Selling a multi family property takes some finesse and long term care, especially if you want top dollar when you go to sell. We would like to share some advice from our experience working with these types of sales that will put you ahead of the curb - coming from both a landlord and Realtor’s perspective.
We have seen many properties in all types of condition. There are simple, cheap and money-free ways to get top dollar for your multi family, but be warned, this process is an ongoing one from when you pick the property to purchase all the way to sitting at the closing table to sell the property years later. What happens in between those years is crucial to allow you to make a boatload of money and prevent you from losing your shirt.
Simple Seller Tips to Maximize Sales Price
We have seen hundreds of multi family homes. Properly maintaining your home while you own it, is a practice you should start NOW, before thinking of listing the home. Most of our most recent multi-family sales sold at or above asking price because the homeowner continually maintained the whole property, and buyers recognized this (the clean tenants surely helped).
Clean up your property!
You can pay someone to ensure the leaves are cleaned, the common spaces are free of dirt or grime, and the vacant units are spotless, or you can spend a few hours of your time and do it yourself. Make sure your tenants do the same - you can even offer them compensation to ensure it shows well or threaten to kick them out if they don’t. Such an inexpensive act could increase your sales price by 5-10%. Curb appeal is not a myth, it is the first and last impression the buyer gets, make it a great one. We have specifically not purchased property because it had a dirty and unappealing exterior/interior, when all it needed was a few hours of labor to make it seem welcoming. There is a correlation between messiness and lack of upkeep and the costly items needing to be replaced sooner. And if you can keep up this maintenance periodically while owning the property, it makes it much easier to manage when selling it.
Raise the rents!
There are so many landlords out there that are too afraid to lose their tenants that they keep their rent the same for decades (WHY OH WHY?!).
First of all, most of the time, a tenant is more afraid of losing their home that they will gladly pay $50 a month extra for a year to stay in the same unit and not:
Second of all, you are losing tens of thousands of dollars in that span of time in passive income. Now do the math: even a $25 raise in rent each year for 20 years is a significant amount of extra income in your pocket each year ($300). You can call it compound interest.
If you slowly raise the rent over time, it actually raises the property value. Buyers will come in and if they see that your $400K listing is only taking in $2200 a month in rent (when market value is $3800/month), they wonder “what is wrong with this property that the rents are so low?” They will also see the added headache of either raising the rent themselves with the tenants that are there (which is never a fun thing to do) OR kicking the tenants out and needing to re-rent (which is even less fun). It is a major deterrent.
If you slowly raise rents over the years and keep them at least close to market value at the time, you make more money in passive income over time and it makes your property more attractive and more valuable to the buyers.
Some folks may be reading this saying “that is obvious, of course you should raise the rent periodically, how else do you make money long term?” But if you are one of the few saying this, congrats to you - You would be surprised at how many landlords and multifamily owners are too afraid to ask for more money. Seek the opportunities to buy something where the landlord has been lazy – it will make you a lot of money!
Picking the right agent to represent you
Here are some ways to maximize your profit when selling your multifamily and how to pick the best Realtor possible.
Don’t take their word for it just because they want the listing, test them and see if they are the right person to get the job done the fastest and the one to get you the most money out of your property.
Take This Advice
The Fairfield County market is BEGGING for more multifamily inventory. Hiring the right Realtor to help you sell yours can be a great move to liquidate your assets at a great price and move on to bigger and better things. Feel free to reach out for any pricing or market questions, as we have useful information and stories that could help you in one direction or another. We also have buyers ready to buy in the markets up and down the CT coast from Stamford through Hamden/East Haven.
Multifamilies are in a class of their own; they are their own breed. To deal with them successfully takes finesse, so pick the right agent when buying and selling these types of properties. Having the best in your corner can change things drastically, whether it is finding the issues before you make an offer on a property or getting you top dollar when selling.
You can also proactively raise the value of your multifamily by following the few simple, long/short term steps stated above. Being a lazy landlord never pays off, if you are going to be a lazy landlord, either hire someone to manage your property for you or you shouldn’t be a landlord at all; go invest in the stock market, as you won’t have to deal with much and will most likely be happier going forward.