We have inherited a duplex in Maryborough, Victoria, which is strongly cash flow positive and has long term tenants in both properties. We are considering selling both units as this does not fit into our property portfolio and we need to raise some funds for a distribution to other beneficiaries of the will.
Should we look at selling these units individually (to the public) or trying to sell them as a package, with tenants in place, to another property investor? Fully mortgaged at bank valuation, the yield on both units is around 10%. The units are strata titled, I believe. The person who bought them originally bought one to live in, then later bought the other as an investment.
Thanks, Tony
Generally you will be able to sell each half of the duplex individually for more (combined) than if you sold them in one line. The reason is that if you sell them individually, you can market the duplexes to home buyers and investors, whereas if you sell them as a pair in the one line you are lmiiting your target market to just investors with enough money to buy two properties at once.
Perhaps in some cases you would be able to get more for selling them in one line e.g. if the site is a potential development site and you can market to developers who are willing to pay a premium for developable land, but generally speaking I think it would be best to sell them individually. Maybe talk to some local agents to get their opinions.
Cheers,
LukeUsually investors will want to buy both duplexes for a cheaper price, than just buying one. It's probably best for you to do this too return wise, instead of doubling up on selling/marketing costs, agents fees etc. selling individual units.
You could market both at the same time and sell individually. That is the cost can be spread across the 2 units but marketing both.
As others have said – you should get a better return selling separately as you increase your market. If you sell both as an investment then you are decreasing your market. Sure you can sell both to one investor but open it up to the wider market.Have you considered tax implications? I am not an accountant but there are tax implications for selling something you inherited. I could be wrong but there is something about you must sell in a certain amount of time- 2 years or something. After that there is a capital gain and I am not sure how it is applied but it goes back to when the property was first acquired?? Check with an accountant or the ATO.
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