How Much is My Rental Property Worth?
If you’re like many people, the first thing you want to know is how much your rental property is worth – and that’s an important figure. If you don’t know how much your duplex is worth, you can’t be sure you’re making the best decision for your financial future.
When you’re selling a duplex, your REALTOR will factor in things like:
- Individual unit sizes
- Rent prices and net operating income
- Property amenities
- The property’s age
- Any recent upgrades
- Cap rate
All of these things help you and your agent settle on a competitive listing price for the property. The bottom line is that your duplex is only worth what another investor is willing to pay for it, and you have to find the perfect price range to bring in interested (and qualified) buyers.
What Happens if You Ask Too Much When You’re Selling a Duplex in Silicon Valley?
Though it may seem counterintuitive to ask buyers to pay exactly what you want when you’re selling a duplex – rather than going high and letting people “talk you down” – the best way to bring in the widest pool of qualified buyers is to price it correctly right out of the gate. If you price your duplex too high, it’s going to sit on the market, unsold, until you lower the price. (And that strategy can backfire.)
There are two issues with pricing your duplex too high.
Buyers are very tech savvy today and conduct a lot of research on the internet prior to entering the market. Therefore, they can clearly see current prices and trends, and know what properties are worth in today’s market.
Buyers know how much they can afford to spend when they start looking at duplexes for sale, and most begin their property searches online with specific parameters in mind.
Here is an example: If you list a duplex for $950,000 when it’s really worth $800,000, the buyers who can afford to purchase it at a reasonable price will never see it; they’re only looking at homes in their own price range. Even worse, the buyers who can afford a $950,000 duplex will see yours and compare it to other duplexes in the same price range – and unfortunately, yours is going to come up short.
What Happens if You Ask Too Little When You’re Selling a Duplex?
If you ask too little for your duplex, you’re leaving money on the table. That’s cash that could be in your pocket, going toward another investment property, or used to improve other properties that you currently own.