How to maximize usage of a second floor building in a downtown area.
Im about to buy a two story building. Around 13,000 sf. Should I divide the top floor into two condos and sell them outright or rent them out? Obviously rentals would bring more maintenance and hassle, but more profit longterm. Selling them would give me more capitol. Thoughts? 
[{"id": "d4m675r", "text": "Not sure how anyone can answer this question - it entirely depends on your investment goals.", "replies": [], "depth": 1}, {"id": "d4majcn", "text": "I would probably recommend you first check into he market to get a valuation on both.  Rentals may seem like they will generate more, but in a hot market (depending on where you are) you may be able to maximize profit on the condo sales and then place the money into real estate with a higher return.  A lot of times when we see someone morph a single tenant building into a multi-tenant one the result is less than optimal (not necessarily bad, just not optimal) that results in lower rents.  \n\nHere is some quick math for you:\nLet's assume you can rent out a 3,500sf unit at $1.25/sf gross... I am going to guess about 25% of that is going to expenses, that leaves you with $0.94/sf net or about $3,280/month net.  \nNow, we need to know what kind of return you want (aka cap rate)... at 5%, you are valuing the space at $787,500 to $225/sf at 8% you are valuing the space at $492,000 or $140/sf.\n\nFinally at the end of the day the question is are you comfortable with your return percentage or would you make more by selling the unit at $250/sf and then sticking that money in something that gets you a better return.\n\nNote: All values are for informational purposes, I have no idea what your market looks like...", "replies": [], "depth": 1}, {"id": "d4mbr3p", "text": "You should consider what you potential loan docs will allow you to do.", "replies": [], "depth": 1}]