I have seen people do this a variety of ways and you should assess it more on a case-by-case basis.

A Condo's reserve account only has to be 10% of their annual assessment income in order to be a Warrantable Condo for Fannie Mae or in general.

This helps you assess the buyer's creditworthiness and ability to make timely payments.

But, if the cost is fairly nominal, maybe under a couple grand, and you have no experience in real estate, including owning your own home and hiring contractors for that, then it is likely worth it.I would always start with a deep assessment of where you feel you don't have adequate knowledge.  

I find the referrals I have given my daughter when they are looking to relocate from LA or a second home have been great.. she has done half a dozen multi million dollar sales then subsequent listings with those leads I have given her.. on the flip side those that want to buy rentals are generally newer and are not really realistic about returns in higher priced markets.. so she has not converted many if any of those.

Assess your savings, budget, and eligibility for homebuyer programs.

I can't tell you how many properties have units easily convertible from 1 bedroom to 2 bedroom units, units with favorable dimensional standards which can boost rents with no photos to showcase these attributes, assessment square footage that is not correct,  upgrades not identified in the marketing materials etc.

It is also not stable, HOA increases and special assessments are common. 

How would I know the sewer or foundation isn’t rotting out below the building, or that there’s going to be a huge assessment to replace siding in the next few years?  

I had to do my own digging and found out after I bought the liens they were actually two lots that are assessed at $2800.