Housing is one of the most stable investments, and while there will always be risks along the way, it’s a leap worth taking for investors who want a steady income stream. However, compared to the slow scalability you get from single-family units, apartment buildings offer a faster income rate even if there is a vacancy.
However, buying an apartment building can also be a complex process since they require more upfront capital, ranging from 20 percent of the purchase price. Investing in real estate is all about striking the iron, and while the market is still hot, we’re here to help you get moving with your decision by exploring the possible options you can take when investing in a multifamily rental.
Tip #1: If You Have the Capital, Buy the Apartment Building Yourself
Let’s start with the simplest: buying a whole apartment building offers the most benefits since it’s like investing in your business. You get control over plenty of factors — from working with a broker, finding the right property management, saving the funds, setting the budget, and deciding when to keep or sell the money pot.
Of course, this also requires the heftiest price tag with a demanding upfront capital, but this is the best choice for seasoned investors who want to have full control over future decisions involving the multifamily property.
Tip #2: Consider Buying with a Partner and Pool Your Capital
The next best thing to do when buying apartment buildings is to pool your capital with a partner investor. While you can cut back your budget with someone filling in half the investment, keep in mind that it takes two to tango. This means you’ll need to keep your partner in the loop with every decision, from renovation projects, plans of selling in the future, and more.
Tip #3: Pool Your Funds with a Syndication
Instead of having a full-fledged partner, you can also pool your funds with syndication, generally known as general partners. They will be taking over the investment, which means they’ll be handling the responsibilities you’d otherwise have to tackle when you buy the building yourself.
Of course, the biggest drawback is that they get to call the shots, leaving you with collecting your shares of the profit once the property is sold. Nonetheless, it’s an excellent opportunity to earn passive income through real estate.
The Bottom Line: Ways to Make Your Real Estate Investment Into a Real Fortune
Investing in an apartment building can be a sustainable way to build your wealth on the side, and the good thing is there are various ways to get your foot in the door. When it comes to narrowing your options, the choice largely depends on what suits your needs and goals the most.
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If you’re looking for apartment buildings for sale in the United States, check us out to browse our extensive property list in your local area! Get in touch with us and see what we can do to help you choose the best investment properties in town.