Apartment Buildings
3 Steps for Buying an Apartment Building
Apartment buildings might very well be one of the most popular real estate investments. While they’re strictly residential real estate, they have many similarities to commercial real estate investments. They involve a large initial payment, have multiple tenants, and involve a ton of upkeep. Before you decide to invest in an apartment building, you should make sure you examine the opportunity carefully.
Is it right for you?
While the income might be attractive, owning an apartment building has its own host of challenges. For starters, tenant turnover is much higher than single tenant residential properties. Many tenants will move once their lease is up, and some won’t even wait for that. That means constantly needing to attract new tenants, as well as making sure they’re a good fit for your building. Apartment buildings involve more upkeep as well; you’re responsible for maintaining the living conditions of several spaces, not just one home. That involves increased costs, more involvement, time and possibly hiring help. Those are just a few things you need to think about.
Take your time finding the right building
Check out the area, check out the neighborhood, check out the building and the tenants. You really can’t take enough time to make sure the investment is a good one. Find something that fits within your budget, but make sure it’s adequately priced. Nevermind the fluctuations of the market, specific owners might misrepresent the actual value of their building. Do your own research. Compare the building to similar ones in the area, as well as other areas. That will give you a better idea of what you’re getting into.
Commit
If you’re going to be a landlord, you need to be invested in your property. It’s not over when you get the keys and your tenants have moved in. You have to be present and available. If something goes wrong, you’re the one who needs to take care of it. That means a serious investment of time and money even after the purchase is made. You’re offering your tenants a place to live; you need to make sure it’s suitable. If you don’t think you can handle the time investment, you need to hire a property manager. They’ll become the first line for any problems your tenants have and can ensure everything goes smoothly.