Selling Single and Multi-unit Properties
Selling income properties is considerably different than selling a single family home. Although we always put a “For Sale” sign up in front of single family homes, it may not be in in the sellers best interest to do so in front of rental housing because tenants may panic and move out.
Below are other considerations to be aware of:
• With multi-unit properties the pool of buyers is different. These are individuals who are buying real estate as an investment rather than their personal residence. The sophisticated investor is buying for cash flow, not crown molding. They are also aware that equity appreciation in multi-unit housing follows an entirely different appreciation schedule.
• Investor buyer’s loan options and guidelines are different, typically requiring higher down payments.
• Being able to clearly communicate and understand the investment potential in objective terms (cap rate, NOI, cash flow, loan constants, etc.) is necessary.
• Tenants considerations must be taken into account.
• 1031 Exchanges are commonly used by investors to trade up their portfolio without having to deal with the tax consequences such as depreciation recapture.
• Buyers using Self-Directed IRA’s to buy investment
• Single family rental homes have a much more diverse pool of buyers because you are not limited to marketing the home strictly to investors. If you have such a property to sell, it would make more sense for us to list this through our assumed name: Equity 1st Home Group. This will allow us to use different marketing strategies focusing on owner occupants and the home buying process rather than return on investment. Emphasis on issues like comparable price as well as life style considerations such as schools, shopping, and proximity to work are greater concerns to this group of buyers.
With knowledge and experience in all of the above categories, and the fact that Investment Housing Specialists has extensive experience in working with investors and has personally owned investment properties for over 35 years, we are far more qualified to help you sell your income property than the other local real estate offices. Please contact us today so we can assist you with the sale of your investment property.