To do this, divide the cost based on the ratio of the fair market value (FMV) of each asset to the total FMV of the entire property at the time of purchase.If you are uncertain about the FMVs of the land and the buildings, you can alternatively allocate the cost based on their assessed values for property tax purposes.Source: IRS Publication 527 (Residential Rental Property)

Buy a few leads—start with a small test amount—and assess their quality for yourself.

Assessment and Negotiation.

ROI factors in rental income, operating expenses, real estate market health, and property appreciation to assess the potential return.

A couple of thoughts specific to condo investing:1) Be sure to include the condo fees into your cashflow analysis, and budget for potential assessments as projected capital expenses2) Make sure the condo association is solvent - a good litmus test is whether or not the units are approved for FHA financing3) Make sure the condo association rules/regs allow for rentalsGood luck!

.### Additional Tips:- Conduct a market assessment to ensure this conversion makes financial sense.

-We have had our condo in Oceanside for almost 2 years now and the value according to Redfin and some comps in the neighborhood have increased the value of the condo by at least $80,000 ( rough assessment ). 

I was able to side step financial fees but the person funding the project was assessed a 26k debt because I and all subs were viewed as employees.

A few of those cautions include the investigation of existing encumbrances on the ground (zoning requirements, existing or proposed easements and assessments, encroachments, etc.), existing site conditions (high ground water, site topography, existing soil types and soil environmental concerns, etc.), the location, depth, and capacity of utilities to service the site - including public utilities (sanitary, storm and water services), franchised utilities (power, gas, cable), capacity of the local streets to accommodate additional traffic from your development...Be sure to find out if there are any specific local ordinances you need to satisfy (possible tree & wetland surveys, together with any necessary tree & landscape or wetland mitigation plans) and whether there are any concerns from municipal departments (e.g. hydrant locations from the fire department, storm inlet and retention requirements, as well as asphalt / concrete road requirements from the engineer), entrance requirements from the road commission (left turn and passing lanes at the site entrance), etc.Once you get past all this you can finally prepare a preliminary site plan and enter the political arena to get preliminary site plan approval, and to address any concessions the board and neighbors want from you to overcome their objections to your development.

Orange and Broward counties in FL have so many bidders, they usually go well above the assessed value.