Multifamily Property Sales Preparation Tips
One of the financial benefits you should experience when you purchase commercial property is the increase in its value. At some point, you probably intend to sell your real estate for more than you purchased it for. This often occurs after several years of cash flows from rental income. However, when you are ready to sell your multi-family real estate, there are a few things you should do to prepare the property.
Contact Your Tenants
Your first task after you decide to sell your multiunit property should include contacting your tenants. They need to know you are selling and get an idea of the timeframe. They should also have the opportunity to ask you questions about the sale and their leases. Many may want to sign new leases so they receive guaranteed housing when the new owner takes over. However, some states do not protect lease agreements after a sale, so look into your state laws.
You should notify your tenants in writing of the sale. They also need to know that you may need to enter their apartments for maintenance and updates. Address any noncompliance issues, such as pets, too many occupants or smoking when the building does not allow it. You should also speak with your tenants face-to-face.
After your tenants receive notification, schedule an inspection of every unit. Look for any problems, including plumbing, mold, heating, carpeting or paint, damaged fixtures, old wiring, air leaks or other issues. Make sure you complete all routine maintenance. Inspect any common areas and building systems as well.
You may update especially old lighting or other fixtures, but avoid putting a lot of money into the property unless you expect a significant return on that investment. New owners shouldn’t expect the property to look brand new.
Check the roof, windows and doors for damage. If your building needs a facelift, consider adding a fresh coat of paint. Repair or replace damaged gutters and downspouts.
Look over your landscaping. Trim your trees and bushes so they are visually appealing. Get rid of dead or dying plants. Also, make sure you have bright, clear paths around the property. Check any outside amenities for repairs or updates. Give the property a general cleaning.
Manage your parking area. If it has potholes, cracks or other major damage, consider having it resurfaced. In addition, if it has faded, consider restriping it. Address the lighting and disguise the trash areas.
Prospective multi-family real estate buyers want more than solid financials. They want to know that the building is sound and the property is safe. Spend time preparing your property and tenants to get the best sale price.