fair Housing Laws that must be followed, and failing to do so could result in serious financial consequences. The National Multi Housing Council provides information about rent control laws for each state, which can be helpful.
Local regulations often apply to landlords and tenants, so you'll want to fully understand these before you rent the property. Be sure to examine every process and procedure that could apply to your situation.