Apartment building sellers, you’re ready offload your asset and move on. While that might or might not actually be part of your original plan, here you are. Now, you’re wondering what you can do to make it attractive to potential buyers. After all, it’s about tickling the right spot. But, it’s not just the property itself you’ll be marketing, so-to-speak. You’ll also be presenting your property management crew as part of the process. Now, it may not actually come down to them transitioning to the new owner. Still, you’ve got to think about it this way, at least, initially.
Common Apartment Building Selling Pitfalls
Let’s face facts, though an apartment complex is typically a lucrative investment, it’s not necessary a highly demanded commodity. You’re selling to a completely different niche audience. This is why apartment building sellers face a few key obstacles. Namely, these are complex investments, not easy to understand.
It is crucial to memorialize every detail possible in the commercial real estate contract. Since courts usually only consider the four corners of a contract in order to settle disputes, all critical details of the deal should be covered in the contract. Too many individuals involved in commercial real estate use standard contracts that do not cover the unique contingencies that only exist in these types of transactions. —Harras Bloom & Archer LLP
It’s also difficult to determine the actual market value of an apartment property. And, if there’s any new construction in-progress, that can really be problematic. What’s more, it’s not simple to finance such a large purchase.
What Apartment Building Sellers should Know about Property Management Services
Now, we’ll talk a bit about how your property management team figures into the equation. This is due the fact that it’s this crew who keeps the ship tidy. And, if they don’t deliver, you can bet potential buyers will pick up on that fact.
- Tenant interaction. Firstly, you’ve got to take an honest assessment of how they perform. Do they respond quickly and effectively to tenants in need? If there’s a laundry list of complaints, it will come to the surface at some point.
- Grounds conditions. Are the grounds well-maintained? This is very important because it’s one of the first things buyers will notice. Unkempt grounds will stick out and there’s no way around it.
- Regular maintenance. How do they handle regular maintenance? Are there issues that need attention which go unaddressed? Here again, this is quite noticeable and buyers will certainly have objections.
- Reliability. Now, there are property management teams which work remarkably well, albeit a bit slowly. If your property management service lags in response time but does ultimately deliver, this presents a problem.
If you’d like to learn more about commercial real estate investment benefits and more about the selling process, please contact us.