Evaluating a duplex for a seller and buyer.

Today's lesson is for both a buyer and a seller. This is a review of what questions to ask when considering a duplex.

For the seller, the photo above represents what the buyer will perceive about the property. The negatives are the cluttered front porch. The plus is clean siding, newer roof and small parking area off street.

While the side photo is not normally a great photo for the seller and buyer, this one is very important. The seller is showing that there are two electrical meters, so each side of the duplex has separate utilities. Second, the seller is showing the HVAC unit, which appears to be new. Third, the seller is showing that there is a rear exit in the property, which is very important for fire safety.

The bedroom photo is a poor choice for the seller. While the photo shows the condition of paint, which is new, the clutter may make it difficult for a buyer to see what is most important. A buyer should always look past the furniture in an occupied property and focus on the condition of the structure itself.

The kitchen photo is a good choice for the seller. It shows the condition of the room. Paint is good, flooring is new. Kitchen cabinets and sink are in good condition. The photo does not show the refrigerator. The buyer needs to ask about appliances. Are the appliances part of the transaction? Are there any warranties on the appliances?

The rear photo is important to the buyer because it indicates what type of foundation. The door shows that this is a high crawl space. The buyer should look under the house to inspect the plumbing, floor support and HVAC. Look for water stains, sagging floors. Also, is the floor insulated? A higher crawl space is easier for repairs to the infrastructure of the home (plumbing, electrical, hvac).

The intangibles that the buyer needs to consider are: rent. How much is the current rental? When are the leases renewing? What is the payment history of the tenants? What is the rental demand in the area?

This duplex originally listed at $290,000 which is high based on a standard cap rate. After 60 days on the market, the seller has lowered the price to $265,000. The unit is located in the center of a small city in Northeast Georgia. Our showing activity has been strong, but no accepted offers have been received yet. The main drawback is that the rooms are small. When the property is sold we will add an update.

If you would like for us to explain Cap rate and how to use a formula for evaluating return versus investment on rental property, just leave us a comment below.

All photos and content are created by realestate4114u and is from our actual listings in NE Georgia.