For the last twenty years, the condominium conversion has been becoming increasingly popular. There is a huge crowd of Condo developers in the real estate market. It has been a very effective way of earning great returns within few months of the investment. When the prices of single-family homes became unreachable for the common buyers, condominium conversion came up as a great affordable alternative. Let us examine what is this Condo Conversion, why it is becoming increasingly popular, and is it completely risk-free.

What is Condominium Conversion?
A condominium is a large apartment building, with more than one owner, who do not own the whole apartment but small individual units in that apartment. They share common areas like elevators, hallways, pools and clubhouses, etc. When apartments, townhouses or even commercial warehouses are renovated in the form of such an apartment with small individual units, this renovation and the whole process is known as condominium conversion. However, the term condominium does not only imply the type of apartment or unit, but it also implies the arrangement of legal ownership of more than one owners that what are their ownership limitations, rights and responsibilities, etc. 

Condominium Units: Ownership Limitations
Technically, Condo owners own everything that comes within their purchased unit. However, it is only the units that they own and not the ground beneath that unit. It means they can live there, as an owner, but it will be very difficult for them to sell their condominium unit. Moreover, they have to share ownership of some common areas, such as elevators, pools, etc. Therefore, when it comes to the maintenance of these areas, it becomes the responsibility of all the owners. For this, generally, the owners form a condominium association, and own a share of interest in the same. In case, if there is a large maintenance problem, it becomes an obligation for them to pay special assessment fee for the same. However, they generally have to pay monthly dues. 

Condominium Conversion: How does it Work
Converters first do an extensive research to find out the right location for Condo conversion. The right location for Condo conversion is the place where there is little competition with the equivalent single-unit homes. However, it is not always that the price of a condominium unit is lower than that of single-family homes. In areas, where condominium units have to compete with affordable single unit homes, the overall prices of condominium units are very low and they provide a great alternative for the buyers to get an affordable unit. After all, buying a condominium allows the buyer equity to build and saves him/her from the hassle of paying monthly rent in rental apartments. However, when Condo conversions are done in new development areas, where there is no fear to compete with the equivalent single unit homes, the prices are much higher and sometimes, even a little bit unreachable for the common buyer. Anyway, after that the converters find the right location, they decide on a few things, such as how much expenditure they should bear in the renovation of the property, how many units they can make in the apartment, etc. They are very cautious while spending money on the renovation of the property, as after all, their main motive is to generate a heavy return. Money, money, money ¨C this is what real estate industry is all about. Condominium conversion is also not an exception in this regard. Therefore, they work on more to present an effective first impression. That is the reason why they pay more attention to improve the exterior and common places that the owners will share, such as hallways, pools and lawn, etc. Now, the big question is that once the converters have purchased the property and have decided to go for a condominium conversion, where will the existing tenants go. There are two options available to them - first, to vacate the premises and look for another rental apartment, and second, to purchase their apartments upright. Converters usually offer them certain discount to the actual price that other buyers (who are tenants) have to pay. The units are thus first sold to the occupants and then the converters do some marketing for the remaining ones to get outside buyers. The most important factor in the marketing is to convince the buyer why they should go for owning a condominium. Their marketing strategy is to present the things in such a way that it looks like a very easy and affordable purchase. They advertise about the low interest rates, tax deduction, building equity, etc. They also advertise about how inexpensive it is to buy a condominium rather than owning a rental unit and paying monthly fee. What is more, this strategy works. 

Condominium Conversion: Why It Has Been So Popular
Most people prefer owning a condominium rather than paying rents every month. The main reason is that this way, they can save a lot of money, as they just have to make an initial investment and they get rid of paying monthly rents. Moreover, the overall prices are very low and undoubtedly affordable. However, there are certain things due to which some buyers hesitate to going for condominiums, such as the privacy factor. If the buyer wants to maintain his/her own lawn and garden, and other amenities like pools, condominium units are not for them. That is why they prefer single home ownership. Still, there are huge numbers of buyers, who do not mind the presence of neighbors, and in fact, they love the active participation in community events. 

Hence, here we see why Condo conversion is gaining that much popularity and what are the strategy converters use in this regard.

 

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