Common Reasons Apartment Buildings don’t Sell

In Multifamily & Apartments by Tim DieselLeave a Comment

The apartment building selling process is one which requires patience and strategy. Even in white-hot commercial markets, some apartment complexes will draw little to no attention from buyers. And, there are usually a few common reasons for this. It’s important to understand this is a very niche market. There is no MLS. Plus, the price points are way above residential real estate. Furthermore, there are other factors. If you want to sell an apartment building, you might encounter a few scenarios.

How to Find Apartment Building Buyers

Now, we’ve taken a quick look at how apartment building sellers can find buyers. There are a few methods you can use to find property investors. The first step to selling an apartment complex is to partner with an experienced commercial property professional. Because these individuals work in specific circles, they develop an extensive network. You can also look to your own professional network to put the feelers out.

Demographic trends suggest that demand for apartment living should continue to grow moderately. Furthermore, compared to other property types, apartments have shorter average development periods, which makes it easier for supply to adjust relatively quickly to changing demand, which in turn reduces the amplitude of building cycles. Apartments account for approximately one-fourth of the nation’s stock of income property. —

Of course, if you do a bit of research yourself to find recent acquisitions. Then, there’s always the whisper campaign approach. Corporate brands might also serve as potential candidates. These are brands with rental property buildings all over a region.

Common Reasons Apartment Buildings don’t Sell

If you’ve already put your apartment property on the market aren’t gaining traction or you’d just like to know some possible obstacles, you’ll find these situations can easily prevent a successful sale:

  • It’s overpriced. Let’s get the most obvious reason out-of-the-way. An overpriced apartment building (either due to a miscalculation or purposely for negotiation wiggle-room), simply won’t attract the attention it deserves. Buyers just bypass just about any overpriced property. (And, seasoned real estate professionals know to avoid these whenever possible.)
  • There’s new construction next door. This is something you can’t control but it’s a common selling obstacle (particularly if it’s another rental development). It’s just a bad situation and you’ll need to explore some different strategies.
  • The maintenance costs is way too high. If the expenses are just out-of-control, that’s going to scare buyers away the moment it’s disclosed. They’ll wonder why and probably pass on what’s perceived as a headache.
  • There are pending lawsuits against the complex. Lawsuits are frightening. That’s just the nature of such legal trouble. And, it spells a whole lot of trouble for you. You’ll probably have to work your way through it before you can actually expect to sell.
  • There’s a long record of late rents and unfixed issues. There’s more than one-way mismanagement can hurt you. If there’s a track record of late rent payments, repair issues, and other like history, it’s going to cause buyers to form a bad impression.

If you’d like to learn more about commercial real estate investment benefits and more about the selling process, please contact me.


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