Condo conversions are popular in Massachusetts given the strong real estate market. With single family home prices becoming out of reach for many first time buyers, condos are a popular alternative. Before moving forward with converting a multi-family property, consider this helpful information on Massachusetts condo conversions.
Understanding the Difference in Property Values
Compare the value of your multi-family property to the potential value of each unit if converted to condos. Massachusetts condo conversions only make sense if the values are much greater for condos in that particular market. Keep in mind that the value of individual units may vary depending on the size and features of each. Rather than generalizing, it is critical to use precise comparisons for an accurate market value.
Conversions Requirements and Expenses
If the condo conversion values are appealing, then you can then move on to evaluating expenses. There are a few major expenses related to Massachusetts condo conversions:
Most multi-family buildings require some work to convert to condos. Some repairs relate to preparing the units for separate owners. Others relate to getting the building up to current building code in order to obtain occupancy permits. Some examples are:
- Separating Utilities (Electric, Heat, Hot Water, Water and Sewer)
- Adding Sound Proofing
- Updating Electrical
- Replacing Plumbing
- Adding Safety Features (Hand railings, Common Areas, etc.)
It is rare that a multi-family building can convert without any renovation costs. Thus, be sure to hire a licensed contractor to review the necessary work and to provide an estimate beforehand.
There is a specific legal process for Massachusetts condo conversions. You must prepare and file certain documents to convert a multi-family building owned by one entity into a condo building with common areas and separately owned units. You will need the assistance of an experienced real estate attorney familiar with state and city/town laws. Expenses can range depending on the size of your building and other circumstances surrounding the condo conversion.
Real Estate Brokerage Fees
Once your Massachusetts condo conversion is complete, you will need to sell the units. Be sure to include real estate brokerage fees in your estimate of expenses. You may want to connect with an experienced agent ahead of time to assist with estimating the value of your property and to provide helpful tips on condo features and renovations that would maximize your sale price.
More on Massachusetts Condo Conversions
Now that you have an overview of Massachusetts condo conversions, the question is, where do you start? At Martino Law Group, our team has extensive experience in the Massachusetts real estate market. We can provide you with critical guidance on how to plan for a conversion and the legal assistance with completing the process. We can also refer you to local agents and other professionals. Contact us to schedule a consultation appointment with our team!