Investing in Residential Apartment Complexes – Increased Cash Flow and Investor Freedom

 flipping apartment complexesReal estate has almost always been a good investment vehicle. Given time, it almost always appreciates, and people will always need land and buildings. Getting real estate investing to work in the short term is a little trickier. There are people who make a living buying homes at a bargain, fixing them up, and then selling them for a profit. However, this is a risky venture that more people fail at than succeed. The less risky and more natural option is to create income properties through rentals and leases. Single family residential homes might be the choice of new investors, but most soon realize that they can make a better profit investing in residential apartment complexes or multi-family dwellings.

The reason for this is easy to understand. Even though commercial real estate properties like apartments or multi-family residential properties are typically more expensive overall, they are less expensive per rental space. Obviously, the more units in a property, the less capital each rental space will usually cost. That means that the monthly cash flow in rents has a greater impact in off-setting the cost of the mortgage and expenses. When looking for the right property to invest in, potential investors should consider the price “per door,” or for each rental space.

The expenses that come with investing in residential apartment complexes and multi-family dwellings include a wide range of things. The first is the actual mortgage to the property. Taxes, fees, permits, and licenses will also apply with an investment in commercial property. There are also ongoing costs like management, maintenance, and repairs. However, an investor also has to consider the need to fill the spaces with actual renters. Advertising may be a necessary expense. Also, there will be times when not every unit is full. That fact should also be considered in financial planning.

Another fact to consider is that investing in residential apartment complexes almost always means the investor figures in the ability to pay a manager or management company to deal with the day to day business of the apartments. This fact opens up possibilities that investing in properties where the investor is the primary landlord does not allow. Managed properties do not have to be in the same area as the investor’s residence. They can be located in a different neighborhood, city, state, or halfway around the globe. Investors should keep abreast of what is happening with the properties but the management allows for more freedom in finding the right properties.

For more information on investing in investment opportunities usually or normally not found in the marketplace, click here!

Sean Johnson is an Investment Advisor for an Investment Referral Service for investors requesting information on specific investments.

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