Home Loan Advice & Articles

Combining condos for extra space

December 18, 2007

When house owners need more space and don’t want to move, the solution is simple: build an addition. But what if you live in a condo or a co-op apartment? The answer may be to merge your current pad with the unit next door.

New Yorkers have been combining apartments for years. It can be a great solution for families who want to live and work downtown rather than commuting back and forth from the suburbs. Combining condos allows families to take advantage of the culture close-by, including museums, galleries and theatres, without sacrificing space. And while many city-dwellers may not have a backyard to call their own, parks are usually nearby and come with a built-in bonus -- someone else has to cut the grass.

Combining condos may pay off financially
This strategy also works well in downtown regions where three- and four-bedroom units are scarce but one-bedroom and studio apartments are in abundant supply. Plus, joining two units can pay off financially. Real estate experts say that combining two smaller condos often results in a unit that is worth more than the total price of the separate units.

While some homebuyers look for adjacent units they can buy at the same time, combining apartments is often easier if you’re already living in the building. Buying the unit next door means you can double your living quarters without having to relocate. And if you’re already a resident in a co-op, chances are the board will be more likely to consider your request than if you were an outsider buying two new units.

That brings up one of the potential snags involved in combining apartments. In addition to getting the green light from the building’s owners or co-op board, you or your contractor will need to obtain construction permits to make sure that all the improvements follow local building codes. The municipality may also want to reassess your property tax situation, as two combined apartments are usually taxed as a single lot.

Get advice before you make a move
Before you consider buying the apartment next door, consider getting advice from an architect who can determine whether your vision is realistic. For example, that divider you want to knock down may be a load-bearing wall that has to stay put. An interior designer may also be able to provide innovative suggestions for dealing with any awkward spaces that may be caused by the renovation.

Finally, consider how you will finance your purchase. If you already have a mortgage, talk to your lender about refinancing to a new loan that will be secured by both properties. The lender may require as many as three appraisals if you go this route: one for each unit separately, and one to establish the value of the two units when combined.

 

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