Thursday 7 June 2018

Why Would I Divide My Apartment Block Into Separate Units, Condos?

Yesterday's post created many responses regarding the question: Why would or should I divide my property into separate units?

At the outset I would like to stress two big words: IT DEPENDS or as we like to say "How Long Is A Piece Of String".

List of possible reasons:


  • sharing out a property between investment partners wanting to go separate ways
  • sharing out a property between heirs wanting to go separate ways
  • selling off a property in single units at a higher price per m² in single units
  • increasing value for potential buyers
  • increasing LTV for mortgaging as banks like divided properties very much
  • ...

Areas of Concern


  • Many of the angles have tax implications totally destroying the intent, for international investors possibly a double taxation issue.
  • Is your property in an area where the division might be blocked by local authorities for fear of "gentrification" or is it already in a protected area.
  • What is your investment goal?
One of the key variables in deciding on a strategy for your property is the time horizon you have set for yourselves. If you are looking for the long game, blocked areas are still feasible for a division, as long as you don't plan to sell within the next 7 years. So one investor's concern is no problem to the next.

One item everybody shares in this process is the cost as it does not depend on the intent, this is what yesterday's post was about. Developing a strategy for your property or portfolio based on the intentions of the owner(s) and the individual properties is one of the specialties required. So the main question is:

How Long Is A Piece Of String?

Which summarizes strategy if not approached deliberately. Are you an investor wanting annual income from your investment or are you investing in value gain and see what happened after 10 years? Both strategies are valid but need different approaches.

If you are interested in a cost estimate for dividing a 20 apartment "average" building have a look at yesterdays post on this block.
If you want a cost estimate for your specific situation please contact an expert.





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