Buying An Apartment Building: Four Things To Consider
Posted on: 8 August 2017
Purchasing an apartment building can be a solid real estate investment that yields a regular monthly income. If you are interested in this type of investment, you'll want to contact a real estate agent and do some homework to find the right property to suit your needs. Here are some things to take into consideration as you begin your search:
Current Occupancy
If you find a property you are interested in, ask about the current occupancy and the current rent rates being paid. Purchasing a beautiful apartment building that has low occupancy rates means you'll have to spend time finding tenants in order to get the monthly income you expect. You'll also want to know how much is being paid in rent so you can be sure that, at the very least, the rents paid will cover your monthly mortgage payment and the cost of using a property management company to maintain the building.
Monthly Expenses
You'll want to calculate the monthly expenses of managing the property to determine which apartment building fits into your budget. Consider the cost of hiring a property management company, potential repairs the building might need in the future, and the cost of regular upkeep, such as landscaping, trash removal, and cleaning the common areas. Figure in the property taxes, insurance, and mortgage payments as well to get a clear idea of how much the property will cost every month versus how much income it will generate.
Location
You've probably heard that location is key for real estate, and that is particularly true for apartment buildings. You want to be able to attract prospective tenants to the building, and choosing the right location can help. How close is the building to nearby schools and parks? Is there access to public transportation nearby? Can residents walk to the grocery store? Be sure to tour the neighborhood around the apartment building you are interested in to see how attractive it might be to people wanting to rent in the area.
Turnkey Operations
Turnkey real estate is real estate that is ready for use the moment you close. For apartment buildings, this can mean that there are already tenants in place and there is already a property management company handling the day-to-day operations. If you don't have a budget for doing repair work right away, or if you expect to see a return on your investment within the first few months, you'll likely want to look for turnkey real estate. Work with a real estate agent with experience buying and selling these types of properties to ensure the apartment truly is ready to go when you finalize the purchase.
Doing your homework first can help to ensure you make a sound real estate investment. Discuss your budget and your expectations with your real estate agent, and use this guide to help you as you look for your apartment building.
Contact a realty team like Knieper Team Real Estate for more information and assistance.
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