Rental Property Investor · Member since 2020 · 172 posts · 110 votes
I have a two unit building with a large commercial unit on the ground floor, when rented goes for about $4,000 monthly. There's a large owners unit above it that makes great money as a legal AirBnB. Because of local laws only the top can be STR.
I've decided to sell the building and I'm wondering if I should focus on getting the downstairs rented out first, or if the building will sell for more/quicker with the commercial unit unrented. The realtor I've engaged to rent the commercial space is encouraging me to list the property and the rental simultaneously but I think if I was renting a commercial unit I might be turned off by the building being for sale.
And of course sometimes a commercial tenant makes renovations on their own dime that adds significant value to the property.
I'm kind of stuck here. Another consideration is if the property doesn't sell for what I'd like I don't want to be missing out on the rental income, which is substantial. And I'm worried the realtor won't try as hard to rent the space if they're focused on getting the building sold.
Not my first rodeo, but the situation is kind of unique. Would love to hear what people think.
Real Estate Consultant · Seattle, WA · Member since 2022 · 1k+ posts · 784 votes
4y
When it comes to commercial, rented vs empty (ready for an owner occupant, most likely) will drive different valuations (and approaches to same) and target different buyer pools. Your experienced commercial broker should be able to run the numbers both ways using methods appropriate for each scenario and you can then make a more informed decision. Commercial is very localized where one thing here may be completely different from the identical thing a mile away.
Real Estate Consultant · Seattle, WA · Member since 2022 · 1k+ posts · 784 votes
4y
When it comes to commercial, rented vs empty (ready for an owner occupant, most likely) will drive different valuations (and approaches to same) and target different buyer pools. Your experienced commercial broker should be able to run the numbers both ways using methods appropriate for each scenario and you can then make a more informed decision. Commercial is very localized where one thing here may be completely different from the identical thing a mile away.
Lender · Boca Raton, FL · Member since 2014 · 250 posts · 133 votes
4y
If you think your buyer is an investor it will be be easier to sell and sell at a higher price with a tenant, on the other hand if you think a user will buy it you should leave it vacant.
If you think your buyer is an investor it will be be easier to sell and sell at a higher price with a tenant, on the other hand if you think a user will buy it you should leave it vacant.
This is pretty much the only question. Vacant to an investor is super low value vs. occupied to an owner-user, well, they won't buy it.