Converting an office building into a livable apartment building can be a daunting task, but it can also be very profitable. Often this is because commercial space is worth more when converted to residential space in certain areas. Particularly when the property is located within a major financial/business center with very few residential properties. As an example, think of the high rise apartments
adjacent to Wall Street in New York or the luxury apartments in The City area of London.
Before you spend any money, the very first thing you should do is to conduct a study to see if the project is even feasible. You can do this part without outside help if you can competently understand the local planning regulations. At this stage you should also have a rough (but good) idea of how much the total cost of the project may be before you proceed.
Things to look for:
- Do the local authorities allow for a change of use?
- What's the precedent for the area as far as approved permits are concerned?
- Has a change of use been allowed in nearby buildings? If so, has the change of use from commercial to residential significantly increased the value of the building?
- What planning regulations could you fall foul of?
After this contact real estate professionals to get a rough valuation of the building should it be converted. This is to make sure it's actually worth it.
The next thing to do is to consult the local authorities with your intentions. This part of the process is often the most frustrating, as it may involve dealing with a slow-moving bureaucracy and people who do not share your vision. Depending on where in the world you are, they may also insist on certain requirements such as: disabled access, residential parking, energy efficient fittings and water reclamation. It's a good idea to find out if any of these things will be an issue before you proceed further. Not doing so may require multiple plan changes, and more time and money expended.
Obviously, as part of the feasibility study you should also have the building checked over thoroughly by independent professionals. Hire your own people rather than take someone's word for it or using engineers recommended by the seller. That way you can be absolutely sure there's no bias or dirty dealing. Check their credentials.
Use engineers and contractors for all relevant fields to check over the property. Get reports in writing. Ensuring they are very detailed and signed. Why must you do this? Well, if you're given bad advice from a qualified professional, it's often actionable in a court of law in many jurisdictions. It's not a nice thing to contemplate, but if you have to spend a great deal of money to correct bad advice, you should not be the one hung out to dry.
Have an architect create an internal plan, making sure to show them the aforementioned reports. Again, check their credentials and their portfolio of work to ensure they are right for the job. Make sure to include any changes that may have been suggested by the local authorities. If you can afford to do so, have another plan drawn up by another architect and pick the best one. Keep in contact with the architect of your choice and make sure they are available for more work, as you'll likely need to revise the plan at some point.
Now you have your plan, it's time to do a more-thorough accounting of the project. Before you spend any more money price-up everything. This is the time when you have to start talking to construction companies to get a detailed estimate of labor and materials. You should work very hard to negotiate the contracts, ensuring penalties are built into the contracts if the work is not completed on time. Again, check credentials, past work and make sure they are fully insured.
It's now time to submit your detailed plan to the local authorities to ensure you're good to go. Before any actual construction work is done, make sure you've thought of everything. Including the things that could go wrong. Make sure you and any partners are financially secure enough to deal with any eventuality and you're ready to begin.