Investing In Apartments For Sale
When you’re looking at apartments for sale, you’ll want to have a business model that provides you with at least $100 per unit, says Jeffrey Taylor, author of “The Landlord’s Kit” (2002). This is the money you’ll make investing in real estate after you pay the mortgage on the building, the property taxes, the insurance and all other expenses. You will also need to be putting aside emergency repair fund money to cover any unexpected problems or vacancies. It’s best for first-time investors to start small and work their way up, he cautions. People have a tendency to bite off more than they can chew. That being said, there are several points to consider when perusing apartment buildings for sale.
When looking at apartments for sale, the first thing to consider is the location. The surrounding area is one of the predominant factors when people are looking for a place to live. They want to live near bus stops, grocery stores and laundry facilities if they do not have cars. They want to live near gas stations, grocery stores and major highways if they do have cars. Tenants want easy access to restaurants, post offices, public parks, day care facilities and decent schools. Invest in real estate in an area with relatively low crime, stability and well-lit streets if you plan to charge top dollar. You may also want to consider looking for apartment buildings for sale in college towns, where there is always a steady stream of tenants.
According to Michael Zaransky of Prime Property Investors in Chicago, college town apartments for sale are renting out at stronger prices than apartments in any other market. Many schools, faced with financial struggles, are facing a housing crisis, with no capital for dorm expansion. Secondly, echo boomers are arriving at colleges across America in record numbers. Across five different USA property markets that Zaransky manages, he says their apartment buildings are all “100% occupied,” even during the summer months. However, investing in real estate involving college students can come with its own unique set of problems. You’ll have to pay closer attention to what goes on there and set aside extra money to cover damages, for instance.
Once you find the apartments for sale that meet your criterion, you will need to think about managing your investment. Many owners will hire a property management company to screen prospective tenants, collect rent, deal with any complaints, ensure that landscaping and repairs are properly sub-contracted and eliminate much of the day-to-day hassles for you. If you buy investment property and play your cards just right, you could wind up with over $100,000/year in passive income from your initial investment, which isn’t too shabby!
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