In today’s competitive real estate market, finding innovative ways to make properties more affordable can set you apart and help your clients earn and save more money. One strategy is condominiumization, a process that can turn a single property into multiple, individually owned units, often making homeownership more accessible and affordable.
What is Condominiumization?
Condominiumization is the process of converting a single property, typically multi-family buildings, or even large commercial spaces into individual condominium units. Each unit is sold separately, while common areas such as hallways, roofs, and recreational facilities are jointly owned by the condominium association.
Benefits of Condominiumization
- Affordability: By dividing a property into multiple units, the overall cost of each unit is often lower than the price of a single-family home or a single commercial property, making it more affordable for buyers.
- Increased Marketability: Smaller, more affordable units can attract a broader range of potential buyers. A business that can’t afford to buy a $200,000 commercial property may be able to afford a portion of that property if turned into a larger multi-unit commercial space.
- Enhanced Value: Properties that are difficult to sell as a single entity may become more attractive and valuable when divided into smaller units, increasing the price per square foot of the property.
Case Study: A Successful Conversion
Consider the example of a large commercial zoned lot in the heart of Sheridan listed for $300,000. Initially struggling to find a buyer that can afford such a high-priced lot, the property was converted into six individual condominium units. The conversion process included constructing a building plan for a two story, six-condo building with appealing communal spaces; creating a Condominium Declaration; and some other legal maneuvering. The result? All units sold within three months, at $60,000 per condo unit. This increased the affordability for local businesses in town while simultaneously earning the seller $60,000 more than the original asking price.
Conclusion
Condominiumization presents a unique opportunity to make properties more affordable, increase marketability, and enhance the value of real estate assets. For more information on condominiumization and how it can benefit your clients or the legalities of condominiumization, contact us today.