Owning multi-family real estate properties can be a profitable option for investors. Charging rent to multiple tenants creates additional revenue streams that can quickly make your investment more profitable.
Multi-family housing offers many benefits, especially in growing cities where incoming residents always need a place to live. However, managing these types of properties can be difficult. Many owners find managing the properties overwhelming. If you’re finding that your property requires more energy than you want to give right now, it could be the right time to sell.
If you’re on the fence about whether to hold onto your property or sell, here are a few common reasons investors choose to sell.
The real estate market is steady
The real estate market is steady. As communities shift and grow, many investors find a steady flow of potential tenants. As the cost of single-family homes rises and interest rates increase, potential buyers are priced out of the market. More families are relying on multi-family housing for more affordable options.
As demand increases for properties, particularly in fast-growing cities, it’s a great time to maximize your return on investment by cashing out.
Statista released data that showed vacancy rates are at the second lowest rate ever recorded. There is a demand for housing in these types of units, so interested investors are likely ready to buy.
You can sell anytime you want
While traditional real estate sales (single-family homes) fluctuate depending on the time of year, commercial multi-family properties can sell anytime. Since buyers don’t necessarily have to move to invest in these properties, conflicts with holidays, school schedules, and other life events aren’t as common. You don’t need to wait until a specific time of year to attract potential buyers.
You’re looking for a reason to leave
If you’ve held onto your multi-family properties for decades in hopes of saving for retirement or building enough wealth to diversify, now could be a good time to exit the multi-residential property market. Property values and interest is still high. You could arguably make a significant profit from your original investment.
If your heart isn’t in the business anymore and you want to step back, now is an excellent time to make a move.
The property is distressed, and you can’t or don’t want to invest more time or money
Distressed properties are on the brink of foreclosure or already owned by the bank. If you’re unable to keep up with the payments on your multi-family rental unit and you’re facing foreclosure, you should consider selling.
Since property values are higher, you may be able to earn enough from the sale to repay your mortgage. Alternatively, you could ask your lender to approve a short sale (the lender takes less than what you owe).
If your multi-family unit is in disrepair, you’ll likely need to consider a cash buyer like brick. When you sell to an ibuyer, you may be able to forgo time-consuming steps like inspections, walk-throughs, and financing. Brick purchases homes in any condition, and we make fast cash offers. If you need to sell quickly, consider reaching out to find out how much you could get for your property.
Reasons you might want to wait
If you’re still unsure about selling your multi-family property, it might not be the right time for you to sell. Some common reasons you may choose to hang onto your property include:
Too much competition: If your local market is heavily saturated with listings, you may have a more challenging time getting a good offer. Before selling your investment property, keep an eye on the real estate market to gauge if holding off is a better move. If you need to sell quickly, an ibuyer can help circumvent competitive listings with fast offers that don’t require open houses.
You currently live in the property: If you own a multi-residential property and are occupying one of the units, selling could be problematic. Interest rates are on the rise, but so are property values. If you don’t have good credit and a down payment, you may find it more difficult to find a house that fits your budget. Staying in your current space and using the rental income to cover your mortgage costs or provide additional income might be a better financial move.
Property values are on the rise. Many would-be homeowners are finding themselves priced out of the housing market. Fast-growing cities like Phoenix, Salt Lake, and Fort Worth will continue to require multi-family housing. High interest in these properties means they’re likely to provide investors a steady income stream. The value of these properties means interested investors are looking for properties to purchase. Rising property values also suggest it might be the best time to sell for many current investors.
Now is a great time to sell if you’ve considered stepping away from your multi-family properties or streamlining your real estate investments.