Some of the top concerns on apartment owners’ minds right now are whether it’s a good time to sell their buildings, how to deal with selling a building with vacancies, what to do about oversaturation of apartments sellers driving competition, and the best exit strategies. It makes sense to feel skeptical, but now might just be the best time in decades to sell your property.
There’s a lot of uncertainty right now when it comes to real estate investing and apartment owners trying to decide whether it’s the right time to sell their multifamily properties. Luckily we have the answers for you. As your Long Beach fourplex market leader, we’re going to keep you up to date on what is going on in the fourplex market.
It’s important to stay on top of emerging real estate trends, especially when owning rental properties that are subject to everchanging laws and restrictions. Today I will discuss the Pros and Cons of selling your multifamily property during this uncertain time and how to get the best return on your real estate investment.
Pros – Why It’s a Good Idea to Sell Now:
- Low interest rates
- Growing pool of investors
- Property values are high
- No time restriction for selling
- Exit strategy
Low Interest Rates
Right now we have the lowest interest rates we’ve ever had, with investors buying up properties and paying as little as 3% interest. This leaves even more earning potential for these investment properties to provide reliable passive income to their owners, and continue providing returns in the future.
More Investors
As I mentioned, lower interest rates means that a larger pool of investors will be flooding the market. Investors know that if they capitalize on this low interest rate, they’re gonna cap their largest expense for the next 30 years. This is a huge motivator for new buyers entering the market.
Property Values
Values are still through the roof right now and it’s fair to say your property is worth more than ever before. This is perfect timing to sell for those considering moving to a different strategy for investing. Now is the perfect time to at least consider listing and getting a top-dollar price for your property.
Plenty of Time
Unlike the residential market and the single family home market, there’s no need to wait until specific times of the year to sell. Investors are always looking. If the interest rate is right, the location is ideal and the price is appropriate, then the property is going to move. No matter what time of year, the market for multifamily properties is always hot.
Exit Strategy
When a lot of apartment owners first entered the market twenty or thirty years ago, the goal was to build equity and generate passive income for retirement. With now being the best time to sell in decades, a lot of our clients are selling for top dollar and moving into different kinds of investments. A lot of these people are selling and then moving out of state to franchise businesses or try their hand at other investment opportunities. Whatever your reason could be, now might be the best time to call it and sell that fourplex you’ve been holding.
Cons – What If You Hold Off on Selling Now:
- Uncertainty
- Competition
- Eviction Moratorium
Uncertainty
What’s going to happen next year? We don’t know whether values are going to stay high or what interest rates will do in turn. The unpredictable nature of the real estate market can be difficult to understand at times, even for professionals.
Competition
Because of the timing, there is going to be more apartment owners putting their properties on the market this coming year. This creates competition, which in some cases can result in values being driven down. To avoid this, it’s important to be strategic when placing your property on the market and be weary of what else is selling in your area.
Eviction Moratorium
The eviction moratorium that is currently in place is set to expire at the end of January. This is deeply concerning to a lot of our clients. Because of the response to COVID, it is likely this deadline will be extended, maybe until spring and possibly even into the summer.
2020 has been a rough year but with the right preparation and strategic planning, 2021 has the potential to be a very lucrative year for real estate investors.
At Sage Real Estate, our firm specializes in studying the market and the stats specific to fourplexes in Long Beach, California. No other firm has taken this approach and we’ve made it our top priority. We’re also the fourplex market leaders and the highest-rated multifamily brokerage in Long Beach. It’s the reason why when we sell a property, it sells for 10% more and sells 10 times faster.
So, if you’d like to learn more, please reach out to us!
