Mixing Condo Renters with Owners

Fairly recently, I posted an article about the number of condo conversions in Orlando that have been forced to abandon sales and go back to rental. Other conversions are both renting and selling. 

I often hear the view that because a particular Orlando condo community is now renting as well as selling, it is therefore undesirable to purchase there. Perhaps. But maybe not as undesirable as a condo community that completely sells out in record time. Why?

Because when a condominium is that popular, chances are, it sold out to a bunch of investors. “At least they’re not renters,” you say. Correct, but since they are not living in the condo themselves (because they’re investors) they wind up renting the unit anyway – and being keen to make the condo ”cashflow” quickly, they tend to rent to the first person who can slap a check in their hands. When investors rent themselves, they tend to make more mistakes and right now there’s a lot of that going on; evictions left and right all over town.

An onsite management company on the other hand, takes an application, does a credit check and they have the experience to spot a bad apple when they see one. So if you’re a buyer, you should probably worry less about the fact that the condominium is still renting half the units, and worry more about making sure there is an investor cap. Not only will that cut down on renters in the long run, but it will help a potential buyer get a mortgate for your condo when it’s time to sell. Because when mortgage companies see a poor renter to owner ratio, they are less likely to process that loan – which leaves you looking for a cash buyer – or a sub prime mortgage lender.

Condo conversions are great deals right now – but if you’re looking for a good investment, just make sure you pick the right one. There are other things to look out for too, so if you’re in the market for a an Orlando condo conversion give us a call before you head down to start looking around – we might just be able to help!

4 Comments

  1. I agree that a high percentage of investors in a condo conversion project is not preferred. They seem to flood the market with their resale units, making it very difficult for owner occupants to resell should the need arise….

  2. I have three kids in a small two bedroom condo pretty sad when that is the only thing you can find under 200,000. Without it being a dilapitated house, or trailer home. People have become really greedy when the homes are not even worth that much. Now with this mortgage thing going on with renters I wounder if we will ever get out of here.

  3. These investors will eventually loose money here is why. I live in a condo conversion I have had many incidents with mold manly because the people who worked on the place only beautified the units not fix internal problems. When you hire cheap workers you pay a price shoddy work which will lead to the lawsuits. With former apartments you need to do a complete fixing. Previous renters could have neglected the units. People are not going to slap down lots of money, and live in a leaking condo. If you think so your fooling yourself. Second what if renters don’t report problems. They don’t care since they don’t own the place.They may have to work, and figure they can worry about it later. Then you have to pay money to repair damages that become more problems if left unreported. Third what if renters don’t pay then you have to spend money to take them to court, and evict them. Maybe hard to do if your in another state. Fourth what if maintenance fees go up, and your not profiting off the condo. Also what if your rent is to high, and people can’t afford it they can just rent a cheaper apartment, or trailer. If the housing market is bad renting markets may become bad because people don’t make the money they used to.

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