Even Fixers Get Multiple Offers..! Just Not Top Dollar..!
I haven’t written an article in a while and thought I’d get back in here and update those of you that follow this blog from time to time
RE-SALE SACRAMENTO AREA DUPLEXES
Duplex sales in the Sacramento Region are still pretty healthy with rising prices and rising rents because of a Strong Economy.
Mistakes I See Sellers Make:
The biggest mistake I see some Duplex Sellers now on the market, is thinking an “as is” sale of a property that has a lot of “deferred maintenance” will sell for just about what a “Fixed Up” property will bring in.
Another mistake, besides not maintaining the property, would be an existing unit Rents far below the market. The reason usually given is “they are long term tenants”. This reason ignores the fact when they go to Sell the Duplex, a new owner is going to have to deal with tenants receiving large rent increases.
Why to Avoid Those Mistakes:
Because they haven’t raised the rents during the long term tenancies, these tenants know they have a good deal and never report much in the way of needed repairs and since they always pay the rent on time, the Seller hasn’t been by the property or maintained it unless it was an emergency.
Because the rents were so low, there was no incentive for the owner to make any upgrades to or any effort to enhance/upgrade. Most of the time they only made repairs after a complaint.
Example of what I’m talking about:
I’m in escrow now on a Fair Oaks duplex where the HVAC unit will have to be repaired to the tune of $2,000 because the unit hasn’t been serviced in years. What’s more… Even with this fix, there’s no guarantee and the contractor said you’d be better off getting a new unit. Had it been maintained and serviced on a regular basis, the unit would have had more potential life and not become an issue in the Sale Escrow.
So the Bottom Line…?
Prices are going up for sure and if you want top dollar for your investment, you should take an honest look at it and if repairs/upgrades are warranted, do them. When then you raise the rent, you’ll see most tenants will put up with it because you have maintained it and they are proud to live there.
When you have maintained the Property and maintained Rents at Current Market, you are using the “prudent investor standards”.
By the way… Have you heard Interest Rates are coming down….?
If you’re thinking of Selling or Investing in the area, please give me a call at 916.203.1260. I’ll actually answer the phone.. Texts will work also.
In the Mean Time…?
Make it a Great Day…!
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