I don't think so if you're ok with the currency and political risks.

Just be mindful the reverse exchanges tend to be more expensive than a traditional 1031 exchange.

Underwriting will assess the performance and appraisal of the property based on traditional long-term rental comps.

Additionally, you have many borrowers that do not qualify for your traditional A-paper mortgage from a bank and that will definitely not help, as they won't even have the opportunity to buy.

Once you do this conversion it will be difficult to change it back to a traditional long-term rental. 

It's not like people won't know that the property isn't in a flood zone; if they finance it through traditional financing then the lender would most likely require that they carry flood insurance. 

Half its value relative to what currency exactly?

It's an investment into the property, and if/when they move out or even if they're there you can now add a traditional dryer to the property and collect additional rent.

Purchase price: $260,000 Cash invested: $52,000 This gem of a condo caught my eye, despite the fact that I traditionally believed condos weren't as great an investment as single family homes.

But I guess some tenants may want to do that instead of putting a traditional large deposit down.