Can You Make More Money if You Convert to Condos?

Over the last twenty years condos have become more and more desirable as an alternative to single-family homes.  In fact, many times it’s not even viewed as an alternative, it’s a first choice to many who would rather just pay a fee and have the typical upkeep taken care of.

With the continued rise in demand for condos in the greater Boston market over the last two decades, many multi-family owners have opted to convert to condos instead of selling the entire property as a two, three, or four family.  Therefore, many other multi-family owners, especially two-family property owners, wonder if they should convert to condos and sell as two separate condo units.

The quick answer is splitting into two units and selling them as condos generally nets the seller more money. In some cases, much more.  But there are a few things you must consider including the cost to convert to condos, the condition of the units, and parking. But before we get into those three let’s look at some examples of homes that sold for more.

We looked at several condo and multi-family sales in the greater Boston area in the past 18 months.  In Watertown, we found a 2-family home, each unit with 2 bedrooms, 2 baths, and 1 parking spot.  The home was in a great location, near public transportation, the property was in overall good structural shape, the units had a great layout, and have been updated in the last 15 years.  A buyer may prefer to make a few cosmetic updates to make it feel “new”.  The sale price was $925,000 in February 2019.

We found a 2 bedroom 1 bath condo sale in close proximity to this property – similar in size and in similar condition.  Just one of the units sold for $510,000 in April 2019.  Theoretically, if both units sold in that 2-family together, that would be $1,020,000 in total sales compared to a multi-family sale of $925,000.00, with a difference of $95,000 in profit if sold as two separate condo units.

As you can see from the examples and descriptions above, sellers usually do make more money when they sell as condos.  But as we mentioned at the beginning there are several steps involved. There are also costs and fees associated with the conversion process, including legal fees. In a typical scenario, it’s no more than eight thousand dollars.  To get started, you should consult an experienced Real Estate Agent to evaluate your options.  The agent can also provide a detailed market analysis on the market in your neighborhood for condo and multi-family properties.  It is also wise to hire an experienced Real Estate Attorney who specializes in condo conversions to ensure that the process goes smoothly.