Purchasing an apartment building may seem like a difficult task, but it’s actually a good investment. You can have another source of income that you don’t have to work too hard for. All you need is to maintain it and respond to issues as they come.
You don’t even have to visit every day since you can hire a manager to oversee maintenance, cleaning, and repairs. Owning an apartment complex can be an incredibly lucrative source of income. If you are a beginner and you want to know more about owning an apartment building, here is a guide for arming yourself with the necessary information:
How Much Does an Apartment Complex Cost?
The price of an apartment complex depends on many factors, such as the number of apartments, location, and age. A duplex, triplex, or fourplex apartment is more affordable than a high-rise building. As a beginner, we don’t advise that you start with a high-rise apartment building because you’ll be managing hundreds of individual units. Start with 4–16 units.
Another factor is the location of the building. Usually, an apartment in a rural area tends to be cheaper than in the city. However, apartments in the city have higher rental prices.
How Can I Make Money From an Apartment Building?
There are a couple of ways to earn income with an apartment building. The most obvious one is through rent. Another is through property appreciation.
An apartment building’s value tends to increase over time. Even if you aren’t making as much money through rental income, you can earn through property appreciation. Aside from property appreciation and rental income, you can leverage the property and use it for tax benefits.
Is an Apartment Building a Good Investment?
An apartment building is a good investment as long as you purchased it at the right time for the right price. You need to make sure that you choose the right location with low crime rates and access to amenities. You’ll also want to make sure that the property you bought is well-managed and the rentals are properly marketed to gain customers.
Don’t be afraid to ask questions or take time to make a decision. Remember, an apartment complex is only an investment when you pick the right one. Consider the age, condition of the property, price per square foot (compared to the rest of the market), and the local real estate market.
The great thing about an apartment building is you can have several apartments in your portfolio. When one is vacant, you’ll have others to supplement your income. This way, you won’t lose as much cash, and when the apartments are filled, and you’ll have a more significant stream of income. Don’t forget that apartments appreciate over time, so this is another way to gain income.
There’s only one downside to an apartment building, and that it requires a hefty downpayment. Since buildings are more expensive than an average house, a 20% down payment can be pretty big. You should expect to make a down payment of over $100,000 as even the most affordable buildings with just a few units will cost over $500,000.
Conclusion
Apartments are great investments for beginners like you. You can have several apartments in your portfolio and steady streams of income. If you plan on purchasing one, then go. Just don’t forget to research before buying an apartment building.
Do you want to purchase an apartment building? We buy and sell apartment buildings. Are you interested to know more? Call us now!