Owning an apartment building is an excellent source of passive income. The trouble is that there is also much responsibility attached to the job. This can range from handling tenant complaints to chasing after late rent. For some people, this can be too much. If you’re one of those people, you might be thinking of someone taking the property off your hands. However, it isn’t as easy as just putting up an ad in the newspaper. Here’s how you can get the property off your hands and get what you deserve:
Work with a Realtor
One of the main ways you can dispose of your apartment is selling it. However, selling an apartment is not going to be easy. For one, you will be looking for a buyer who has the money to afford your apartment building. This is more difficult than the standard house sale because you will be selling your building at a higher price. This is to take into account your potential loss of future earnings and the value of the apartment alone.
This is where real estate agents come in. They will be doing most of the legwork. They will contact other local apartment owners, and they might also look at the local record of rental licenses, which will give hints on who are interested in owning a rental property.
Set Your Rent at the Right Amount
When people are planning to buy your apartment, they will be making offers to you. One of the factors that affect those offers is the current rent that you are charging your tenants. If you are charging below-market rates for whatever reason, they will be offering you below-market prices, too. You need to raise your rent to meet the current market rates so that your price for your building will be a reasonable one.
Refurbish Your Rooms
Another factor that will affect your sale is the condition of the building. Ensure that your rooms are all in good condition. Additionally, you will want the various systems in the building, ranging from the plumbing to the electricity. Your buyer will most likely point out that they will be paying for the repairs involved so they will need to lower the price. Ensure you get a better rate by doing the repairs yourself.
Go for an Exchange
You can also use 1031 TIC investments to get a good deal. 1031 exchanges allow real estate owners to trade property for a similar one without paying taxes. Fill the appropriate paperwork with the IRS, and you can use the money you get from your sale to buy a new apartment building. This way, you can start fresh and get rid of all your old tenants.
In the end, you should remember that apartments are valuable pieces of real estate. Getting rid of one is going to cut into your profits considerably, so you’ll need to get the most out of your decision. By following the tips above, you can get your money’s worth.
