“I would not want to kick out my tenants to sell,” Shenker shares. In this scenario, note that beyond paying for incentives, you’ll sacrifice rental income until your property sells. One process by which many landlords negotiate for tenants to vacate the property is called “cash for keys.” In this strategy, a landlord may provide relocation costs, a security deposit, and even a tenant’s first month’s rent for a new place. If your tenants have fixed leases, you may need to offer some cash incentives. You can give occupants the legal minimum notice period to move out (usually 30 to 60 days) if your tenants are on a month-to-month lease. Your tenants have the right to remain in the property until their lease expires, regardless of who owns the building, but if you need them out, there are ways to evict tenants legally. “No matter how much you fix up the property, there’s always going to be that one unit that’s really bad, and it’s just not going to sell well,” he comments. Andy Kolodgie, a property investor who buys, rehabs, and sells multi-family properties in Washington, D.C., and Delaware, has kicked out tenants for many reasons, from neglected mold issues to obsessive hoarding. In some circumstances, evicting a tenant may be necessary to secure a sale. “In my experience, people like occupied,” says Jade Shenker, Director of Tenant Relations for Prospect Management and a long-time investor with properties in Miami and New York. Some buyers even prefer occupied buildings, so they can begin earning rental income immediately. In most states, it’s perfectly legal to sell a property with tenants, and a seller can easily transfer lease agreements and security deposits to the new owner. Review your current leases and tenants’ rightsĪs a seller, know where your tenants’ leases stand so you can communicate occupancy with buyers. He also scans for expenses like shared utilities to determine what long-term costs he might be responsible for paying.Ĭonsider the characteristics of your multi-family home and let those details inform your marketing. To estimate repair costs effectively, McCorkel likes listings with pictures of every unit in the building, including details like the condition of the roof and foundation. “For example, we bought a four-unit, and all the rents were at $500 or $600, and we feel like with the right improvements, we can get all the rents up to $1,000 or $1,200.” McCorkel’s ideal investment property is either “completely vacant and falling apart” or “underperforming. “I’m looking for opportunities to increase income and increase value,” says property investor Kyle McCorkel in Hummelstown, Pennsylvania. If you own an older property, appeal to the flippers. You might also highlight local activities and attractions in your listing with a note saying “15 minutes from the beach,” an attractions map, or drone footage. For instance, if you own a newer building in a popular tourist destination, include some income projections for short-term and vacation rentals in your listing to entice investors looking for Airbnb rentals. Questions like these reveal a great deal about your multi-family home’s ideal buyer. What are the repairs and improvements needed?.Use the questions below to help identify your target audience so you can tailor your marketing efforts. The target buyer pool for your multi-family home depends on a number of factors, so consider details like the location, age, and condition of your property before you list. We spoke with three property investors from across the country and a top real estate agent with experience in the industry to arm you with ten tips to sell your multi-family home for all it’s worth. You’ll need to compile your rental earnings, coordinate showings with tenants, and make strategic repairs that won’t eat away your profit. Still, even with the market on your side, selling a multi-family home is complex. Researchers predict that multi-family investment volume will climb to $148 billion in 2021, representing a 33% gain over the 2020 estimate of $111 billion. According to the National Association of Realtors, the multi-family market has been the most “attractively bought property asset” in recent years. Today’s multi-family market is bustling with activity, saturated with aspiring and accomplished investors looking to purchase properties just like yours. If you’re selling a multi-family home, you’re likely ready to trade up from your starter duplex, triplex, or quadruplex investment property or have determined it’s a good time to cash out altogether.
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