Rather than letting your apartment building collect dust on the open market . . . be proactice. Search for a buyer!
Apartment building buyers are different than for a regular house. The common house buyer is an owner occupant intending to move in. Owner occupants are concerned with neighborhood, curb appeal, and family needs. They are driven by emotion, and rely on traditional mortgage financing.
Owner occupants are not the ideal buyer for an apartment building. Traditional mortgage finance is not available for commercial property. Real estate investors are better suited to assess an apartment’s real value. As opposed to emotion, investors focus on due diligence and profitability. The primary criteria in purchasing an apartment is the Capitalization Rate (“cap rate”).
Are your tenants paying below market rent? This is a common problem for landlords trying to sell their apartment. Investors make offers based on rental income: more rental income means higher sale price. If you want the highest offers possible, lease the units at the market rents.
“But how much can I charge for my rentals”? Glad you asked. Fair maket rent is based on several different factors.
“Turn-key” rental property sells for more than rental units in need of renovation. According to Investopedia, a “turnkey property” is:
A fully renovated home or apartment building that an investor can purchase and immediately rent out. Turnkey properties are typically purchased from companies that specialize in the restoration of older properties. Those same firms may also offer property management services to buyers, minimizing the amount of time and effort they have to put into the rental.
Common apartment repairs include broken appliances, leaking ceiling, leak under sink, dripping faucets, hot water heater, bugs/rodents, garbage disposals, clogged toilets, broken HVAC.
Some real estate investors will make repairs on their own, others simply want to buy rent ready property. Rent ready is attractive to individuals that want to invest in the real estate market, but don’t have the time, interest, or resources to renovate a home or handle maintenance.
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