Are you thinking about investing in apartment buildings but you’re not sure if it’s a smart move to make or not for 2021? If so, you’ve come to the right place!
Even though the rental market has had an up-and-down year due to Covid-19, the reality is that investing in apartment buildings is still a smart move to make.
In this article, I will provide you with several reasons why you should invest in apartment buildings and tips on how to find the right apartment building for your investment portfolio.
Yes, Investing In Apartment Buildings Is A Smart Move For 2021
Unlike stocks, or other Investments, apartments are an asset that’s always in demand and that hasn’t shown any sign of slowing down, even in 2020 while Covid-19 has been raging.
When you have an asset that people always need, this puts you in a great position as an investor because it doesn’t matter if the economy is up or down, or if there’s a pandemic, you’re always going to own something that people want.
More Doors Equal More Income
As well-known real estate investor Grant Cardone said “more doors, equal more income”, this is true because if you have a 100-unit apartment building, you can enjoy a stable and consistent income from those doors compared to owning 100 single-family homes.
I prefer investing in apartment buildings, over single-family homes, because if I have one or more vacancies in my apartment buildings, I’m always going to have occupied units which will cover my mortgage and other expenses until I get those vacant units rented.
If you’re just getting started, you may not have the ability to pay cash for an apartment building right away and this means that financing could be your best option.
The good news though is that you can still get started with investing in apartment buildings even if you were to choose an FHA loan because the SBA gives investors the ability to also live in one of the units of their multifamily properties.
If you’re up to the challenge of “house hacking”, using an FHA loan to invest in an apartment building may be one of the best ways that you can get started with purchasing your first apartment building.
Where To Buy An Apartment Building
One of the great things about this day in age is that apartment buildings can be found in most cities across the United States.
People love living in apartment buildings because they don’t have to mow the lawn or pull weeds.
Apartment buildings are also ideal for renters because they also come with shared common areas, exercise rooms, swimming pools, and laundry rooms.
When you’re ready to get started with purchasing your first apartment building, you may be wondering where you should make your purchase.
In 2020, the real estate market has changed dramatically over the last 12 months and many cities that were once considered to be safe, are no longer ideal places for Real Estate Investments.
Before investing in an area, you should take the time to research that area thoroughly or even hire a local Realtor® to help you find properties. A local real estate agent can provide you with insight into the local area and they may even know of local investors who are ready to sell their apartments buildings.
How To Identify The Right Apartment Building
After you’ve identified a great city to invest in, the next thing to do is to find apartment buildings for sale in that location.
Depending upon the state of the local real estate market, it’s possible that you may not find any leads in that area. No problem!
Some of the things that you could do to find apartment building leads include:
- Networking with local real estate investors
- Hiring bird dogs
- Driving for dollars
Driving for dollars is one of the simplest and easiest things that you can do to find apartment building leads. This process simply involves getting in your vehicle, pin pointing several areas where you would want to invest in an apartment building, then canvassing those areas for apartment buildings.
Keep in mind that while driving for dollars, you may be unable to connect with the owners of those properties right away.
This is why you should write down the address of those properties because, once you get back to your office, you should be able to research tax records online to find out who owns each building then you can contact them directly through phone or mail.
Do Your Due Diligence
Due diligence is by far one of the most important aspects of purchasing real estate.
With this process, you’re going to investigate the area thoroughly to make sure that it’s a safe place to live and has a thriving local economy.
After you have done your initial investigations, you should also do a comparable analysis of other apartment buildings in the area to find out what comparable properties are priced at.
If your apartment building looks like something that you would want to purchase, the next step is to contact the owner of that property directly to see if they would consider selling their apartment building.
Let’s say that the owner of the property would be interested in selling, if this is the case, you will need to hire an inspector to inspect each unit of the property. You should also verify if there are any deferred maintenance issues and view the owner’s financial statements for the property as well.
Last of all, if the property looks like a sound investment, the next step is to make an offer and if it’s accepted, you should hire a property manager to manage that property.
Contact Trier Capital
At Trier Capital, We specialize in investing in apartment buildings across the United States.
Over the years, our team has built an extensive portfolio of multifamily properties for our clients nationwide.
We’re experts at saving our clients the time and hassle of sourcing, acquiring, and managing multifamily properties so that they can enjoy passive income from those Investments.
If you’re an investor who is serious about investing in multifamily properties but, you don’t want to spend the time and hassle of having to find and manage those properties yourself, I encourage you to contact me at (630) 229-2383 or click here.