Mike Adams-Internet Real Estate Marketing Pro

How to Market Rental Property to Make the Sale

by James R Kobzeff, Guest Author

Residential real estate agents commonly sell rental property, mostly duplexes or triplexes, but occasionally larger apartment complexes as well. Fair enough. Unfortunately, however, most residential real estate agents do not include basic elements about the property in their listing information that others can use to sell that rental property.
The income and expense data, for instance, is regularly omitted or skewed by residential agents in MLS listings, and is extremely frustrating to others with an interest in the property because it necessitates a call to that agent; which easily could be avoided had the agent merely taken a few minutes to present the rental property properly. Here’s a breakdown of what a MLS listing presentation should include.

• Price
• Number of Units
• Unit Mix – Are the units two bedroom one bath, three bedroom two bath, and so on? How many units are there for each configuration?
• Gross Scheduled Income – What is the annual gross rental income? This is the potential annual income if all units were occupied and collecting realistic (not pie-in-the-sky) rents. Use a market rent for the vacant units.
• Operating Expenses – The dollar amount spent annually to keep the property running. Property tax, liability insurance, utilities, trash collection, maintenance and repairs, and so on. Depending on the number of units, this should be somewhere between 25-50% of the gross operating income. With duplexes, for instance, tenants usually pay for trash collection, and utilities normally associated with laundry facilities in larger complexes, or landscaping costs do not exist.
• Rent Per Unit – Show the current rent for each unit. In cases of larger apartment complexes, show a rent-range by unit configuration.
• Capitalization Rate – This is optional in most marketing presentations but it can help generate interest. To compute cap rate simply divide the property’s net operating income by the asking price.

Real estate agents are also guilty of not preparing a marketing package or executive summary for those inquiring about the income property listing. Whereas the MLS is meant to broadcast the listing and peak interest in the property, the marketing package fills in the blanks. So it is important when marketing investment real estate.

In addition to the obvious like price and address, a marketing should also include the following:

• An Income and Expense Statement
• Property Description
• Property Features
• Current Loan Information
• Proposed Loan Information – Show the annual debt service and cash flow before tax (net operating income less mortgage payment)
• Rates of Return such as capitalization rate, gross rent multiplier, cash on cash return. The more eloquent the better, so you might also consider adding calculations for price per unit, price per square foot, expense ratio, break-even ratio, and debt coverage ratio.
• Property Picture(s)

Note: You can see a marketing package and executive summary on our website (see resource box below).
Remember, your goal is to sell your rental property listing. Why not present it in a way that will satisfy investment property specialists, perhaps get them interested, and at the same time make you look more professional. Plus, it’s a great way to show your seller how proactive you are about marketing their rental property.


About the Guest Author
James Kobzeff is the developer of ProAPOD – leading real estate agent software solutions since 2000. Create cash flow, rates of return, profitability analysis and marketing presentations for rental properties in minutes! Easy and affordable. Learn more at => http://www.proapod.com

admin: Good Points Prospective buyers want and need all of this information, but some of it should NOT be published on the internet ( MLS etc) kinda like publishing your bank account info… it may be necessary to disclose it to someone, but is NOT necessary to disclose it to everyone. As agents there is a duty to protect our clients information and not disclosed it to non – qualified “lookers”. Loan information is NOT public information, and disclosure may put seller in an disadvantageous position, for any number of reasons. Buyers bring their own loans to the table, unless there is seller participation. Beside Agents LIKE getting phone calls requesting information about a property….that is part of what Agents do.

Related posts:

1. How to Sell that “Hard to Sell” Property
2. Buy Multifamily Property Profitably
3. How to sell a property occupied by tenants
4. Fixing up a re-hab rental property
5. Use A Buyer’s Agent