The Best Time to Invest in Apartments is Now
Many investors stick to family homes because it seems like a more accessible investment. The start up capital needed to buy an apartment complex, the hassle of renting multiple properties, and other factors can make this investment a bit intimidating. But the fact is that no matter when you are reading this article, right now is a great time to invest in apartments.
Benefits of Apartment Investing
How can we say that this is a universally excellent investment? There are quite a few benefits to owning apartments. Apartments are cheaper to renovate, operate, and own per unit than a single-family home. And the more apartments you own, the cheaper they become. It is far easier to negotiate great deals on bulk appliances or fixtures than a single one, for example.
Owning apartments doesn’t have to be an active job. Through a rental management company and a good office manager, you can be a totally passive. And the depreciation of apartments is a good tax write-off against your other income. Finally, it’s oddly much easier to get a loan for a larger project rather than an expensive family home, because the potential success of the complex is considered rather than just your ability to cover the loan.
Benefits of Investing Right Now
Every year, the housing market gets a little healthier since the mortgage meltdown. But the fact is that with a huge portion of the giant millennial generation becoming adults, rentals are in higher demand than ever. The values of this generation drive them to easy, urban rentals where they don’t need to keep up with yard work or home repairs. This trend will likely continue for several years, especially until lenders become as open as they used to be.
And because of this demand, apartments are in short supply. Prices are higher than they typically would have been, especially in the growing urban areas. Even a small increase in rent across many apartments can result in a large amount of extra income for you. And the nice thing about apartments is that they operate on scale. If your single-family home is empty, it’s empty. If you have one apartment out of 100 empty, you still have 99 other rent payments coming in.
Interest rates are also lower than ever right now for borrowers who can get loans. This means that you can finance your large loan for a great deal, without worrying about being stuck with high payments. The best way to go about borrowing for an apartment complex is through syndications or seller financing, both of which can easily allow for nothing down investing if you take your time to find the right building.
All across the country, particularly in up-and-coming tech hubs like Austen or Houston, apartments are a great investment option for investors who want to move away from house flipping. The risk is lower, the reward is higher, and your ability to invest without a ton of start up capital has never been more accessible than it is right now.
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