I own a two-unit, two-story building on a lot that is 45 feet deep in Cow Hollow, in an area bounded by Union, Pierce, Chestnut and Buchanan Streets. I am trying to decide whether or not to try to merge the units legally into a single dwelling unit. It is clear that the process is complicated and not a slam dunk (in fact, the City is currently considering making it even harder to merge units) but it is still pretty tempting to try. What I would like to know is, is the building overall worth more as a two-dwelling-unit building, or would it be worth more as a single-family home? Is the answer to this question likely to change over time? Please assume that I have no tenants in either unit for the purposes of this question.
A short description: each unit is approximately 850 square feet. There are three small-ish rooms in each unit, plus a single unrenovated bathroom and a kitchen. The house was built in the early 1900s. There is a full basement under the structure.
Two things I forgot to add in my original letter are (i) that the house is located on an “alley,” and (ii) that there is no garage. Don’t know if that matters or not.
Thank you for your help!-DK”
As answered by Shanendoah Forbes of Arroyo & Coates, email@example.com
I think that the property is more valuable as a two unit apartment building. There is more value in having a property that can be converted to “condo” by creating an owner- user/TIC situation. In my opinion you will fetch a higher price if you sell to the “TIC” market rather than the home buyer that will purchase a single family home in that area. There is a lot more to it but I would rather not get too complicated.
There is more upside potential and less headaches in your future if you keep it a two unit “condo conversion/TIC” opportunity.