GET STARTED | Get Your Fair Cash Offer Today >>

  • By clicking Get My Fair Cash Offer, you agree to receive text messages, autodialed phone calls, and prerecorded messages from House Heroes or one of its partners.

  • This field is for validation purposes and should be left unchanged.

5 Tips For Selling Your Apartment Building

Looking to sell your apartment building?

Gotcha. Selling an apartment building requires more legwork than a standard single-family house. You can’t hop on Zillow and get a Zestimate for an apartment. Apartment buildings vary widely. There can be any number of units, with unique bedroom/bathroom combinations. This all impacts how much you can sell for.

Here’s a few tips to get the most out of your apartment building sale!

Want a fair cash offer for your apartment building? Give us a call (954) 676-1846 for quick cash offer. We buy rentals in any condition or situation.

Find A Buyer!

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”). Cap rate is defined as:

The capitalization rate is the rate of return on a real estate investment property based on the income that the property is expected to generate. The capitalization rate is used to estimate the investor’s potential return on his or her investment.

The capitalization rate of an investment may be calculated by dividing the investment’s net operating income (NOI) by the current market value of the property, where NOI is the annual return on the property minus all operating costs. The formula for calculating the capitalization rate can be expressed in the following way:

Capitalization Rate = Net Operating Income / Current Market Value

There are several ways to find a buyer for an apartment building. Find the owners of local apartment buildings (similar to your apartment as possible). Search the local county appraiser website to find owner name and address. You can write a letter to solicit an offer, or call if you can get their info online.

Another option is to contact the local city/county municipality to pull up rental licenses. Rental license is frequently required before a unit may be rented out.

You can list your property for sale with a local real estate broker. The benefit is your property will appear on the local Multiple Listing Service – which draws extra attention to the sale. The downside is paying upwards of 6% in agent commissions. That adds up fast!

t Rent to sell your apartment
Apartments with units leased at market value receive higher offers.

Charge Market Rents.

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.

  • Location: Geography dramatically impacts market rent. Rental units in a desirable neighborhood or near the best school district garner high rents. On the other hand, rentals in a high crime or run down neighborhood rent for less.
  • Size: Market rent increases with square footage.
  • Bedroom/Bathrooms: An additional bedroom or bathroom increases rent.
  • Amenities: Great views, outdoor space, central air, new renovations, gym, pool, parking, in-unit washer and dryer, pets, furnishings, balcony, cable ready, high speed internet, gated access, public transporation. Tenants pay more for desirable amenities.
  • Supply & Demand: Glut of rental listing? You need to lower the rent to attract tenants. If demand is hot with limited inventory, charge more.

Check market rents at Rentometer as well as on Zillow. Craig’s List and Zilpy also have rental listings. Local real estate agents and property managers have up to date local rental information.

Make The Units Tenant Ready!

Turnkey Property
“Turnkey” rentals sell for more. They are ideal for investors not willing to make repairs.

“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.

Time the Market.

Patience, my young Padawan. Certain times are better than others to sell an apartment building. Look at available inventory. Are rentals flying off the shelf as fast as they are listed? Rental demand is high. It’s a good time to lure in potential buyers. If rentals aren’t leasing up quick, demand is lower and you may have to accept a lower offer to sell.

Another consideration is seasonal rental data. Depending on the market, rental listing will be on the market only for a short period of time. For example, rentals in tropical climates may lease up faster in the summer than cold seasons.

Understand Your Sales Goals.

Every apartment building owner and apartment building sale is unique. You may be willing to wait months (even years!) to get the price you want. On the other hand, you may be fed up with your tenants and are ready to sell ASAP. If you are looking to sell sooner rather than later, setting price below “market” ensures a quick sale. Sales re accomplished faster selling “as-is” verses making repairs on your own.

Ready to sell your apartment building? Give us a call now! (954) 676-1846

Need To Sell An Apartment?

We buy apartments and rental property. Fair cash offers. Just enter your address below for your cash offer!
  • This field is for validation purposes and should be left unchanged.

Your privacy is important to us. We won’t share or sell your info.

Leave a Reply

Your email address will not be published. Required fields are marked *