What are the things that go into purchasing or selling a duplex?
Included here are tips from our experts to help manage the tensions that can arise in those transactions.
Selling a Duplex is certainly different than selling a single family home. One of the things that our team does for people when they are looking to sell, as an owner, is a walk through of the property. We'll take a close look at the home with and give them advice as to what they could potentially do to get more money for the property or point out the things they shouldn't bother with because the return on their investment to fix would be low.
Some things people will do for a single family home, you don't necessarily need to do for a rental property. Many people are a bit more forgiving for rental property versus a single family home. This is due to two factors that come in to play - rental quality and homeowner quality. Regarding rental quality, people like a nice clean place. That's always huge. But, it doesn't have to be perfect. And that's something that we understand really well that maybe other people don't understand as much.
There are other things that you can do as well. One of the areas where we've seen people make mistakes, as agents who do not understand rental property, is what actually constitutes a bedroom. One of the biggest things with rental property is the number of bedrooms. For example, if you have two bedrooms in a unit versus one, the rental income is considerably more and the price will follow suit. A common mistake made by agents is listing a property with an inaccurate number of bedrooms. Maybe there's not a closet in the room or maybe they don't look at the room as a bedroom. Maybe it's just an open room, for example, that doesn't have a door. So then they think, well, this isn't really a bedroom and they don't put it on the MLS as a bedroom. That in turn creates a problem for the owner, because the price isn't going to be as high. As a buyer you want to be able to see if somebody has a place listed as a one bedroom, that could be a two bedroom with some very simple changes or upgrades. There's a huge difference in value there.
Another thing to remember is who the parties impacted by the transaction are. When you're dealing with a single family house, you have two motivated parties. You've got the buyer and you've got the seller, both wanting to make the transaction happen. In a duplex transaction, you have emotions involved that can adversely affect the transaction. Party to these transactions are the buyer and seller, but you also have tenants in the property that don't necessarily want to see it sell. They have no stake in it. To be a good real estate agent for these transactions you must understand the value behind the tenant. This helps you make good relations with them, which helps them feel more comfortable. They'll be more willing to let you in to the property, they'll let your inspections come in, etc. If you're not conscious of the actual tenants living there and you think that they don't matter, then you can find yourself with closed doors.
If you're interested in purchasing a rental property in Minneapolis or St. Paul take a look at our listings or give us a call today!