Why Invest in Apartment Buildings

Investing in Apartment BuildingsApartment building investments are red hot and with proper due diligence, there are a lot of really good deals to be made in today’s market. Let’s take a look at why you should consider investing in apartment buildings.

Greater cash-on-cash returns

Traditionally, apartment buildings offer a greater return than single family homes. Apartments also have a lower cost per unit than single family homes.

America is becoming a nation of renters

All of the families who have been displaced because of foreclosure are going to have to live somewhere! And most likely they will live in apartments. Why not have them rent from us? Many Americans are still recovering from the hangover from the housing crisis and are leaning towards renting instead of owning.

Instant profits

As an apartment owner, you benefit from positive cash flows from day one. Use this additional income to supplement your current income, take a nice vacation every year, or even to reduce your hours at your job. In fact, if you purchase a big enough building and you can live off the income, you don’t have to go to a job every day!

Now of course, if you’re buying a distressed property with a high vacancy rate, or perhaps the whole building is vacant, you may not have positive cash flow. But that’s a different strategy in itself. Purchasing non-performing apartments and stabilizing them can offer even great returns and huge payouts!

Financing options

It is typically easier to get financing for apartments than single family homes. Apartment building owners are generally more financially astute and are more willing to help you finance the property. It is even possible to get 100% financing. In fact, most of our deals that we put together involve some sort of bank or seller financing; sometimes even a combination of both.

Forced Appreciation

Apartment buildings can appreciate faster than houses. You don’t have to wait for real estate prices to go back up to increase the value of your apartment building investment. You can increase the value of your apartment building by increasing the rents, cutting your expenses or by making physical improvements on the property. Also, strong demand in metro areas with limited apartment vacancies can cause prices to soar.

So while everyone is jumping on the single family home bandwagon, perhaps it’s time to consider investing in apartment buildings as another option.

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