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Updated almost 10 years ago,
Criteria for deciding to market a multi-family property as commercial or residential (multi-family)?
I will be listing a property I own and also reside in. Here is what it consists of- A large 135 year old house with 3 units: 1 is long term rental, 1 is VRBO, and I live in the other. There's a separate detached carriage house with 3 garage stalls and a 2 bd/1 ba unit above it. My mother lives there currently rent free.
Without rent coming in from my dwelling and my mother's it grosses $42,000/yr. It could easily gross $80,000 by renting (long term rental) the units we reside in. The best use of the property would be to VRBO these two units, which would gross $100,000 plus. I currently operate 3 VRBOs in this neighborhood and this is based on how well my other units do currently.
I have meet with several realtors and neither has presented with confidence a solid decision on the best way to market it. I am not in an area that is zoned commercial so perhaps that excludes a "Commercial" label. I believe that a realtor would use comparables based on a 4 unit multi-family that has long term tenants, and based upon market rents would only generate $50,000-58,000/yr.
I would greatly appreciate any comments you have on this matter. I will be selling it this coming fall/winter.
Thanks!!!
Stacey