Hi, We are in the process of selling two of our duplex properties in Minneapolis. Are there certain measurements or (industry rules) we can use to determine the minimum price we should list our properties to ensure that we receive "X" amount in return? 1% or 2% (troubled war zone) I understand many variables may impact this outcome. However, we were curious if there was a minimum % you should expect as a return. We have owned the properties for about 3 years now with a comfortable appreciation value but the tenants are a headache.
@Blake Wash rule of thumb is rents per month times 1.2 times 100 for suburban and high demand areas, 1.1 for less than perfect areas and those that are value add, 1 for c class areas with some rehab needed and .8 for war zones. (It does not apply to all properties, but is a general idea of where the final price will be)
Your agent should have a good grasp on how to price your properties.
@Blake Wash it really depends on how the real estate market is in your area. Are there many sold comparable in your area? How long were they on the market before they sold?
Are you trying to sell them on your own, or are you planning on using a Realtor? Even if you are planning to sell it FSBO, it might be worth interviewing a few agents in your area that specialize in multi family. You might be surprised, but a lot of times you will net more even paying the Realtor's fees. When you factor in holding costs, time on the market and the fact that they know how to price and market the property. It's free to have them come out, and even if you decide not to list it you're learning and making connections with people who can help you in the future!
@Blake Wash small multi-family values are based on the comps in the area and have an adjustment for their condition. I recommend you use an agent that specializes in investment properties. I know some great ones if you want a recommendation PM me.
@Tim Swierczek is correct, comparative sales are more important in determining price than the actual numbers for 1-4 unit properties. Talk to a realtor who specializes in selling investment properties, feel free to reach out if you would like a referral.
Separately - make sure you understand the tax consequences if you have owned them for a while.
@Blake Wash rule of thumb is rents per month times 1.2 times 100 for suburban and high demand areas, 1.1 for less than perfect areas and those that are value add, 1 for c class areas with some rehab needed and .8 for war zones. (It does not apply to all properties, but is a general idea of where the final price will be)
Your agent should have a good grasp on how to price your properties.