Friday, June 09, 2006

Condo Conversions

I have been focused on condo conversions for a few months now.
Are they really affordable?
Do they represent a viable alternative for a primary home buyer?

The concept of converting a rental property into condominiums is not new. It could make sense for all parties, the financing bank, the rental properties owner, the new homeowner.

There was a period in the 80's (remember the Resolution Trust?)
when it was a great affordable housing alternative. And it was a product of the Real Estate crisis.
Today, condo conversions are have become again a very popular alternative.
The effects? From the tenants point of view?

Read what the Orlando Business Journal says about what's going on in that area.

"The shortage, the research firm says, has allowed the vacancy rate to fall to 4.2 percent and pushed the average rent in Central Florida up to $828 per month.
"The apartment supply will continue to diminish in 2006 as the conversion trend persists," says Kelly Reddecliff, apartment analyst for Real Data. "This will allow the occupancy rate to remain above 95 percent, and it could even reach 97 percent in the coming year."
Natalie Green, assistant manager at Silver Oaks Apartments on North Powers Drive in Orlando, says her one- and two-bedroom apartment community has held steady at 95 percent or higher occupancy for months.
With one-bedroom rentals ranging from $651 to $701 per month and two-bedroom rentals from $765 to $830 per month, the apartment complex never has a tough time filling vacancies.
"It's tougher and tougher for people to find an apartment for rent," Green says. "A lot of apartment communities are converting to condos all around us, and we are feeling the effects here at Silver Oaks."

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