Posted on: 11th Aug, 2009 07:15 am
what the owner occupancy rate means in a condo complex ?
I am trying to buy a condo in california and the owner occupancy rate is at 42 % would that qualify fir a conventional loan ?
I am trying to buy a condo in california and the owner occupancy rate is at 42 % would that qualify fir a conventional loan ?
Hi,
Owner occupancy refers to the percentage of units that are currently occupied by owners. Lenders consider this occupancy rate before approving a loan to finance a condo unit. The higher the rate, the better the chances of the borrower getting a loan. Generally, a 60% occupancy rate is said to be good for financing. Lenders do not usually finance condo with less than 50% occupancy. However, much depends on which area the condo is located in.
Owner occupancy refers to the percentage of units that are currently occupied by owners. Lenders consider this occupancy rate before approving a loan to finance a condo unit. The higher the rate, the better the chances of the borrower getting a loan. Generally, a 60% occupancy rate is said to be good for financing. Lenders do not usually finance condo with less than 50% occupancy. However, much depends on which area the condo is located in.
condominium complexes that are less than 50% occupied are not especially good risks for lenders to get involved in. that's why the standard was set originally. your case doesn't look like it will be reviewed favorably, mike.
Yes.
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I did checked with the mortgage Co. and they pulled the tax roll and the complex had 150 units which only 40 units had off-site address. I am confused now. Dose this means the occupancy rate is 73 % not 42 % as the HOA had claimed before ? Can I trust the tax roll ? How did the HOA come up with 42% owner occupancy then ?
Hi Mike,
Tax roll is a reliable source, I believe. But how did you find out 73% occupancy rate? If only 40 units out of 150 have off-site address, there remain 110 units. I think you included those 110 units while calculating the percentage. But have all those 110 units been sold? Are you sure there are no vacant units among those 110 units? As far as the owner occupancy ratio is concerned, the units which are bought as second homes or vacation homes and are not occupied by the owners will not be counted while calculating the ratio.
Tax roll is a reliable source, I believe. But how did you find out 73% occupancy rate? If only 40 units out of 150 have off-site address, there remain 110 units. I think you included those 110 units while calculating the percentage. But have all those 110 units been sold? Are you sure there are no vacant units among those 110 units? As far as the owner occupancy ratio is concerned, the units which are bought as second homes or vacation homes and are not occupied by the owners will not be counted while calculating the ratio.
How do i figure out what my occupancy rate is of a 60 unit complex? I have 4 vacant apartments.
Hi sunshine!
Welcome to forums!
There are two types of occupancy – physical and projected. In order to calculate physical occupancy, you will have to subtract the number of vacant units from the total number of units in the complex and then divide it by the total number of units in the complex. For example you have 60 units and 4 of them are vacant. Thus, 60-4 = 56. Now, if you divide 56 by 60, you will get .93. Thus, your physical vacancy is 93%.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
There are two types of occupancy – physical and projected. In order to calculate physical occupancy, you will have to subtract the number of vacant units from the total number of units in the complex and then divide it by the total number of units in the complex. For example you have 60 units and 4 of them are vacant. Thus, 60-4 = 56. Now, if you divide 56 by 60, you will get .93. Thus, your physical vacancy is 93%.
Feel free to ask if you've further queries.
Sussane
Just the opposite, Sussane...the occupancy rate is 93% and the vacancy rate 7%.