FairlyÂ 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 rentingÂ andÂ selling.Â
I oftenÂ hear the viewÂ that because a particular Orlando condo community is now renting as well as selling, it is therefore undesirable to purchase there. Perhaps. But maybeÂ not as undesirable as aÂ condo communityÂ that completely sells out in record time. Why?
Because when a condominium is that popular, chances are, it sold outÂ to a bunch ofÂ 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 theÂ unit anyway – andÂ being keen to make the condo ”cashflow” quickly, theyÂ 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,Â does a credit check andÂ they haveÂ the experience to spot a bad apple when they see one. So ifÂ you’re a buyer, you should probablyÂ 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 – orÂ 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!