Selling an Investment Property: Fourplexes in Silicon Valley
Fourplexes – investment properties with four living units – aren’t more difficult to sell than any other type of investment property. However, selling this type of investment property requires you to work with an experienced, knowledgeable multifamily REALTOR® who understands how they’re different (and how to market them to the right buyers).
Generally, people who set out to buy fourplexes are pretty certain that a four-unit investment property is the best choice. They plan to rent out all four units and earn four streams of income, or they plan to live in one unit and rent out the remaining three. Often, these investors know just how much a property is worth – either because they’ve done their homework on a specific property or because they’re experienced in buying and selling these types of units. That means two things: First, you must list the property at a reasonable price, and second, you must have an agent who knows how to reach these investors.
Selling an Investment Property by Pricing it Properly
Investors typically do their homework before buying a fourplex, and that means if yours is overpriced, it’s not going to sell. (Conversely, if it’s underpriced, it’s going to sell quickly – but you’re losing money you could have earned.)
Pricing can be tricky, which is why it’s important to rely on a multifamily REALTOR who will evaluate every aspect that affects what a buyer is willing to pay for an investment property. That includes:
- Rent prices and net operating income
- Individual unit sizes
- The property’s cap rate
- Property amenities
- The home’s age and recent upgrades
When your REALTOR evaluates your investment property to help you settle on a price, she’ll compare it to other, similar properties in the same area. That helps her determine how much buyers are likely to be willing to pay for your property.
Selling an Investment Property After Making Repairs and Upgrades
In many cases, it’s possible to sell a fourplex without making major repairs or upgrades. However, sometimes you need to invest in the property to ensure you can sell it for the best possible profit. Your REALTOR will visit your investment property with you and discuss potential repairs or upgrades that can help you sell faster or at a higher profit. Generally, this is about keeping up with what other sellers at the same price point are doing.