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How does selling a home as a residence compare with offering it for sale as an investment property?

I have successfully rented a home for 13 years.  it actually has two distinct apartments which bring in roughly $1295/month.

This home could be offered as a residence in a single family residential neighborhood or as an investment property.

Which is more appealing and would bring the most interested buyers?
  • September 05 2009 - Gainesville
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Answers (8)

Best Answer

It dependson the neighborhood (whether it is predominately multi unit rental buildings  or single family or duplex homes)

If it's a neighborhood of single family homes and duplex homes which are owner occupied, I would pitch it towards owner occupied where they rent out the second apartment for income.

If it's an area of predominately rental or higher density multi unit buildings it might make more sense to pitch it as an investment property.

Keep in mind that the downpayment for a owner occupied residence is quite a bit less than for investment properties. So it's easier for owner occupied to get financing which may affect sale time and the offers you receive. Plus an owner occupied buyer might be more willing to spend more than an investor (who is seeing the property purely as a cash flow vehicle and not a place to live).
  • September 05 2009
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Could go either way but if the tenants are on month to month that would make the home appealing to an investor or a homebuyer. Many investors are smart enough to know the best deals come with tenants - as long as rental rates are at market. Put in your listing how great your tenants are, how they always pay rent on time, how they've been there X years - if, of course all these are true. Let your tenants know you are trying to sell to an investor that will allow them to stay.

Lower dollar properties with healthy cash flows will bring more investors - high dollar properties might be better as a residence.
  • September 10 2010
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I would market such a listing both as a single family residential property as well as an incoming-producing property to atttract the largest pool of buyers.  Be careful on the zoning ordinances of the area.  I took a listing that was being rented to seven individuals (individual leases) and found out that the neighbhorhood was zoned residential and could only have a max of an owner and two non-related members living there. 
  • September 04 2010
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Sorry Rosabela,  I just couldn't let this end on Fred's note.  I'm sure Jeremy will be a proud Florida Gator, and really enjoy his time here in Gainesville.  Third National Title coming right up! 
Good luck with your property, and feel free to contact me if you need any help.
Juanita Futch, Gainesville
  • September 06 2009
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Hey, Rosabela

  Greetings from Tallahassee. 

    Our boy Jeremy started at University of Florida this semester.  He wants to be a Veterinarian.  FSU does not offer that program, so we grudgingly sent him over to Gainesville.

    Best wishes, and this year the FSU Seminoles will upset the UF Gators and wreck their chance for a third National Title  :)


 Fred Griffin,  Tallahassee


 

   
  • September 05 2009
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Financing would be considered more so for a residental property.  It sounds like you do have a great income property and this should be used in attracting buyers that are looking for such.  Marketing your unique type of property as one that could serve a dual purpose would be a wise approach.
  • September 05 2009
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You have already gotten some great answers. Basically it depends... Are other homes in the neighborhood being rented or are they owner-occupied? Is it in a great rental location - close to the university, the mall, Shands? What are the residents like? Is the neighborhood primarily renters and/or students or owners? And like a previous poster said, financing is much easier to secure when the property will be used as a primary residence as opposed to an investment property.
  • September 05 2009
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Do you have current Tenants that are paying rent?

Or is the property vacant?

Have you asked an Appraiser or Real Estate Broker for an opinion of value or market analysis regarding a listing price for both scenarios?

Could you market the property as "either or"?

What is selling in the neighborhood?  Is the market better for rentals, or are more houses selling as single family homes?

Also, how is it listed with the Property Appraiser or Tax Collector, or with Government Zoning / Land Use?  Does the Government treat it as a duplex or apartment building, or do they show it as a single family home?


See a Real Estate Attorney for Legal Advice.

-------------
Best wishes,
    Fred
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  • September 05 2009
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